VEERPRABHU COMMUNICATION PVT. LTD.,KOLKATA vs. A.C.I.T., CC - 2(4), KOLKATA, KOLKATA

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ITSSA 51/KOL/2024Status: DisposedITAT Kolkata21 May 2025AY 2015-20166 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal dismissed both appeals filed by the assessee. The Tribunal noted that the assessee had not attended assessment proceedings and had not provided details of the property from which rental income was derived, nor did Form 26AS show any TDS deduction. The assessee had claimed rental income of Rs. 4,86,000/- as business income in its return. The Tribunal observed that the Income Tax Act clearly defines five distinct heads of income. Multiple opportunities were given to the assessee to prove the source of rental income. The Tribunal agreed with the CIT(A)'s finding that the assessee's main object was to do business in agricultural produce, and therefore, rental income would fall under 'income from house property' unless shown to be derived from business activities. Following the Supreme Court's decision in Chennai Properties and Investments Ltd., the Tribunal found no error in the CIT(A)'s order.

What were the facts?

The assessee, Veerprabhu Communications Private Limited, filed two appeals before the Income Tax Appellate Tribunal (ITAT) challenging separate orders of the CIT(A), Kolkata-26, dated March 8, 2024, for assessment years 2015-2016 and 2016-2017. The appeals were filed on May 28, 2024, and had been adjourned multiple times due to the unavailability of the assessee's Authorized Representative (AR). The ITAT noted that no Vakalatnama was filed. The Revenue, represented by the CIT-DR, argued that a search and seizure operation occurred on September 9, 2015, making the assessment years abated. The Assessing Officer (AO) brought to tax rental income offered by the assessee as business income, classifying it as income from house property. The CIT(A) had also considered the Memorandum of Association (MOA) which stated the company's object was trading in agricultural produce, not letting premises.

What were the issues?

1. Whether the rental income earned by the assessee is to be treated as 'income from house property' or 'business income' for assessment years 2015-2016 and 2016-2017, turning on the interpretation of Section 14 of the Income Tax Act, 1961. Assessee's Contentions: Not recorded as the assessee did not appear and adjournment applications were rejected. Revenue's Contentions: The rental income should be treated as 'income from house property' and not 'business income' because the assessee's Memorandum of Association clearly states its main object is trading in agricultural produce, not letting out premises. The Revenue relied on the Supreme Court decision in Chennai Properties and Investment Ltd. v. CIT.

Which sections of the Income-tax Act were involved?

Section 14

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH, KOLKATA

Before: SHRI GEORGE MATHAN & SHRI SANJAY AWASTHI

Hearing: 21/05/2025Pronounced: 21/05/2025

आदेश की प्रनतललपप अग्रेपर्त/Copy of the Order forwarded to : अपीलार्थी / The Appellant- 1.

2.

प्रत्यर्थी / The Respondent- 3. आयकर आयुक्त(अपील) / The CIT(A), आयकर आयुक्त / CIT 4. विभागीय प्रविविवि, आयकर अपीलीय अविकरण, कोलकाता / DR, 5. ITAT, Kolkata गार्ड फाईल / Guard file. 6.

सत्यापपत प्रतत //True Copy// आदेशधिुसधर/ BY ORDER,

(Assistant Registrar) Income Tax Appellate Tribunal, Kolkata

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