Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, DELHI BENCH :H: DELHI
Before: SHRI SAKTIJIT DEY, VICE- & DR. B.R.R. KUMAR
IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH :H: DELHI) BEFORE SHRI SAKTIJIT DEY, VICE-PRESIDENT & DR. B.R.R. KUMAR, ACCOUNTANT MEMBER
ITA No. 5912/Del/2019 Assessment Year: 2014-15 DCIT, Circle-27(1), U & I Business Services Pvt. New Delhi Vs. Ltd., F-41, NDSE Part-I, New Delhi-1100 49 (PAN:AAACU0461E) (Appellant) (Respondent) Present for: Department by : Ms. Sapna Bhatia, CIT - DR Assessee by : Shri NL Anand, Adv.
Date of Hearing : 12.10.2023 Date of Pronouncement : 25.10.2023
O R D E R PER SAKTIJIT DEY, VICE PRESIDENT: This is an appeal by the Revenue against order dated 10.04.2019 of
learned Commissioner of Income-Tax (Appeals)-19, New Delhi for the
assessment year 2014-15. The effective grounds raised by the Revenue
are as under:
Whether on facts and in the circumstances of the case the Ld. CIT(A) has erred in law in deleting the disallowance of Rs.1,17,26,787 made u/s. 24(a) of the Income-Tax Act, 1961 by the AO.” 2. Whether on facts and in the circumstances of the case the Ld. CIT(A) has erred in law in deleting the disallowance of Rs.48,00,000/- made on account of rental expenses, by the AO.”
2 ITA No.5912 /Del/2019 AY: 2014-15 2. Briefly, the facts are, assessee is a resident corporate entity stated
to be engaged in the business of leasing of property. For the assessment
year under dispute, assessee filed its return of income on 30.10.2014
declaring income of Rs.3,95,29,220. While verifying the return of
income filed by the assessee during assessment proceedings, the
Assessing Officer noticed that the rental income received of
Rs.4,58,97,039 from letting out a property to Reliance Retail Ltd. has
been offered to tax under the head “income from house property”.
Being of the view that such income has to be treated as business
income, the Assessing Officer issued a show cause notice to the assessee
and also directed the assessee to furnish its Memorandum of
Association. After perusing the Memorandum of Association, the
Assessing Officer observed that as per the objects, the rental income
received by the assessee has to be treated as business income.
Accordingly, he assessed the income under the head “business and
profession”.
Being aggrieved with the aforesaid addition, the assessee preferred
an appeal before learned First Appellate Authority. Being convinced
3 ITA No.5912 /Del/2019 AY: 2014-15 with the submissions of the assessee, learned Commissioner (Appeals)
accepted assessee’s claim that the rental income earned has to be
assessed as income from house property.
We have considered rival submissions and perused the material on
record.
As could be seen from the facts and material on record, assessee
had two different properties, one located at Sector-32, Gurgaon and the
other at Sector-29, Gurgaon. The property at Sector-32, Gurgaon has
been let out to Greynium Information Technologies Pvt. Ltd. as a
business centre with various types of additional services such as staff
assistance, reception services, photocopy, FAX, counter services, car
parking services etc. for which the lease rent has been offered as income
from business. However, the property located at Sector-29, Gurgaon has
been let out to M/s. Reliance Retail Ltd. without any
additional/associated services. Hence, the rental income received has
been offered as income from house property. It is also observed that the
rental income received from Reliance Retail Ltd. has been assessed and
offered to tax as income from house property from past assessment
4 ITA No.5912 /Del/2019 AY: 2014-15 years. The aforesaid factual position remains uncontroverted before us.
Thus, in view of the aforesaid, we are inclined to uphold the decision of
learned First Appellate Authority in treating the rental income as income
from house property and allow deduction under Section 24(a) of the Act.
The second issue relates to deletion of disallowance of
Rs.48,00,000.
Briefly, the facts relating to this issue are, in course of assessment
proceedings, the Assessing Officer noticed that the assessee has paid
rent of Rs.60,00,000 to two persons, namely, Shri Harbans Kohli and
Smt. Chanchal Rani Kohli. Being of the view that the concerned
premises were not used for the purpose of assessee’s business, the
Assessing Officer disallowed the rental expenses of Rs.60,00,000.
Assessee contested the aforesaid disallowance before learned First
Appellate Authority.
Having factually verified the issue, learned Commissioner
(Appeals) observed that out of three properties taken on rent, one of the
properties situated at F-41, NDSE Part-I is being used as registered
office and business premises of the assessee as per the documents
5 ITA No.5912 /Del/2019 AY: 2014-15 available from Ministry of Corporate Affairs’ website, as well as copies
of bills from various vendors address, to the said address. Thus, he held
that, since, the property is being used for business, rent paid of
Rs.48,00,000 relating to that property has to be allowed as business
expenses. Accordingly, he deleted the addition to the extent of
Rs.48,00,000.
Having considered rival submissions, we find that learned First
Appellate Authority has recorded a factual finding that one of the
properties taken on rent, is actually used for the business of the assessee.
The Revenue has not been able to controvert the aforesaid factual
finding and that being the case, we decline to interfere with the decision
of learned First Appellate Authority. Grounds are dismissed.
In the result, the appeal filed by the Revenue is dismissed. Order pronounced in the open court on 25 .10.2023. Sd/- Sd/- ( DR. BRR KUMAR ) (SAKTIJIT DEY) ACCOUNTANT MEMBER VICE-PRESIDENT Dated:25th October, 2023 Mohan Lal
6 ITA No.5912 /Del/2019 AY: 2014-15 Copy forwarded to:
Applicant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi