REKHA S. PUNJABI,MUMBAI vs. ACIT 19(1), MUMBAI

The assessee has filed the present appeal against the order dated 10.02.2015 passed by the Commissioner of Income Tax (Appeals)- 34, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y. 2010-11.

The assessee has raised the following grounds:- “On the facts and circumstances of the case and in law: Ground No. 1: Letting out Terrace - 'Other Sources' or House Property Income A.Y. 2010-11

The brief facts of the case are that the assessee filed her return of income on 26.08.2010 declaring total income to the tune of Rs.83,65,229/. The return of income was processed u/s 143(1) of the I.T. Act, 1961. The case was selected for scrutiny, therefore, notice u/s 143(2) of the Act dated 23.09.2011 was issued and served upon the assessee on 26.09.2011. Subsequently, notice u/s 142(1) of the Act along with questionnaire was issued on 30.12.2011 which was also served upon the assessee. The assessee was engaged in the business of construction of residential buildings. The assessee was deriving income from business, house property and income from other sources by way of interest. The assessee has shown the income from house property of Rs.5,63,723/- after claiming the deduction u/s 24 of the Act. It was noticed that the assessee has earned the said income from the two towers of the mobile companies namely Vodafone and Loop. Notice was given and after hearing the Representative of the assessee, the said income was treated as income from other sources. The assessee also claimed the legal and professional fee to the tune of Rs.9,14,501/-. The claim of the assessee was in connection with an amount of Rs.51,500/- with the M/s. B. S. Barot which was not found justifiable, therefore, the same disallowed and was added to the income of the assessee. The assessee also paid the legal fee to the tune of Rs.3,09,050/- to M/s. Wadia Ghandi &Co. and the claim of the assessee to the extent of Rs.1,38,045/- was disallowed being not found justifiable and added to the income of the assessee. The assessee also A.Y. 2010-11 paid the legal fee to the tune of Rs.2,00,000/- to M/s. Rajwadi Chawl which was also not found justifiable, therefore, the same was also added to the income of the assessee. The total disallowance on account of legal fee was to the tune of Rs.8,89,545/- which was disallowed and added to the income of the assessee. The uncertain claim of the interest was also disallowed. The total income of the assessee was assessed to the tune of Rs.1,73,90,630/-. The assessee was not satisfied, therefore, the assessee filed an appeal before the CIT(A) who partly allowed the claim of the assessee but the assessee was not satisfied on the issues which he has taken above, therefore, the assessee has filed the present appeal before us. ISSUE NO. 1:- 4. Under this issue the assessee has challenged the confirmation of the action of the AO in which the AO treated the income arising from granting license for the installation of Towers on the terrace to cellular companies i.e Loop and Vodafone aggregating to Rs.8,05,319/- under the head of income from other sources as against the income from house property. At the very outset, the Ld. Representative of the assessee has argued that the assessee has filed an application for additional evidence in which the assessee wanted to produce the copy of various agreement of tenancy which is necessary to adjudicate the matter of controversy hence additional evidence is liable to be admitted/allowed in the interest of justice. However, on the other A.Y. 2010-11 hand, the Ld. Representative of the Department has refuted the said contentions. On appraisal of the finding of the Assessing Officer and CIT(A), we noticed that the said agreements were not produced before them. These agreements speaks about the ownership/status of the terrace. It is necessary to adjudicate the matter of controversy, therefore, in the said circumstances, we admit/allow the additional evidence and set aside the finding of the CIT(A) on this issue and remand the issue before the AO to decide the matter of controversy afresh by considering the additional evidence as well as by giving an opportunity of being heard to the assessee in accordance with law. Accordingly, this issue is being decided in favour of the assessee against the revenue. ISSUE NO. 2:- 5. Issue no.2 is in connection with the disallowance of legal fee to the tune of Rs.3,09,050/- paid to M/s. Wadia Ghandy and Co. The Ld. Representative of the assessee has argued that the assessee has produced the necessary evidence before the AO as well as before the CIT(A) by producing the bill no.2033 + 11023 but these bills were not considered by the authority while passing the order, therefore, these bills are liable to be considered in accordance with law. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. On appraisal of the order passed by the Assessing Officer as well as CIT(A), we noticed that these bills were not A.Y. 2010-11