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06-03-2019, Hardoi Baba Roller, Section 24, HIGH COURT OF ALLAHABAD

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1 month 4 weeks ago #8810 by amit
Section - 24
Order Date - 06-03-2019
Favouring - Assessee
Appellant - Hardoi Baba Roller Flour Mills Pvt. Ltd.
Respondent - CIT
Justice - Bharati Sapru,J. & Piyush Agrawal,J.
Citation - 319Taxpundit355
Appeal No. - INCOME TAX APPEAL No. - 72 of 2017
Asstt. Year - 2012-13


PER : Piyush Agrawal, J

Supplementary affidavit, filed today,is taken onrecord.

Learned counsel for the assessee gives up his rightto file a reply.

The present appeal has been preferred against the order dated 20.07.2016 passed by the Income Tax Appellate Tribunal, Lucknow Bench, Lucknow (hereinafter referred to as, 'the Tribunal') in Income Tax Appeal No. 350/L/2016. The present appeal was admitted by this Court on 04.01.2018 on the following question of law:

“(I) Whether, on a true and correct interpretation of law, the treatment of receipts from rent, derived from surplus space being let-out has rightly been classified by the Ld. ITAT as “Business Income” as against the appellant's claim of it being is taxable under the head “Income from House Property”?

(II) Whether, the impugned order of the ITAT is in accordance with law as the ITAT has recorded its findings ignoring a very specific argument made the assessee resulting in recording of perverse findings and has drawn inoculate conclusions.?”

The facts of the case are that the assessee filed its returns of income on 29.09.2012 showing a total income of Rs. 10,79,200/- for the Assessment Year 2012-13. On 15.01.2013, the assessee filed its revised returns to correct the depreciation claim on the same income. The case of the assessee was selected for scrutiny and notice under section 143(2) of the Income Tax Act, 1961 was issued on 06.08.2013, which was served upon it on 07.08.2013. Thereafter, by an order dated 09.09.2013, the case was transferred to Joint Commissioner of Income Tax, Range – Sitapur. Thereafter, on 23.10.2013 notice under section 143(2)
of the Income Tax Act was issued and on 03.01.2014, notice under section 142(1) of the Income Tax Act was issued to the assessee. On 19.12.2014, the
questionnaire was also issued and the same was duly served upon the assessee in accordance with law.

The assessee submitted its reply and produced books of account for verification. On examination of the books of accounts, certain discrepancies were noticed. The assessee declared the income from house property amounting to Rs. 12,50,000/- and claimed deduction under section 24 of the Income Tax Act for a sum of Rs. 3,75,000/-. It was noticed that the assessee has claimed double deductions; first as depreciation on building and thereafter, deduction under section 24 of the Income Tax Act.

The Assessing Authority, while framing the assessment order dated 23.01.2015 has disallowed double deductions made by the assessee as the assessee has let out its space which forms business income and deduction under section 24 of the Income Tax Act was not permissible. The Assessing Authority has
disallowed the deduction of Rs. 3,75,000/- and disallowed a further sum of Rs. 20,736/- as claimed as travelling & conveyance expenses and Rs. 50,000/- as freight and cartage and added back to the total income of the assessee.

Feeling aggrieved by the aforesaid order, the appellant - assessee filed an appeal and the same was dismissed by the Commissioner of Income Tax (Appeals) vide order dated 16.03.2016. Still feeling aggrieved, the appellant – assessee filed an appeal before the Tribunal, who, by the impugned order, has partly allowed the appeal of the assessee, but has confirmed the disallowance under section 24 of the Income Tax Act, i.e., addition of Rs. 3,75,000/-.

The assessee was directed to bring on record its article of association as well as copy of the income tax

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