What did the Tribunal hold?

The Tribunal found it unclear whether the Rs. 4,08,000 rental income was already included in the declared business profit of Rs. 40,000. Therefore, the matter was remitted to the Assessing Officer for verification.

The assessee received rental income of Rs. 4,08,000 from Torrent Power Limited, on which TDS was claimed. However, this income was not initially declared in the return. The assessee claimed expenses were incurred to earn this income.

What were the issues?

Whether the rental income received was already accounted for in the business profit, and if so, whether a separate addition was justified.

Shri Parshottamdas N.Deladia… vs ITO | ITAT Ahmedabad 2017

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: Pramod Kumar]

ITA No. 1077/Ahd 2013 Assessment Year : 2009-10 Page 1 of 3 IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD [Before Pramod Kumar, Accountant Member] ITA No.1077/Ahd/2013 Assessment Year: 2009-10 Purshottam N. Deladia .......…………...........Appellant Prop. Mayur Electric Works, U-71, Sadhaya Darhsan, Opp. Bhulkabhavan School, Adajan Road, Surat. [PAN : ABPPD 0177 K] Vs. Income-tax Officer Ward-3(4), Surat. ............................Respondent Appearances by: MK Patel for the appellant Dinesh Singh for the respondent Date of concluding the hearing : 28.06.2017 Date of pronouncing the order : 22.09.2017 O R D E R

By way of this appeal, the assessee appellant has challenged correctness of the order dated 11th February 2013, passed by the learned CIT(A)-IV, Surat, in the matter of assessment under section 143(3) of the Income Tax Act, 1961 (‘the Act hereinafter’), for the Assessment Year 2009-10.

Grievances raised by the appellant are as follows:-

“1. On the facts and in the circumstances of the case as well as law on the subject, the learned Commissioner of the Income-tax (Appeals) has erred in confirming the action of the assessing officer in making addition to Rs.4,08,000/- on account of rental income received from torrent power ltd. 2. It is therefore prayed that the above addition may please be deleted as learned members of the tribunal may deem it proper.”

ITA No. 1077/Ahd 2013 Assessment Year : 2009-10 Page 2 of 3 3. To adjudicate on this appeal it is sufficient to take not of the fact that the appellant had claimed TDS on rental income of Rs.4,08,000/- received from Torrent Power Limited. The Assessing Officer, however, noted that this rental income was not shown in the original or revised return filed by the assessee. When he probed the matter further, it was explained by the assessee that the entire amount received of Rs.4,08,000/- could not be treated as assessee’s income in as much as he had incurred expenditure of salary of generator operators, maintenance, rent etc. which was duly disclosed in the accounts. Assessing Officer, however, bushed aside the plea of the assessee and made an addition of Rs.4,08,000/- on account of rent received from Torrent Power Limited. Aggrieved, assessee carried the matter in appeal before the learned CIT(A) but without any success. The learned CIT(A) noted that the assessee has shown net profit from business at Rs.40,000/- but observed that it is not clear whether or not the said amount of Rs.4,08,000/- is included in the business receipts. The assessee is aggrieved of the learned CIT(A)’s confirming the impugned addition and is in further appeal before me.

I have heard the rival submissions, perused the material on record and duly considered facts of the case in the light of the applicable legal position.

I find that there is certainly no dispute with respect to receipt of Rs.4,08,000/- by the assessee from Torrent Power Limited and that the assessee must have incurred the expenses for earning this income, but then, it is not clear whether the business profit of Rs.40,000/-, which has been shown by the assessee is computed after taking into account this receipt of Rs.4,08,000/-. In case the receipt f Rs.4,08,000/- is already included in the business receipts on which the profit of Rs.40,000/- has been worked out and offered to tax, obviously there cannot be any justification for making a separate addition of Rs.4,08,000/-. In this view of the matter, I deem it fit and proper to remit the matter to the file of Assessing Officer for limited verification as to whether or not business receipt in respect of generator hiring on which assessee has offered profit of Rs.40,000/- to tax was included. If so, there cannot obviously be any basis for the impugned addition. The Assessing Officer will examine the matter afresh in the light of above, after giving reasonable opportunity of hearing to the assessee and in accordance with law and by way of a speaking order. I direct so.

ITA No. 1077/Ahd 2013 Assessment Year : 2009-10 Page 3 of 3 6. In the result, appeal is allowed for statistical purposes. Pronounced in the open court today on the 22nd day of September, 2017.

Sd/- Pramod Kumar (Accountant Member) Ahmedabad, the 22nd day of September, 2017 Copies to: (1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order

SHRI PARSHOTTAMDAS N.DELADIA,SURAT vs. THE INCOME TAX OFFICER,WARD-3(4), SURAT

What did the Tribunal hold?

What were the facts?

What were the issues?

Which sections of the Income-tax Act were involved?

Recent GST High Court judgments