TIRUVENGADAM INVESTMENTS P LTD.,CHENNAI vs. ACIT, CHENNAI

The assessee has filed an appeal against the order of the Commissioner of Income Tax (Appeals)-III, Chennai in 10/A.III dated 18.02.2013

The assessee has raised three substantive grounds (i) the Ld. CIT(A) erred in sustaining disallowance of MCH Taxes claim and society maintenance charges of Rs. 13,71,437/-, (ii) the Ld. CIT(A) erred in confirming the disallowance u/s. 14A r.w.r. 8D and (iii) Ld. CIT(A) erred in accepting the disallowance of expenses towards Login Ad’s and Hanza Zone for want of additional evidence. At the time of hearing the Ld AR has not pressed ground No. 12 and made endorsement.

The Brief facts of the case are that the assessee is in the business of financial investments and filed the Return of income on 21.10.2002 with total loss of Rs. 32,06,051/-. Subsequently, the case was selected for scrutiny and notice u/s. 148 of the Act was issued. In compliance to the notice, the Ld. AR of the assessee filed the reply on 09.12.2009 to treat return of income filed as compliance. Further, the Ld. AO issued notice u/s. 143(2) of the Act. The Ld. AR appeared from time to time and furnished the details. The Assessing Officer on perusal of the financial statements found that the assessee has claimed from income from house property, payment of society maintenance charges of Rs. 13,71,437/- and filed the explanations that these charges includes municipal taxes of Rs. 10,80,112/- and Rs. 2,91,325/- other expenses and the Municipal Tax Receipts are in respect of Pusa Road property at New Delhi Rs. 9,38,427/- as furnished by the assesseee relate to the financial year 2001-02. Since, the assessee could not support with evidence

Aggrieved by the order, the assessee filed an appeal before the CIT(A). Before the Ld. CIT(A) the Ld. AR argued the grounds and substantiated the facts with evidence for claim of deduction. Whereas, the Ld. CIT(A) has dismissed the claim of municipal tax paid as the assessee has not produced any proof in the case of municipal tax and therefore Ld. CIT(A) due to non-availability of the evidence confirm the addition of Rs. 13,71,437/-.

Aggrieved by the CIT(A) order, the assessee filed an appeal before the Tribunal. Before us, on the first disputed issue, the Ld. AR argued that the :- 4 -: ITA No.1230/Mds/2013 assessee has paid municipal tax of the property and claim deduction under income from house property and was disclosed under society maintenance charges Rs. 13,71,437/- and prayed for allowing the appeal. Whereas, the Ld. DR relied on the orders of lower authorities

We heard the rival submissions, perused the material on record and judicial decisions. The Ld. AR argued that the assessee is entitled for deduction of municipal tax in respect of properties situated at different places and also produced letter from society to whom tax have been paid and ignoring these facts the claim was disallowed. We are of the opinion that the municipal tax paid during the financial year has to be allowed to the assessee irrespective of the fact being outstanding of earlier years. Further, the assessee should be provided an opportunity to substantiate its genuineness towards claim and therefore in the interest of justice, we remit the disputed issue to the file of the Assessing Officer to verify and examine the municipal tax paid along with the society maintenance charges before passing the order on merits.

In the result, the assessee appeal is allowed for statistical purpose.