M/s. Jethmal Banthia, HUF, Kolkata v. ACIT, Central Circle - XVIII, Kolkata, Kolkata

ITA 104/KOL/2011 | 2005-2006
Pronouncement Date: 11-03-2011 | Result: Allowed

Appeal Details

RSA Number 10423514 RSA 2011
Assessee PAN AABHJ5399G
Bench Kolkata
Appeal Number ITA 104/KOL/2011
Duration Of Justice 1 month(s) 28 day(s)
Appellant M/s. Jethmal Banthia, HUF, Kolkata
Respondent ACIT, Central Circle - XVIII, Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 11-03-2011
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted SMC
Tribunal Order Date 11-03-2011
Assessment Year 2005-2006
Appeal Filed On 14-01-2011
Judgment Text
. . IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH : KOLKATA ( ) . . [BEFORE HONBLE SHRI B.R.MITTAL JUDICIAL MEMBER] / I.T.A NO. 104/KOL/2011 ! ! ! ! / ASSESSMENT YEAR : 2005-2006 M/S. JETHMAL BANTHIA HUF -VS.- ASSISTA NT COMMISSIONER OF INCOME TAX KOLKATA (PAN : AABHJ 5399 G) CENTRAL CIRCLE- XVIII KOLKATA ( '# '# '# '# /APPELLANT ) ( $%'# $%'# $%'# $%'# / RESPONDENT ) '# '# '# '# / FOR THE APPELLANT : SHRI S.M. SURANA A.R. $%'# $%'# $%'# $%'# / FOR THE RESPONDENT : SHRI S.K. MALAKAR SR. D.R. &' &' &' &' / ORDER THE ASSESSEE HAS FILED THIS APPEAL FOR ASSESSMENT YEAR 2005-06 AGAINST THE ORDER OF LD. COMMISSIONER OF INCOME-TAX (APPEALS) CENTRAL-II K OLKATA DATED 16.12.2010 ON THE FOLLOWING GROUNDS :- (1) FOR THAT THE ORDER OF THE LD. CIT(A.) IS ARBITR ARY ILLEGAL AND BAD IN LAW. (2) FOR THAT THE PROCEEDINGS INITIATED UNDER SECTIO N. 147 WERE NOT IN ACCORDANCE WITH LAW SINCE IT IS A MERE CHANGE OF O PINION SINCE THE AO DULY APPLIED HIS MIND WHILE COMPLETING THE ORIGINAL ASSESSMENT ON THE FACTS OF THE CASE. (3) FOR THAT THE LD. AO ERRED IN APPLYING THE PROVI SIONS UNDER SECTION. 147 WHEN THE SAME FACTS CONTINUED FROM EARLIER YEARS DU LY ACCEPTED BY THE DEPARTMENT AND THEREFORE THERE WAS NO OCCASION TO CHANGE THE OPINION IN THIS PARTICULAR YEAR. (4) FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ACTION UNDER SECTION. 147 WAS NOT JUSTIFIED. (5) FOR THAT EVEN ON MERITS THE AO WAS NOT JUSTIFI ED IN NOT ACCEPTING THE EXPLANATION FILED BY THE ASSESSEE WHEN THERE WAS NO EVIDENCE TO THE CONTRARY AND THE EXPENSES OF ELECTRICITY INCURRING FOR EARNING THE HOUSE PROPERTY INCOME WERE PROVED WHICH WAS AN OUTGOING F ROM GROSS RENTAL FOR THE PURPOSE OF ARRIVING AT THE ANNUAL VALUE. ITA NO.104/KOL./2011 2 (6) FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ADDITIONS MADE BY THE AO MAY BE DELETED. (7) FOR THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE THE ORDER OF THE CIT(A.) BE MODIFIED AND THE ASSESSEE BE GIVEN THE R ELIEF PRAYED FOR. 2. I HAVE HEARD THE LD. REPRESENTATIVES OF THE PART IES AND HAVE PERUSED THE ORDERS OF THE AUTHORITIES BELOW. I OBSERVE THAT THE ASSESSEE FILE D THE RETURN DISCLOSING TOTAL INCOME OF RS.58 638/-. IT IS OBSERVED THAT THE ASSESSEE