PHOTOPHONE P.LTD,MUMBAI vs. ITO 8(2)(4), MUMBAI

आदेश / O R D E R

Per Joginder Singh (Judicial Member) The assessee as well as the Revenue are in appeal against the respective orders of the Ld. First Appellate Authority for the respective assessment years. The assessee has also preferred cross-objections for A.Y. 2007-08.

In view of the above instruction, since, the tax effect is less than Rs.10,00,000/-, consequently, the appeal of the Revenue is not maintainable, therefore, dismissed.

6.1 The crux of the arguments advanced on behalf of the Revenue is identical to the ground raised. On the other hand, the learned counsel for the assessee contended that on identical fact, in earlier assessment year, the claim of the assessee was accepted and no appeal was filed by the department. This factual assertion of the assessee was not controverted by the Revenue.

6.2 We have considered the rival submissions and perused the material available on record. We find that the issue under hand has been discussed in detail by the learned CIT(A) in para 2.1.1 of the impugned order wherein the factual matrix has been duly considered along with the observation made in the assessment order wherein the Assessing Officer assessed the income from house property and disallowed the expenditure. Admittedly, similar issue arose for consideration as has been reproduced in para 2.3.1, wherein the income from interest was treated as income from other sources. Since no appeal was filed by the department therefore, on the principle of parity and in the absence of contrary facts, this ground of the assessee is allowed.

8.1 Considering the factual matrix and the submissions of the assessee there is no dispute to the fact that the impugned expenses were incurred by the assessee as legal and of professional fees (Rs.3,28,946/-), printing and stationery (Rs.6,623/-), travelling and conveyance expenses (Rs.54,136/),Miscellaneous expenses (Rs.39,711/- ), Audit Fees (Rs.27,575/-) etc., in our view are allowable expenses. Even otherwise, as claimed by the assessee, the department had been accepting such expenses, therefore, in the absence any contrary facts such expenses have to be allowed. This ground of the assessee is, therefore, allowed.

9.1. We have considered the rival submissions and perused the material available on record. From the Profit & Loss Account, filed by the assessee it was observed by the learned Assessing Officer that the assessee has credited a sum of Rs.9,51,738/- as other income. Out of this impugned amount it was noticed that Rs.84,816/- is rental income and the remaining amount of Rs.6,54,961/- is interest from deposits. The contention of the assessee was considered and the Assessing Officer treated the income of Rs.6,54,961/- as income from other sources. On appeal, before the Commissioner of Income Tax (Appeal), the contention of the assessee was considered. In para 2.3.2, there is conclusion by the Commissioner of Income Tax (Appeal) that the assessee itself agreed the amount to be taxed as income from other sources and thus this ground of the assessee was dismissed.

9.2. If the observation made in the assessment order, leading to addition made to the total income, conclusion drawn in the impugned order, material available on record, assertions made by the ld. respective counsel, if kept in juxtaposition and analyzed, the claim of the assessee, before us, is that the assessee had been consistently carrying on the activity of investing and earned interest on inter- corporate deposits and thus the income was offered as business income and was accepted as such in earlier years, like, Assessment years 1990-91, 1992-93, 1994-95, 1995-96 and 2001-02. In turn, the ld. DR asserted for Assessment year 2009-10, the issue was not contested by the assessee by inviting our attention to para 2.3.2 of the impugned order. The assessee explained that due to tax effect, it was not contested. Considering the totality of facts, we remand this issue to the file of the ld. Assessing Officer to examine whether identically such income was accepted by the Department and also whether the facts in earlier years as well as in the present year are identical and if found to be identical, why not accepted in the present assessment year.

After examining the facts, the ld. Assessing Officer is directed to decide in accordance with law. The assessee be given opportunity, thus, this ground is allowed for statistical purposes, consequently, this appeal is partly allowed for statistical purposes.

Finally, i. the appeal of the Revenue, is dismissed as not maintainable on low tax effect ii. C.O. No.130/Mum/2015 of the assessee is dismissed as not pressed. iii. the appeal of the Revenue is partly allowed. iv. is partly allowed for statistical purposes.

This order was pronounced in the open in the presence of ld. representatives from both sides at the conclusion of the hearing on 02/05/2016.