Case Law Details
Dinesh Kumar Singal Vs ITO (ITAT Chandigarh)
The ITAT, Chandigarh in the case of Shri Dinesh Kumar Singhal v. The ITO [ITA NO. 683/Chd/ 2022 dated May 22, 2023] held that income of the assessee which is already taxed in one head cannot be taxed under any other head by the Revenue Department.
Facts:
Shri Dinesh Kumar Singhal (“the Appellant”) filed return of income for the Assessment year 2017-18 inter alia disclosed INR 3,00,000/- under the head Income from House Property and claimed statutory deduction of 30% and net amount of INR 2,10,000/- showed as income under the head Income from House Property.
The Central Processing Centre, Bangalore (“CPC”) against the return filed by the Appellant made a prima facie addition of INR 3,00,000 as Income from Other Sources which was already offered to tax by the Appellant under the head of Income from House Property. The Appellant filed a rectification application before the CPC which was dismissed by CPC vide an Order (“the Order”).
Aggrieved by the dismissal of application the Appellant moved in appeal before the Commissioner of Income Tax (Appeal), Delhi (“CITA”) who vide an Order dated September 09, 2021 (“the Impugned Order”) confirmed the Order of the CPC. Aggrieved thereby the Appellant filed an appeal before the ITAT.
The Appellant contended that the income amounting INR 3,00,000 from House Property was properly disclosed and after claiming of statutory deduction of 30% the net amount of INR 2,10,000 was showed as income under the head Income from House Property which was accepted by the CPC but at the same time addition of INR 3,00,000 related to the same rental income was made by the CPC under the head Income from Other Sources.
Issue
Whether the addition of INR 3,00,000 by the CPC under the head of Income from Other Sources is sustainable?
Held
The ITAT in ITA NO. 683/Chd/ 2022 dated May 22, 2023 held as under:
- Observed that, the Appellant has rightly shown income of INR 2,10,000 in his Return of Income under the head ‘Income from House Property’ on annual lettable value of INR 3,00,000 after claiming a statutory deduction of 30%.
- Noted that, addition by the CPC was a clear mistake on record where the CPC at the time of processing the return acknowledged the rental income under head of ‘Income from House Property’ but at the same time taxed such rental income once again under the head ‘Income from Other Sources’ which has resulted in double taxation of the income.
- Directed to delete the addition of INR 3,00,000 by CPC confirmed by the CITA.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
This is an appeal filed by the Assessee against the order of the Ld. CIT(A), NFAC, Delhi dt. 09/09/2021 pertaining to A.Y. 2017-18 wherein the assessee has taken the following grounds of appeal:
1. “That order passed u/s 250(6) of the Income Tax Act, 1961 by the Learned Commissioner of Income Tax (Appeals), NFAC, Delhi is against law and facts on the file in as much as NFAC was not justified to uphold the addition of Rs. 3,00,000/- as rental income by way of prima facie adjustment u/s 143(1).
2. That NFAC was not justified to hold that the mistake is not apparent from record and thus, is not rectifiable u/s 154.”
2. At the outset, it is noted that there is a delay in filing the present appeal as pointed out by the Registry. During the course of hearing, both the parties were heard and affidavit so filed by the assessee seeking condonation of delay was perused and taking into consideration the facts and circumstances of the present case, we find that there was reasonable cause in late filing of the present appeal. Hence, the delay is condoned and the appeal is admitted for adjudication.
3. During the course of hearing, the Ld. AR submitted that the limited issue in the present appeal relates to the addition of Rs. 3,00,000/- under the head “income from other sources” by CPC, Bangalore while processing the return of income which is already offered to tax by the assessee under the head “income from house property”. It was accordingly submitted that it has resulted in double taxation of the same income which cannot be sustained in the eyes of law.
3.1 In this regard, the Ld. AR taken us through the return of income filed by the assessee wherein the assessee has disclosed income from house property amounting to Rs. 3,00,000/- and after claiming statutory deduction @ 30%, the net amount of Rs. 2,10,000/- has been offered under the head “income from house property”. It was submitted that the CPC, Bangalore while processing the return of income has accepted the assessee’s income as so declared under the head “income from house property” and at the same time, carried out an adjustment by way of an addition of Rs. 3,00,000/- under the head “income from other sources”.
3.2 It was submitted that the said adjustment has been done by CPC, Bangalore basis Form No. 26AS holding that there is a inconsistency between the income under the head “Income from other sources” as declared by the assessee in the return of income and has reflected in Form No. 26AS. In this regard, our reference was drawn to the Form No. 26AS wherein the assessee has received rental receipt of Rs. 3,00,000/- from M/s R. D. Associates on which tax under section 194IB has been deducted @ 10%. It was submitted that the said rental income was disclosed by the assessee under the head “income from house property” while filing the return of income and therefore there is no basis for making the addition of the same income again under the head “Income from other sources”.
3.3 It was submitted that on receipt of the intimation under section 143(1) dt. 15/04/2019, the assessee moved a rectification application before the CPC, Bangaluru which was again dismissed. It was submitted that the assessee left with no option moved in appeal before the Ld. CIT(A) which has again not given the requisite relief to the assessee and hence the present appeal has been filed by the assessee before the Tribunal seeking necessary relief from double taxation.
3.4 It was submitted that in light of the undisputed fact that the rental income has already been offered to tax under the head “income from house property”, there is no basis for making the addition of same income under the head “income from other sources” and it was accordingly submitted that necessary relief may be provided to the assessee by deleting the addition so made by the CPC, Bangaluru and confirmed by the Ld. CIT(A), NFAC, Delhi.
4. Per contra, the Ld. DR relied on the order of the lower authorities.
5. We have heard the rival contentions and perused the material available on the record. On perusal of the return of income filed by the assessee, we find that the assessee has shown income of Rs. 2,10,000/- under the head “income from house property” wherein the annual lettable value has been shown at Rs. 3,00,000/- and statutory deduction @ 30% has been claimed. We further note that the adjustment which has been made by CPC, Bengaluru relates to the rental income of Rs 3,00,000/- from M/s R. D. Associates as reflected in Form No. 26AS which has form the basis of the adjustment done by CPC, Bangaluru wherein the same has been brought to tax under the head “income from other sources”. We therefore find that there is clearly a mistake apparent from record while processing the return of income wherein the CPC, Bengaluru has acknowledged the rental income under the head “income from house property” as so declared by the assessee at Rs. 3,00,000/- in his return of income, and at the same time, has brought to tax again under the head “income from other sources” resulting in double taxation of same income. In view of the same, the addition of Rs. 3,00,000/- so made by the CPC, Bengaluru and confirmed by the Ld. CIT(A), NFAC, Delhi is hereby directed to be deleted.
6. In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 22/05/2023
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