DCIT 2(1), MUMBAI vs. BALAJI INFRASTRUCTURE & DEVELOPMENT CO. LTD, MUMBAI

Balaji Infrastructure & Development Company Ltd. Assessment Year-2010-11 आदेश / O R D E R Manoj Kumar Aggarwal (Accountant Member):- 1. These are cross-appeals for Assessment Year [AY] 2010-11 assailing the order of Ld. Commissioner of Income-Tax (Appeals)-4 Mumbai, [in short referred to as ‘CIT(A)’], Appeal No. CIT(A)-4/IT-69/ITO 2(1)(1)/2012-13 dated 28/10/2013 on certain grounds of appeal

2. None has appeared for assessee and no valid adjournment application is on record. The perusal of order sheet entries would reveal that the assessee has remained negligent in attending proceedings on several occasions. Left with no option, we proceed with disposal of appeals after hearing learned Departmental Representative and on the basis of material on record. 3.1 The assessee, being resident corporate assessee, has been assessed u/s 143(3) on 26/12/2012 wherein the income has been determined at Rs.231.50 Lacs after certain additions / disallowance as against Nil return filed by the assessee on 13/10/2010. 3.2 During assessment proceeding, it transpired that the assessee reflected receipts of Rs.61.74 Lacs in the Profit & Loss Account and claimed expenditure of Rs.94.70 lacs against the same resulting into loss of Rs.32.95 Lacs. The said receipts included an amount of Rs.12 Lacs being rental income from certain office premises and a yacht (Vessel) which was stated to be rented out to an entity namely Dighi Port Limited. The Ld. AO, forming a view that the income was to be assessed as Income from House Balaji Infrastructure & Development Company Ltd. Assessment Year-2010-11 Property proceeded to assessee the same as Income from House Property and disallow the deprecation claimed on these assets. Although the assessee defended its working, however, the same could not find favor with Ld.AO. Accordingly, the said income was assessed under the head Income from House Property which translated into rental income of Rs.8.40 Lacs after providing for statutory deduction u/s 24(a) @30%. Consequently, the depreciation of Rs.7.53 Lacs & Rs.2.69 Lacs claimed on office premises & yacht respectively was disallowed while framing the assessment. 3.3 It further transpired that the assessee claimed Salary expenditure for Rs.31.45 Lacs. Since the assessee failed to furnish the documentary evidences, in this regard, 20% of the said expenditure was disallowed resulting into an addition of Rs.6.29 Lacs. Similarly, legal & professional fees of Rs.8.71 Lacs claimed by the assessee was disallowed u/s 37 in the absence of satisfactory documentary evidences. 3.4 Another addition made in the hands of the assessee was addition u/s 68 for Rs.171.99 Lacs with respect to fresh loan taken from 5 entities during the year under consideration, the details of which have already been extracted in the quantum assessment order. Since the assessee failed to discharge the onus of proving the creditworthiness and genuineness of the transactions, the said amounts were added to the income of the assessee. 3.5 It transpired that the assessee purchased two flats during the year under consideration and upon perusal of sale deeds, it was observed that it paid stamp duty on the same for Rs.7.53 Lacs. However, the said payment was not reflected in the books of accounts. The assessee submitted that Balaji Infrastructure & Development Company Ltd. Assessment Year-2010-11 the stamp duty was paid by Dighi Port Limited which was later on reimbursed by the assessee. However, the stamp duty was inadvertently debited to said entity instead of office premises account. However, not convinced, the said amount was added to the income of the assessee u/s 69. 4.1 The assessee submitted additional evidences u/r 46A during appellate proceedings which were subjected to remand proceedings before Ld.AO. The Learned first appellate authority, after due consideration, upheld the stand of learned AO in assessing income from office premises under the head Income from House Property. However, with regard to rental income from yacht, Ld. AO was directed to assess the same under the head Business Income. Aggrieved, the assessee is under appeal before us with Ground Nos. 1(a) & 1(b). The revenue has not agitated this matter any further. 4.2. The adhoc disallowance of 20% on account of salary & allowance was reduced to Rs.2.22 Lacs after considering factual matrix & assessee’s submissions. Similarly, the addition of Rs.7.50 Lacs out of legal expenses of Rs.8.71 Lacs was confirmed since no supporting material was not furnished by the assessee. The addition of Rs.171.99 Lacs made u/s 68 was reduced to Rs.16.25 Lacs after considering the documentary evidences submitted by the assessee. Finally, the addition of Rs.7.53 Lacs made u/s 69 was confirmed. Aggrieved, the assessee as well as revenue is under appeal before us. The revenue is agitating the relief provided by Balaji Infrastructure & Development Company Ltd. Assessment Year-2010-11 Ld.CIT(A) u/s 68 whereas the assessee is under appeal against additions confirmed by Ld. CIT(A).

5. Upon careful consideration, at the outset, we find that the revenue’s appeal is not maintainable in view of recently issued low tax effect Circular No.17/2019 dated 08/08/2019 issued by CBDT [F.No.279/Misc.142/2007- TTJ(Pt.) Government of India, Ministry of Finance, Department of Revenue] and therefore, the appeal is not maintainable. The Ld. Departmental Representative is unable to point out any exceptions in the appeal as provided in para-10 of Circular no. 3 of 2018 dated 11/07/2018 or in any subsequent circular / instructions. In view of the same, the revenue’s appeal is dismissed. At the same time, a liberty is granted to revenue to seek recall of the appeal, if at a later stage, it is found that the matter is covered by any exceptions provided in any of the circular or in case the tax effect of the additions in the appeal as agitated by revenue exceeds the prescribed monetary limit.

6. So far as the assessee’s appeal is concerned, we find the first appellate authority has clinched all the issues in correct perspective after due consideration of factual matrix. Nothing on record compel us to take any other view in the matter. No new material has been brought on record. Therefore, by confirming the stand of Ld.CIT(A), we dismiss assessee’s appeal.

Balaji Infrastructure & Development Company Ltd. Assessment Year-2010-11

Order pronounced in the open court on 04th October, 2019. (Saktijit Dey) (Manoj Kumar Aggarwal) "ाियक सद" / Judicial Member लेखा सद" / Accountant Member