ACIT 17(3), MUMBAI vs. SANE & DOSHI ENTERPRISES, MUMBAI

PDF · subscribers
ITA 2511/MUM/2017Status: DisposedITAT Mumbai21 August 2018AY 2013-146 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that rental income from unsold premises should be treated as 'Income from House Property', following a jurisdictional High Court decision. It also upheld the deletion of generator diesel and maintenance expenses, finding that the assessee had produced sufficient evidence.

What were the facts?

The Revenue appealed the CIT(A)'s order which directed the rental income to be treated as 'Income from House Property' and allowed deductions under Section 24(a). The Revenue also contested the deletion of expenses for generator diesel and maintenance.

What were the issues?

Whether rental income from unsold premises is 'Income from House Property' or 'business income', and the allowability of generator diesel and maintenance expenses.

Which sections of the Income-tax Act were involved?

Section 24(a)

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, ‘J’ MUMBAI

Before: Shri Joginder Singh, & Shri Manoj Kumar Aggarwal

For Respondent: Shri A. Mohan- DR, Shri Rutuja N. Pawar
Hearing: 21/08/2018

सुनवाई क� तार�ख / Date of Hearing: 21/08/2018 21/08/2018 आदेश क� तार�ख /Date of Order:

M/s Sane & Doshi Enterprises आदेश / O R D E R Per Joginder Singh(Judicial Member) The Revenue is aggrieved by the impugned order dated 18/01/2017 of the Ld. First Appellate Authority, Mumbai.

The first ground raised by the Revenue pertains to directing the Ld. Assessing Officer to treat the rental income, derived by the assessee, as “Income from House Property” and allowing the deduction under section 24(a) of the Income Tax Act, 1961 (hereinafter the Act) as against the treatment of the same as “business income” ignoring the factual matrix.

2. During hearing, Shri A. Mohan, Ld. DR, advanced arguments which are identical to the ground raised by defending the addition made by the Ld. Assessing Officer. On the other hand, Rutuja N. Pawar, ld. counsel for the assessee, claimed that the impugned issue is covered in favour of the assessee by the order of the Tribunal (ITA No.1801 & 1802/Mum/2016), order dated 20/12/2017. This factual matrix was not controverted by the Revenue.

2.1. We have considered the rival submissions and perused the material available on record. In view of the above, we are reproducing hereunder the relevant portion

M/s Sane & Doshi Enterprises from the order of the Tribunal dated 20/12/2017 for ready reference and analysis:-

“These two appeals are filed by the Revenue for the Assessment Years 2012-13 and 2011-12 respectively against the order of the Learned Commissioner of Income Tax (Appeals) -28, Mumbai dated 22.01.2016.

2.

In both these appeals common grounds were raised by the Revenue except for the figures, in holding that the rental income received by the assessee on unsold premises as income from house property as against the action of the Assessing Officer in assessing the said income under the head income from business.

3.

Learned Counsel for the assessee, at the outset submits that the issue in appeal is squarely covered by the decision of the Hon'ble Jurisdictional High Court in assessee’s own case for the Assessment Years 2000-2001 to 2008-09 by order dated 09.04.2015 wherein the Hon'ble Jurisdictional High Court had upheld the order of the Tribunal in holding that the income from such property is assessable under the head income from house property but not under the head income from business and dismissed the appeals filed by the Revenue holding that no substantial question of law arises. Copy of the order is placed on record.

4.

Ld. DR fairly submitted that the issue in appeal is decided in favour of the assessee by the Hon'ble Bombay High Court.

5.

We have heard both the parties and perused the order of the Hon'ble Bombay High Court which is placed on record. On a reading of the said order we find that the Hon'ble Court held that the income from property is assessable under the head income from house property. This order of the Hon'ble Jurisdictional High Court is followed by the Ld.CIT(A) in both these appeals. In the circumstances we do not see any valid reason to interfere with the orders of the Ld.CIT(A). Thus, we reject the grounds of the Revenue.

6.

In the result both the appeals of the Revenue are dismissed.” 2.2. We find that in the aforesaid order, the Tribunal has followed the decision from Hon'ble jurisdictional High

M/s Sane & Doshi Enterprises Court in the case of assessee itself for Assessment Year 2000- 01 to 2008-09, order dated 09/04/2015, wherein, Hon'ble High Court upheld the order of the Tribunal holding that income from property is assessable under the head “Income from House Property” and not under the head “business income” by dismissing the appeal of the Revenue, thus, we find no infirmity in the order of the Ld. Commissioner of Income Tax (Appeal), resultantly, this ground of the Revenue is dismissed.

3. The next ground raised by the Revenue pertains to directing to delete the amount of Rs.3,24,432/- on account of generator diesel and maintenance expenses without appreciating the genuineness of the claim and business expediency in respect of these expenses.

3.1. The ld. counsel for the assessee invited our attention to the order of the Ld. Commissioner of Income Tax (Appeal) dated 22/01/2016 (Assessment Year 2012-13)

(page-3 and para-3), wherein, identical issue was decided in favour of the assessee and no appeal has been filed against that order by the Revenue. The Ld. DR though defended the M/s Sane & Doshi Enterprises addition but did not controvert the factual matrix as claimed above.

3.2. We have considered the rival submissions and perused the material available on record. We find that the assessee claimed an amount of Rs.4,64,316/- towards generator diesel and maintenance charges (which were disallowed by the Ld. Assessing Officer for want of evidences such as bills/invoices/third party evidences) for Assessment Year 201-13 and the First Appellate Authority has dealt with the issue in para-5.3, wherein, it was held as under:-

“These are against the action of the Assessing Officer in disallowing the Generator Diesel & Maintenance expenses of Rs.4,64,316/-. The Assessing Officer made this disallowance solely on the grounds that the appellant furnished only the ledger account of these expenses and the bills vouchers etc were not produced before him. In appeal, the appellant has produced full details of this expense including bills and vouchers. I find that the majority of the expenditure is on account of purchase of Diesel for running the Genset. A small portion is towards maintenance. I am of the opinion that the grievance of the Assessing Officer has been sufficiently met by the appellant. Accordingly, the disallowance of Rs.4,64,316/- is deleted. Grounds 6 & 7 are allowed.” We note that in the revised statement of total income, the assessee has mentioned the Generator, Diesel & Maintenance expenses, amounting to Rs.3,24,432/- and the Ld. First Appellate Authority has recorded a finding that this issue is covered by the order for Assessment Year 2012-13 and even

M/s Sane & Doshi Enterprises the Assessing Officer has not given any specific instance where the desired vouchers were not produced by the assessee and rather proper investigation was done by the Ld. Assessing Officer. Thus, in view of this factual finding, we find no infirmity in the conclusion of the Ld. Commissioner of Income Tax (Appeal) on this also.

Finally, the appeal of the Revenue is dismissed.

This Order was pronounced in the open court in the presence of Ld. representatives from both sides at the conclusion of hearing on 21/08/2018.

Sd/- Sd/- (Manoj Kumar Aggarwal) (Joginder Singh) लेखा सद�य / ACCOUNTANT MEMBER �या�यक सद�य /JUDICIAL MEMBER मुंबई Mumbai; �दनांक Dated :21/08/2018 f{x~{tÜ? P.S/.�न.स. आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant (Respective assessee) 2. ��यथ� / The Respondent. 3. आयकर आयु�त(अपील) / The CIT, Mumbai. 4. आयकर आयु�त / CIT(A)- , Mumbai, 5. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,

More judgments on Section 24(a)

All 318 judgments and leading authorities on Section 24(a) →

Recent GST High Court judgments

Search GST case law →