Azimaganj estates Pvt Ltd., Kolkata v. DCIT, Circle - 7, Kolkata, Kolkata

ITA 1675/KOL/2008 | 2005-2006
Pronouncement Date: 26-07-2013

Appeal Details

RSA Number 167523514 RSA 2008
Assessee PAN AACCA1084F
Bench Kolkata
Appeal Number ITA 1675/KOL/2008
Duration Of Justice 4 year(s) 10 month(s) 29 day(s)
Appellant Azimaganj estates Pvt Ltd., Kolkata
Respondent DCIT, Circle - 7, Kolkata, Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 26-07-2013
Appeal Filed By Assessee
Bench Allotted B
Tribunal Order Date 26-07-2013
Assessment Year 2005-2006
Appeal Filed On 28-08-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH B KOLKATA BEFORE SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND SHRI MAHAVIR SINGH JUDICIAL MEMBER ITA NO. 1675 / KOL / 2008 ASSESSMENT YEAR :2005-06 AZIMGANJ ESTATES PVT. LTD. AZUNGABH GIYSEM 7 CAMAC STREET KOLKATA 700 069 [ PAN NO.AACCA 1084 F ] V/S . DY. COMMISSIONER OF INCOME-TAX CIRCLE 7 AAYKAR BHAWAN P-7 CHOWRINGHEE SQUARE KOLKATA 700069 / APPELLANT .. / RESPONDENT) /BY APPELLANT SHRI S.K. TULSIYAN AR /BY RESPONDENT SHRI AJOY KR. SINGH CIT-DR /DATE OF HEARING 27-06-2013 /DATE OF PRONOUNCEMENT 26-07-2013 / // / O R D E R PER MAHAVIR SINGH JUDICIAL MEMBER:- THIS APPEAL FILED BY ASSESSEE IS ARISING OUT OF OR DER OF COMMISSIONER OF INCOME-TAX (APPEALS)-VIII KOLKATA IN APPEAL NO. 4/CIT(A)-VIII/08-09/C-7 DATED 24-07-2008. ASSESSMENT WAS FRAMED BY DCIT CI RCLE-7 KOLKATA VIDE HIS ORDER DATED 31-12-2007 FOR ASSESSMENT YEAR (AY) 2005-06. 2. THIS APPEAL WAS HEARD AND ORDER WAS PASSED BY TH IS TRIBUNAL VIDE DATED 07-06-2012 AND ONLY ISSUE LEFT FOR ADJUDICATI ON WAS AS REGARDS TO MUNICIPAL TAX VIDE GROUND NO.4 WHICH READS AS UND ER:- 4. THAT ON FACTS AS WELL AS ON LAW THE LEARNED CI T(A) HAS ERRED IN DIRECTING THE LEARNED ASSESSING OFFICER TO REEXAMIN E THE TAXABILITY OF THE AMOUNT OF DEPOSIT FROM TENANTS TOWARDS MUNICIPAL TA X AND HELD AS LIABILITY ITA NO.1675/KOL/2008 A.Y. 2005-06 AZIMGANJ ESTATES PVT. LTD. V. DCIT CIR-7 KOL PAGE 2 NEAR THE HEAD MUNICIPAL TAX DEPOSIT IN THE BALANCE SHEET INSTEAD OF ADJUDICATING THE MATER IN FAVOUR OF THE APPELLANT. THIS ISSUE WAS RECALLED VIDE MA NO. 86/KOL/2012 DAT ED 07-09-2012 AND FIXED FOR HEARING. FROM THE ABOVE GROUND ONLY ISSU E IS WHETHER MUNICIPAL TAX DEPOSIT RECEIVED BY ASSESSEE FROM ITS TENANTS CONSTITUTED INCOME IN ITS HAND OR NOT. 3. BRIEFLY STATED FACTS ARE THAT ASSESSING OFFICER NOTICED FROM BALANCE- SHEET SCHEDULE-9 THAT