BIPIN M. GANDHI,MUMBAI vs. C.I.T.24, MUMBAI

At the time of hearing, it was noticed that inspite of fixing of appeal on more than one occasion and service of notice by RPAD, none appeared on behalf of the appellant-assessee. On the other hand, the ld. DR appeared on behalf of the Revenue.

Accordingly, in view of Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, the appeal of the assessee is being disposed off ex-parte the appellant-assessee after hearing the respondent-Revenue on merits and perusing the orders of the authorities below as under.

The Commissioner has found the assessment order passed by the Assessing Officer dated 14.03.2008 as erroneous insofar as it is prejudicial to the interests of the Revenue within the meaning of Sec. 263 of the Act on two Grounds. Firstly, on account of quantum of income assessable under the head ‘income from house property’. A perusal of the order of the Commissioner reveals that it was noted that the assessee was deriving rental incomes in respect of two properties; firstly, from Tata Motors Ltd. and secondly, from Laxmi Autowild (P) Ltd. As per the details discussed by the Commissioner in para 3, the rental income from the two properties worked out to Rs.3,66,000/- whereas assessee had shown rental income of Rs.2,40,817/-, which as per the Commissioner was wrongly accepted by the Assessing Officer in the assessment order. The Commissioner further referred to the submissions put forth by the assessee wherein it was explained that on account of termination of the Leave & Licence agreement of Tata Motors Ltd. in the year, there was a difference in the actual rent received vis-a-vis the contracted rent for the full year. The Commissioner has restored this matter back to the file of the Assessing Officer for proper verification after allowing the assessee an opportunity of being heard.

The second issue relates to Capital Gains declared by the assessee on account of sale of development rights of Rs.20,57,000/- and the claim of exemption u/s 54EC of Rs.2,10,000/- on account of investment in the bonds of NABARD. As per the Commissioner, there was no evidence of extra FSI available, which could have been sold by the assessee and, therefore, it has been inferred that the amount received is merely compensation for allowing the developer to construct two more floors in the existing building. As per the Commissioner, in the absence of the requisite proof, the amount offered for assessment and accepted by the Assessing Officer as Capital Gains was wrong and instead, it was to be treated as ‘income from other sources’ and consequently the deduction u/s 54EC of the Act was also wrongly claimed and allowed in the assessment order. On this aspect, the Commissioner considered the submissions put forth by the assessee, but in the absence of the requisite proof, directed the Assessing Officer to treat the impugned consideration to be assessable under the head ‘income from other sources’ and also denied the deduction u/s 54EC of the Act.

Having considered the arguments put forth by the ld. DR as also the discussion in the order of the Commissioner, we find that there is no material on record which would enable us to interfere with the findings of the Commissioner, which we hereby affirm. Thus, assessee fails in his appeal.

In the result, appeal of the assessee is dismissed.