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Income Tax Appellate Tribunal, VISAKHAPATNAM SMC BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE
PER DUVVURU RL REDDY, Judicial Member :
This appeal filed by the assessee is against the order of the Learned Commissioner of Income Tax (Appeals)-11, Mumbai dated 29/12/2023 in DIN & Order No. ITBA/APL/S/250/2023- 24/1059190843(1), dated 29/12/2023 arising out of the order passed U/s. 143(1) of the Income Tax Act, 1961 [“the Act”] for the AY 2021-22.
2 2. Briefly stated the relevant facts of the case are that the assessee Smt. Sarada Seemakurti is a proprietary concern of M/s. Sri Sai Saraswathi Enterprises which is engaged in wholesale business of agricultural raw material. The assessee filed her return of income for the AY 2021-22 on 10/01/2022 admitting a total income of Rs. 5,03,990/-. In the tax audit report filed for the AY 2021-22, the assessee’s Auditor under the column ‘any other items of income’ has mentioned an aggregate amount of Rs. 3,17,980/-. Thereafter, the return filed by the assessee was processed by the CPC and Intimation U/s. 143(1) of the Act was issued on 05/07/2022 and the total income was computed at Rs. 8,21,970/- after making adjustment of Rs. 3,17,980/-. In the Intimation U/s. 143(1), it was mentioned by the CPC that the adjustment was made as the amount of Rs. 3,17,980/- was shown in the tax audit report as ‘any other items of income’ but the same was not mentioned in column No.5(D) of Part-A 01 ‘Any other items of income’ in the return filed by the assessee. Thus, the Ld. AP / CPC made addition of Rs. 3,17,980/- under the head ‘income from business or profession’ and passed the intimation U/s. 143(1) of the Act. Further, the Ld. AO / CPC has also levied interest of U/s. 234B and 234C of 3 the Act. Aggrieved by the order passed U/s. 143(1) of the Act, the assessee preferred an appeal before the Ld. CIT(A).
3. On appeal, the Ld. CIT(A) dismissed the appeal of the assessee by observing as under:
In view of the facts since the original intimation passed U/s. 143(1) by CPC on 05/07/2022 has been acted upon and subsequent order U/s. 154 dated 22/12/2022 has been passed by the CPC the grounds of present appeal cease to exist therefore this present ground of appeal is required to be dismissed.
Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before the Tribunal by raising the following grounds of appeal:
“1. The order of the Ld. Addl / JCIT (Appeals)-11, Mumbai is contrary to the facts and also the law applicable to the facts of the case.
The Ld. Addl. / JCIT (Appeals)-11, Mumbai is not justified in dismissing the appeal filed against the intimation U/s. 143(1) of the Act merely for the reason that the appellant also filed appeal against the order U/s. 143(1) r.w.s. 154 of the Act and appeal is pending.
3. The Ld. Addl. / JCIT (Appeals) ought to have deleted the adjustment of Rs. 3,17,980/- made by the CPC under the head ‘income from business or profession’ in the intimation U/s. 143(1) of the Act as the appellant already admitted this amount under the head ‘income from other sources’ and ‘income from house property’. Any other grounds may be urged at the time of hearing.” 4.
4 5. At the outset, the Learned Authorized Representative [“Ld. AR”] submitted that the addition was made in the Intimation U/s. 143(1) of the Act based on a mistake in the tax audit report issued by the assessee’s Chartered Accountant in Form No. 3CD. The Ld. AR further submitted that from the heading of column No. 16 of the report it appears that the said column is meant to report such of those incomes which are otherwise assessable as ‘business income’ but not credited to the profit & loss account. However, the Chartered Accountant of the assessee inadvertently reported under column 16(d) a sum of Rs. 3,17,980/- as ‘any other income’ but not credited to the Profit & Loss Account. However, these amounts were not actually in the nature of ‘business profit’ and therefore they were rightly offered to tax by the assessee under the relevant heads ie., ‘income from other sources’ (Rs. 2,93,988/-) and ‘income from house property (Rs. 16,800/-). Therefore, the Ld. AR pleaded that the addition of Rs. 3,17,980/- is not warranted as the same amounts to double taxation and therefore the addition of Rs. 3,17,980/- may kindly be deleted.
5 6. On the other hand, the Learned Departmental Representative [“Ld. DR”] heavily relied on the orders of the Ld. Revenue Authorities and argued in support of the same.
I have heard both the sides and perused the material available on record as well as the orders of the Ld. Revenue Authorities. It is a fact that in the audit report, the assessee’s Chartered Accountant has reported under column 16(d) a sum of Rs. 3,17,980/- as ‘any other income’ but not credited to the Profit & Loss Account. This amount includes the following items viz., (i) sundry interests (Rs. 2,88,000/-), (ii) interest on savings account (Rs. 2,826/-), (iii) dividend from shares (Rs. 2,199/-), (iv) interest from HDFC-RD (Rs. 963/-) and (v) rents received (Rs. 24,000/-). While making the addition in the Intimation passed U/s. 143(1) of the Act, the Ld. AO / CPC was of the view since the amount of Rs. 3,17,980/- was mentioned in the tax audit report as ‘any other items of income’, the same is required to be mentioned in Column No.5(D) of Part A 01 under the head ‘any other items of income’ while filing the return of income. Since it is not mentioned in the said Column No. 5(D) of Part A 01, the Ld. AO / CPC made the addition. I have also carefully gone through the return of income filed by the assessee for the AY 6 2021-22. On careful perusal of the return of income filed by the assessee, I find that the assessee has admitted (i) Rs. 2,56,485/- under the head ‘income from house property’; (ii) Rs. 16,800/- was admitted under the head ‘income from house property’ and (iii) Rs. 2,93,988/- was admitted under the head ‘income from other sources’. Therefore, I am of the considered view that since the assessee has admitted Rs. 3,17,980/- (aggregating of the items (i) to (v) as mentioned above) in the respective heads of income while filing the return of income, it is not necessary to include these items in Part A 01 of the return of income under ‘any other items of income’. On this issue I find merit in the argument of the Ld. AR. Therefore, I am of the considered view that the addition made by the Ld. AO / CPC in the Intimation passed U/s. 143(1) of the Act under the head ‘income from business or profession’ is not warranted and hence I hereby set- aside the orders passed by the Ld. Revenue Authorities and delete the addition made by the Ld. AO. It is ordered accordingly.
In the result, appeal filed by the assessee is allowed.
7 Pronounced in the open Court on 08th August, 2024.
Sd/- (दु�वू� आर.एल रे�ी) (DUVVURU RL REDDY) �याियकसद�य/JUDICIAL MEMBER Dated :08/08/2024 OKK - SPS आदेश की �ितिलिप अ�ेिषत /Copy of the order forwarded to:- 1. िनधा�रती/ The Assessee – Seemakurti Sarada, D.No. 5-314, Prop. Sri Sai Saraswathi Enterprises, 2nd Line, Baba Nagar, Rajam, Srikakulam Dist, Andhra Pradesh – 532127. 2. राज�व/The Revenue – Income Tax Office, Aayakar Bhavan, Palakonda Road, Srikakulam, Andhra Pradesh – 532001.
The Principal Commissioner of Income Tax, 4.आयकर आयु� (अपील)/ The Commissioner of Income Tax (Appeals), 5. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, िवशाखापटणम/ DR, ITAT, Visakhapatnam 6.गाड� फ़ाईल / Guard file आदेशानुसार / BY ORDER
Sr. Private Secretary ITAT, Visakhapatnam