ASSESSEE HELD DEPOSIT OF RS .2 13 00 710/- UNDER THE HEAD MUNICIPAL TAX DEPOSIT. ACCORDING TO AO ASSE SSEE DISCLOSED THAT THESE DEPOSITS WERE MADE ON THE BASIS OF AGREEMENT BY FLAT PURCHASERS OR ON THE BASIS OF RENTAL AGREEMENT BY TENANTS. THE AO NOTED THAT THIS MUNICIPAL TAXES/TAXES WERE NOT REFUNDABLE TO TENANT S AND AMOUNT COLLECTED ON ACCOUNT OF MUNICIPAL TAX WAS NOT PAID TO MUNIC IPAL AUTHORITY HENCE HE TREATED THE ENTIRE DEPOSITS UNDER MUNICIPAL TAX D EPOSIT HEAD AMOUNTING TO RS.2 13 00 710/- AS INCOME OF THE ASSESSEE AS TR ADING RECEIPTS. AGGRIEVED ASSESSEE PREFERRED APPEAL BEFORE CIT(A) WHO CONFIRMED THE ACTION OF AO BY OBSERVING IN PARA-7.2 OF HIS ORDER WHICH READS AS UNDER:- 7.2 I HAVE CONSIDERED THE SUBMISSION OF A/R OF THE APPELLANT AND FINDING OF AO. THE AO HAS NOT BROUGHT INTO RECORD WHETHER THE AMOUNT CLAIMED TO BE COLLECTED FROM PARTIES IS DEPOSIT AND REFUNDABLE OR IN CASE OF NOT DEPOSIT OR LESSER AMOUNT OF DEPOSIT TO KC WHETHER THERE IS ANY AGREEMENT WITH PARTIES TO REFUND THE AFORESAID AMOUNT I THEREFORE DIRECT THE AO TO RE-EXAMINE THE ISSUE AND IF THE AMOUNT IS NON-REFUNDABLE TO PARTIE S CHARGE THE SUM COLLECTED AS INCOME OF APPELLANT AND ALLOW THE DEDU CTION OF MUNICIPAL TAX PAID AS PER PROVISION OF SECTION 43B OF I. T. ACT O N PAYMENT BASIS. ACCORDINGLY GROUND NO. 8 IS ALLOWED AS DIRECTED. AGGRIEVED ASSESSEE PREFERRED SECOND APPEAL BEFORE US. 4. WE HAVE HEARD RIVAL CONTENTIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES. WE FIND THAT THE AO NOTICED FROM TH E BALANCE SHEET THAT THE SUM TOWARDS MUNICIPAL TAX COLLECTED FROM TENANT S ARE KEPT IN A SEPARATE ITA NO.1675/KOL/2008 A.Y. 2005-06 AZIMGANJ ESTATES PVT. LTD. V. DCIT CIR-7 KOL PAGE 3 ACCOUNT STYLED AS MUNICIPAL TAX DEPOSIT. THE PAY MENT OF MUNICIPAL TAX IS ROUTED THROUGH THIS ACCOUNT FOR MAKING PAYMENT TO M UNICIPAL CORPORATION. THE AO ADDED THE ENTIRE AMOUNT OF RS.2 13 00 710/- BUT THE ASSESSEE COLLECTED DURING THE YEAR ONLY RS.23 35 094/-. THE BALANCE AMOUNT WAS CARRIED FORWARD FROM EARLIER YEARS. THE ASSESSEE A LSO DEPOSITED THE AMOUNT OF RS.2 92 349/- TO THE MUNICIPAL CORPORATIO N AS TAX AND THE BALANCE REMAINING FIGURE COLLECTED DURING THE YEAR IS RS.20 42 474/-. THE ASSESSEE ALSO FILED COPY OF LEDGER ACCOUNT OF MUNIC IPAL TAX BEFORE US. IT MEANS THAT THE DISPUTE IS QUA ONLY THE FIGURE OF RS .20 42 474/- . THE ASSESSEE PLACED RELIANCE ON THE DECISION OF HONBLE CALCUTTA HIGH COURT IN THE CASE OF CIT VS. GILLANDERS