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Income Tax Appellate Tribunal, “E” BENCH, MUMBAI
Before: SHRI SHAMIM YAHYA, AM & SHRI AMARJIT SINGH, JM
O R D E R Per Shamim Yahya, A. M.: This appeal by the assessee is directed against the order by the Commissioner of Income Tax (Appeals) dated 25.12.2013 and pertains to the assessment year 2009- 10.
The grounds of appeal read as under: I. The Ld. Commissioner of Income Tax (Appeals) is not justified in confirming the addition of Rs. 6,45,000/- made by the Ld. Assessing officer by wrongly considering the Income from house property as income from consultancy under the head business and profession. II. The Ld. Commissioner of Income Tax (Appeals) is not justified in not following any procedure/enquiry for verification of claim made by assessee. He
(A.Y. 2009-10) Shri Shivkumar Bhardwaj vs. Addl. CIT also failed to give proper opportunity of being heard before confirming any addition. III. The determination of rental income of Rs, 6,45,000/- as professional income by the Ld. Commissioner of Income Tax (Appeals) is wrong, perverse, not based on evidences, opposed to evidences on records and based on surmises and conjecture.
Brief facts of the case are that the assessee is an individual and offering consultancy services and has shown income from salary, house property, business, capital gains and other sources during the period under consideration. From the details filed, it was noticed by the Assessing Officer that the assessee had shown rent received at Rs.12,69,169/- as income from house property. The copy of the leave and license submitted showed that the assessee and M/s JCB Manufacturing Ltd had entered into leave and license agreement to pay Rs.1,00,000/- license fee to the assessee w.e.f. 01/09/2008 for the property at Pune. On being asked to reconcile the rent received at Rs. 12,69,169/-, it was submitted by the assessee that his bungalow at Pune has been given on rent at a monthly rent of Rs. 1,00,000/- per month to M/s JCB Manufacturing Ltd. At the end of the year the assessee had received TDS certificates showing total rental income of Rs. 12.69.169/- and accordingly assessee booked the rental income as per TDS certificates and offered the same to tax.
The Assessing Officer did not accept the above arguments of the assessee and contended that the perusal of the TDS certificates show that the TDS has been deducted on technical and professional services. It was further noticed by the Assessing Officer that the assessee had received Rs.2,55,000/- as on 31/03/2009 and Rs.3,90,000/- as on 20/10/2008 which is not the part of the rent received by the (A.Y. 2009-10) Shri Shivkumar Bhardwaj vs. Addl. CIT assessee. According to Assessing Officer, as per the provisions governing the income from house property, what can be taxed as income from house property is the only the rent received from the house property.
In view of the above facts, the Assessing Officer concluded that an amount of Rs. 6,45,000/- (2,55,000+ 3,90,000) is to be treated as income from services/technical fee and to be taxed as income from business or profession and the balance income of Rs.6,24,169/- is to be treated as income from house property. Accordingly, the Assessing Officer treated this amount of Rs.6,45,000/- as income from business and profession and added back this amount under the head professional and technical fee.
Upon the assessee’s appeal the ld. Commissioner of Income Tax (Appeals) noted that during the course of appellate proceedings, while opposing the above action of the Assessing Officer, the ld. Counsel of the assessee has reiterated the same arguments taken before the Assessing Officer during the assessment proceedings.
However, he did not find any merit in these arguments. The ld. Counsel of the assessee has further contended that the assessee received TDS certificate from JCB Manufacturing Ltd u/s 194-I amounting to Rs.2,14,358/- deducted on total receipts Rs.12,69,169/- and the assessee had booked the entire amount on which the TDS was deducted as rental income and offered the same for tax under the head income from house property.
(A.Y. 2009-10) Shri Shivkumar Bhardwaj vs. Addl. CIT 7. However, the ld. Commissioner of Income Tax (Appeals) was not convinced. He held as under:
The above arguments of the appellant cannot be accepted. The appellant has entered into an agreement for leave licence with JCB Manufacturing Ltd w.e.f. 01/09/2008 for a monthly rent of Rs.1,00,000/- and therefore the rental income as on 31/03/2009 cannot be Rs.12,69,169/- for six months. Moreover, It is clear from the TDS certificate submitted that two payments of Rs.2,55,000/- received on 31/03/2009 and Rs.3,90,000/- as on 20/10/2008 cannot be rental income as these are lump sum payments and not the monthly payment of rent amounting to Rs.1,00,000/-. The monthly rental payments are reflected separately in the TDS certificate submitted. The appellant neither during the assessment nor during the appellate proceedings has placed any evidence on record to prove the nature of these payments and therefore the conclusions arrived at by the AO treating the income to he professional income, appears to be correct. The income of Rs.6,45,000/- reflected in the TDS certificate is not a rental income from house property. The onus is on the appellant to prove the nature of income credited but he has failed to prove the same. Therefore, I do not find any reason to interfere with the decision of the AO treating an amount of Rs.6,45,000/-as income from business and profession.
Against the above order, the assessee is in appeal before the ITAT.
We have heard both the counsel and perused the records. Learned counsel of the assessee submitted that authorities below have not properly appreciated the issue.
He pleaded that the matter should be remitted back to the file of assessing officer for proper application.
Upon careful consideration we find that addition in this case has been made by the Assessing Officer on account of the noting in the TDS certificate that the amount was deducted on account of technical and professional services. However, the assessee insists that the same was rental receipt. On the facts and circumstances of the case, in our considered opinion, the matter could have been properly enquired with the (A.Y. 2009-10) Shri Shivkumar Bhardwaj vs. Addl. CIT deductor also and thereafter proper decision could have been taken after verifying the facts. Hence, we are of the considered opinion that since proper facts have not been brought on record, it will be in the interest of justice to remit the issue to the file of the assessing officer. Assessing officer is directed to consider the issue afresh after giving the assessee proper opportunity of being heard. The assessee is also directed to co- operate and bring necessary evidence on record to support its claim.
In the result, this appeal by the assessee stands allowed for statistical purposes. प�रणामतः �नधा�रती सां�यक�य उ�दे�य के �लए �वीकृत क� जाती है । Order pronounced in the open court on 07.02.2018 Sd/- Sd/- (Amarjit Singh) (Shamim Yahya) �या�यक सद�य / Judicial Member लेखा सद�य / Accountant Member मुंबई Mumbai; �दनांक Dated : 07.02.2018 व.�न.स./Roshani, Sr. PS आदेश क� ��त�ल�प अ�े�षत/Copy of the Order forwarded to : अपीलाथ� / The Appellant 1. ��यथ� / The Respondent 2. आयकर आयु�त(अपील) / The CIT(A) 3. आयकर आयु�त / CIT - concerned 4. �वभागीय ��त�न�ध, आयकर अपील�य अ�धकरण, मुंबई / DR, ITAT, Mumbai 5. गाड� फाईल / Guard File 6. आदेशानुसार/ BY ORDER,