C I T JAIPUR vs. M/S GAJANAN TOWER PVT LTD

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 107 / 2011 Commissioner of Income Tax, Jaipur-II, Jaipur ----Appellant Versus M/S Gajanan Tower Pvt Ltd., Behind Oil Mill, Nahargarh Road, Jaipur ----Respondent _____________________________________________________ For Appellant(s) : Mr. K.D. Mathur for Mr. R.B. Mathur For Respondent(s) : Mr. N.L. Agarwal _____________________________________________________ HON'BLE MR. JUSTICE K.S. JHAVERI HON'BLE MR. JUSTICE INDERJEET SINGH Judgment 22/08/2017 1. By way of this appeal, the appellant has challenged the judgment and order of the tribunal whereby the tribunal has dismissed the appeal of the department. 2. This court while admitted the appeal on 28.05.2013 has framed following substantial questions of law:- (i) Whether in the facts and circumstances of the case the ITAT was justified in law in directing to allow interest claimed after apply N.P. rate of 10% despite of the facts that the assessee has voluntarily surrender net income of s.4533201/- for taxation @ 10 of declared turnover during the course of assessment proceedings? (ii) Whether in the facts and circumstances of the case, the ITAT was justified in law directing to consider rental income shown by the assessee as income from house property and consequently to allow deduction u/s 24(a) despite the fact that the income generating asset was shown as stock in trade by the assessee?”

(2 of 3) [ITA-107/2011] 3. The issue is covered by the Circular of Low Tax Effect. Even otherwise, in view of the decision rendered in D.B. Income Tax Appeal No.247/2011 (Commissioner of Income Tax-I, New Central Revenue Building Statue Circle, Jaipur (Raj.) Vs. M/s Zuberi Engineering Company and other connected matters) decided on 18.05.2017 wherein it has been observed as under:- 4. However, counsel for the respondent has relied upon the decision of this Court in the case of CIT Jaipur vs. Kirodi Mal Modi in DB Income Tax Appeal No.713/2008 along with other connected matters wherein this Court has observed as under: “11. Taking into consideration the fact that the view taken by the tribunal is on the basis of the profit of the assessee for the previous year, in our opinion, no error was committed by the tribunal. The view taken by the tribunal is required to be upheld for the purpose of Section 145(3). 12. The tribunal while considering the same has dealt with the same in para no.5 which reads as under:- "Considering the above submissions and keeping in mind that in the assessment year 2004-05, the first appellate order related to that year has also been questioned before us by the revenue, we are of the view that application of N.P. rate at 7.5% subject to allowing of depreciation is reasonable under the facts and circumstances of the present case especially when during the year the assessee has shown better N.P. rate in comparison to the immediately preceding assessment year i.e. at 7.03%. So far as application of provisions of section 145(3) of the Act questioned by the ld. A/R is concerned, we do not find substance therein because in the very nature of business of the assessee it is not generally possible to support the claim of expenditure etc. With verifiable evidence. We order accordingly. Ground no.1 is, therefore, partly allowed."

(3 of 3) [ITA-107/2011] 13. In that view of the matter, the issues are answered in favour of the assessee and against the department. 14. The appeal stands dismissed.” 5. He has also relied upon the decision of this Court in the case of Commissioner of Income Tax vs. Jain Construction Co. & Ors. 245 ITR 527 wherein it has been held as under: “(i) that in the instant case, the previous year was 1992-93 and the assessment year 1993-94. Section 40(b) as amended with effect from April 1, 1993, was therefore, applicable. The Tribunal after examining the partnership deed in all individual cases found that the claim of the assessee for interest on capital contribution by the partners and salary to working partners were allowable deductions to the extent of the limit provided under Section 40(b) of the act. The Tribunal was justified in doing so. The finding of fact did not give rise to a question of law. (ii) That the assessee was entitled to depreciation as admissible under the rules on the assets used in the business as claimed in the return. In a case of rejection of accounts and estimate of net profit, depreciation is required to be worked out separately. The Tribunal had directed the assessing authority to recompute the total income as estimated by him and allow relief on account of payment of interest and claim of depreciation. The finding recorded by the Tribunal was purely a finding of fact, based on proper appreciation of material on record and the evidence produced by the assessee. No question of law arose out of the order of the Tribunal.” 4. In that view of the matter, the issue is required to be answered in favour of the assessee and against the department. 5. The appeal stands dismissed. (INDERJEET SINGH),J. (K.S. JHAVERI),J. Jyoti Item No.85