ARBUTHNOT & COMPANY LTD. 142 ITR 598 (CAL) WHEREIN IT IS HELD THAT THE OCCUPIERS SHARE OF MUNICIPAL TAX REALIZED BY AN ASSESSEE FROM ITS TENANTS DOES NOT FORM PART OF THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM Y EAR TO YEAR WITHIN THE MEANING OF SECTION 23(1) OF THE INCOME TAX ACT AND THE SAME CANNOT BE ASSESSED AS THE INCOME OF THE ASSESSEE. HONBLE HI GH HELD AS UNDER: WE ARE THEREFORE OF THE VIEW THAT THE OCCUPIERS' SHARE OF THE MUNICIPAL TAX WHICH A TENANT IS STATUTORILY LIABL E TO PAY TO THE MUNICIPALITY DOES NOT FORM PART OF THE ANNUAL VAL UE AS DETERMINED UNDER THE MAIN PARAGRAPH OF S. 23(1) AND IT DOES NO T ACQUIRE REVENUE CHARACTER MERELY BECAUSE THE OWNER HAS NOT UNDERTAKEN TO BEAR THE SAME AND IT IS THEREFORE NOT LIABLE T O BE DEDUCTED UNDER THE PROVISO BELOW THE MAIN PARAGRAPH. THE PO SITION OF THE ASSESSEE VIS-A-VIS THE OCCUPIERS' SHARE OF TAX COLL ECTED BY HIM IS THAT OF AN AGENT OR TRUSTEE. TO THE EXTENT THE ASSE SSEE HAS NOT PAID THAT AMOUNT TO THE MUNICIPALITY IT MAY HAVE TO REF UND THE SAME TO THE TENANTS FROM WHOM IT WAS COLLECTED. BUT WHEN TH AT AMOUNT DOES NOT HAVE THE CHARACTER OF INCOME IN THE HANDS OF THE ASSESSEE IT DOES NOT ACQUIRE SUCH CHARACTER MEREL Y BECAUSE IT HAS NOT BEEN REFUNDED TO THE RESPECTIVE TENANTS FR OM WHOM IT WAS COLLECTED. IN THIS VIEW OF THE MATTER IT IS IMMAT ERIAL WHETHER THE WHOLE OF THIS SUM OF RS. 42 683 OR ANY PART THEREO F REPRESENTS EXCESS COLLECTION OF OCCUPIERS' SHARE OF TAX. IN AN Y VIEW OF THE MATTER IT IS NOT LIABLE TO BE TREATED AS A RECEIPT OF REVENUE CHARACTER. WE THEREFORE ALLOW THE ASSESSEE'S CLAI M AND DIRECT THE EXCLUSION OF THIS SUM OF RS. 42 683 FROM THE ASSESS EE'S TOTAL RECEIPTS.' ITA NO.1675/KOL/2008 A.Y. 2005-06 AZIMGANJ ESTATES PVT. LTD. V. DCIT CIR-7 KOL PAGE 4 AS THE ISSUE IS SQUARELY COVERED IN FAVOUR OF ASSES SEE BY THE DECISION OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF GI LLANDERS ARBUTHNOT & COMPANY LTD WE ALLOW THE CLAIM OF ASSESSEE. THIS I SSUE OF ASSESSEES APPEAL IS ALLOWED. 5. IN THE RESULT APPEAL OF ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED IN OPEN COURT ON 26.07.2013 SD/- SD/- (PRAMOD KUMAR) (MAHAVIR SI NGH) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA *DKP !' #- /07/2013 * ++ ++ ++ ++ - - - - / COPY OF ORDER FORWARDED TO:- 1. / APPELLANT 2. / RESPONDENT 3. '/'+0 1 / CONCERNED CIT 4. 1- / CIT (A) 5. 45 +++0 +0 / DR ITAT KOLKATA 6. 589 :; / GUARD FILE. BY ORDER/ +0 *