DCIT/CIR-5/KOL, KOLKATA vs. M/S BAGARIA MORE CO. LTD., KOLKATA

The appellant Revenue filed this appeal with a delay of 136 days and the reasons stated in the affidavit are that the AO was busy with time barred cases etc. The DR submitted that the AO got ./2013 Assessment year: 2008-2009 Page 2 of 6 engaged in preparation of papers in this appeal, as well as, other time-barred appeals and prayed to condone the delay in the interest of justice. The A.R. pointed out that the AO could only explain the delay from the date on which the limitation for filing appeal expired but the AO did not explain the reasons for the period between 26.10.12 and 17.01.2013. But for the reasons stated in the affidavit, we are of the opinion in the interest of justice, that the reasons submitted are reasonable, therefore the delay of 136 days condoned and appeal of the Revenue is admitted.

The brief facts of the case are that the assessee is a company and dealing in various businesses i.e. trading in jute, sarees and financing. The return of income filed on 24.09.2009 declaring Rs.80,13,330/- as its total income and it was processed under section 143(1) of the Act. Under scrutiny, notices under section 143(2), 115WE(2) and 142(1) of the Act were issued. The case of the assessee was represented by the A.R.

During the course of assessment proceedings AO found that the assessee has debited expenses of Rs.46,62,285/- from the rental income. The said expenses relating to service and maintenance charges, staff welfare and electric charges. The AO was of the view that as per the provisions of the income tax the assessee is entitled to get relief of only 30% of the rental income u/s 24(a) and taxes paid for the property. The AO computed the house property income as below:

Accordingly, the expenses of Rs.46,62,285/- was disallowed and added back to the total income of the assessee

The CIT-A, in first appeal, observed that the opinion of the AO that assessee could not prove that income received by the assessee included service charges is contrary to facts on record and that the assessee could produce before him agreement with only one tenant, is also contrary to the facts on record as the said issue was discussed in detail in the assessment year 2007-08 in assessee’s own case in Appeal No. Appeal No. 1544/CIT(A)-VI/KoIICircle- 5/09-101 dated 19/10/2012 taking into consideration the finding of the Tribunal in assessee’s own case for earlier years. The CIT-A following the same deleted the addition of Rs.46,62,285/- as made by the AO.

Before us, The Ld. DR relied on the orders of AO and Ld. AR submitted that this Tribunal considered the issue on hand for earlier years and taking into consideration of the same the claim of expenses on rental income were allowed for assessment years 2002- 03, 2004-05 to to 2006-07 by the AO and relied on CIT-A’s order. ./2013 Assessment year: 2008-2009 Page 4 of 6 8. We find that the assessee company earned income from rent and service charges received from tenants in respect of building constructed by it on leasehold land like earlier years. The said expenses were incurred for providing services and amenities to tenants. As per practice adopted by the assessee in earlier years the claimed expenses were reduced from the gross rent received which includes service charges. This Tribunal allowed the said expenses which was followed by the CIT(A) and the AO accepted such claims made by the assessee in earlier years. The observation of which is reproduced herein below

In the result, the appeal filed by the Revenue is dismissed.