IN TH E COMPUTATION FILED DISCLOSED RENTAL INCOME INCLUDING ELECTRICITY CHARGES OF RS.3 10 503/- AND CLAIMED THE DEDUCTION FOR PAYMENT OF ELECTRICITY CHARGES OF RS.2 45 792/-. THE ASSESSEE AFTER CLAIMING STANDARD DEDUCTION ETC. AS PER SECTION 24 OF THE INCOME TAX ACT DISCLOSED THE INC OME FROM HOUSE PROPERTY AT RS.29 139/-. I OBSERVE THAT THE ASSESSING OFFICER COMPLETED THE AS SESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT ON 30.04.2007. THEREAFTER THE ASSES SING OFFICER INITIATED THE RE-ASSESSMENT PROCEEDINGS BY ISSUING NOTICE UNDER SECTION 148 OF THE ACT ON 11.03.2010 ON THE GROUND THAT THE ASSESSEE COULD NOT CLAIM ELECTRICITY CHARGES OF RS.2 45 792/- AS DEDUCTION WHILE COMPUTING HOUSE PROPERTY INCOME. ACCORDINGLY THE ASSESSING OF FICER COMPLETED THE ASSESSMENT UNDER SECTION 147/ 143(3) ON 03.08.2010 BY ADDING BACK TH E ELECTRICITY EXPENSES OF RS.2 45 792/- WHICH WAS ORIGINALLY ALLOWED AS DEDUCTION OUT OF HO USE PROPERTY INCOME. THE ASSESSING OFFICER DID NOT ACCEPT THE CONTENTION OF THE ASSESS EE THAT THE TOTAL RENT RECEIVED SHOWN WAS A CONSOLIDATED SUM CONSISTING OF RENT COMPONENT AND REIMBURSEMENT OF ELECTRICITY CHARGES INCURRED BY TENANTS. IT IS OBSERVED THAT THE ASSESE E CONTENDED THAT THE SAID PROCEDURE WAS FOLLOWED FOR THE LAST 30 YEARS. IT IS ALSO OBSERVED THAT THE ASSESSEE FURNISHED THE BREAK-UP OF THE RENT AND THE ELECTRICITY EXPENSES REIMBURSED BY THE TENANTS TO THE ASSESSEE THE DETAILS OF WHICH ARE ALSO GIVEN BY THE LD. CIT(A.) IN HIS ORDER FROM PAGES 3 TO 5 OF THE IMPUGNED ORDER. THE LD. CIT(A.) HAS CONFIRMED THE ACTION OF THE ASSESSING O FFICER IN ADDING BACK THE ELECTRICITY EXPENSES OF RS.2 45 792/- ON THE GROUND THAT THE SA ME IS NOT ALLOWABLE AS DEDUCTION AS PER SECTION 24 OF THE INCOME TAX ACT. LD. CIT(A.) HAS A LSO CONFIRMED THE ACTION OF THE ASSESSING OFFICER IN INITIATING REASSESSMENT PROCEEDINGS. 3. AT THE TIME OF HEARING THE LD. AUTHORIZED REPRE SENTATIVE OF THE ASSESSEE SUBMITTED THAT THE RE-ASSESSMENT PROCEEDING HAS BEEN INITIATED MER ELY FOR CHANGE OF OPINION BY THE ASSESSING OFFICER. HE SUBMITTED THAT THE ASSESSEE FURNISHED A LL THE REQUISITE DETAILS AT THE TIME OF ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER AC CEPTED THE STAND OF THE ASSESSEE THAT ITA NO.104/KOL./2011 3 ELECTRICITY EXPENSES AND RENT RECEIVED FROM THE VAR IOUS TENANTS WAS SHOWN CONSOLIDATED AND THE ELECTRICITY REIMBURSEMENT WAS DEDUCTED WHILE CALCUL ATING INCOME FROM HOUSE PROPERTY. HE SUBMITTED THAT THE INITIATION OF RE-ASSESSMENT PROC EEDINGS IS NOT JUSTIFIED AS THE ASSESSING OFFICER AT THE TIME OF MAKING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT APPLIED HIS MIND AND FOLLOWING THE PAST PRACTICE FOR THE LAST 30 YEA RS ALLOWED THE DEDUCTION OF ELECTRICITY EXPENSES OUT OF THE CONSOLIDATED FIGURE OF RENT AND ELECTRICITY EXPENSES SHOWN BY THE ASSESSEE IN THE PROFIT & LOSS A/C. THE LD. A.R. ALSO FILED COPIES OF THE ASSESSMENT ORDERS OF THE PRECEDING ASSESSMENT YEARS AND ALSO COMPUTATION OF INCOME FILED ALONGWITH THE RETURN FOR THE ASSESSMENT YEAR UNDER CONSIDERATION TO SUBSTANTIATE HIS SUBMISSIONS. 4. THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT DI SPUTE THE ABOVE FACTS SAVE AND EXCEPT RELYING ON THE ORDERS OF THE AUTHORITIES BEL OW. 5. CONSIDERING THE ABOVE FACTS I AM OF THE CONSIDE RED VIEW THAT THE CONTENTION OF THE LD. A.R. HAS MERITS. THE ASSESSING OFFICER WHILE FRAMIN G THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT FOLLOWING THE PAST PRACTICES HAS ACCEPTED THE FACT THAT THE TOTAL RENT SHOWN BY THE ASSESEE COMPRISED OF THE COMPONENTS- (A) RENT AND ( B) REIMBURSEMENT OF ELECTRICITY EXPENSES FROM VARIOUS TENANTS THE BREAK-UP WHICH IS ALSO CO NTAINED AT PAGES 3 TO 5 OF THE IMPUGNED ORDER OF LD. CIT(A.). I AGREE WITH THE LD. A.R. THA T THE RE-ASSESSMENT PROCEEDING HAS BEEN INITIATED MERELY FOR CHANGE OF OPINION. THE DEPARTM ENT HAS NOT DISPUTED THE FACT THAT THE RENT RECEIVED BY THE ASSESSEE INCLUDED THE REIMBURSEMENT OF ELECTRICITY CHARGES RECEIVED FROM VARIOUS TENANTS. THE INCOME FROM HOUSE PROPERTY IS TO BE CONSIDERED ON THE BASIS OF THE RENT RECEIVED BY THE ASSESSEE. WHEN PRIMA FACIE THERE IS NO DISPUTE TO THE FACT THAT THE AMOUNTS RECEIVED BY THE ASSESSEE FROM THE VARIOUS TENANTS I NCLUDED THE RENT AND REIMBURSEMENT OF ELECTRICITY EXPENSES THE SAID ACTUAL REIMBURSEMENT OF EXPENSES HAVE TO BE DEDUCTED FROM THE AMOUNT RECEIVED AND THE BALANCE AMOUNT IS ONLY TO B E CONSIDERED AS RENT RECEIVED BY THE ASSESSEE FOR COMPUTING INCOME FROM HOUSE PROPERTY. SINCE THE ASSESSEE IS FOLLOWING THE SAME PRACTICES AND THE SAME HAD BEEN ACCEPTED BY THE DEP ARTMENT CONTINUOUSLY FOR THE LAST 30 YEARS I HOLD THAT THE RE-ASSESSMENT PROCEEDING INITIATED BY THE ASSESSING OFFICER IS NOT JUSTIFIED AS NO INCOME LIABLE TO TAX HAS ESCAPED ASSESSMENT. THE RE -ASSESSMENT PROCEEDING IS INITIATED ONLY BECAUSE CHANGE OF OPINION WHICH IS NOT PERMISSIBLE . HENCE I HOLD THAT THE RE-ASSESSMENT PROCEEDING HAS NOT BEEN INITIATED AS PER LAW AND AC CORDINGLY THE ASSESSMENT ORDER PASSED ITA NO.104/KOL./2011 4 UNDER SECTION 147/143(3) DATED 03.08.2010 IS QUASHE D. HENCE THE GROUNDS NO. 2 3 & 4 OF THE APPEAL ARE ALLOWED. 6. SINCE I HAVE QUASHED THE RE-ASSESSMENT THERE IS NO NEED TO ADJUDICATE THE GROUNDS NO. 5 & 6. 7. IN THE RESULT THE APPEAL OF THE ASSESEE IS ALLO WED. ORDER PRONOUNCED IN THE OPEN COURT ON 11.03.2011. SD/- [ B.R. MITTAL / . . ] JUDICIAL MEMBER/ DATED : 11/ 03 / 2011 COPY OF THE ORDER FORWARDED TO: 1. M/S. JETHMAL BANTHIA HUF 147 M.G. ROAD KOLKAT A-7. 2 ACIT CENTRAL CIRCLE-XVIII KOLKATA 18 RABINDRA S ARANI KOLKATA-1. 3. CIT(A)- KOLKATA 4. CIT KOLKATA- 5. DR KOLKATA BENCHES KOLKATA (TRUE COPY) BY ORDER ASSISTANT REGISTRAR I.T.A.T. KOLKATA LAHA SR. P.S.