Income Tax Appellate Tribunal - Mumbai
Pegasus Properties P. Ltd., Pune vs Dy Cit -Cc-2(3), Mumbai on 4 April, 2022
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH "C" MUMBAI BEFORE SHRI KULDIP SINGH (HUDICIAL MEMBER) AND SHREOM PRAKASH KANT (ACCOUNTANT MEMBER} ITA No. 743 /MUM/2021 Assessment Year: 2015-16 Pegasus Properties Private Deputy Commissioner of Income Linnted, Ys, Tax Central Cirele-2(3}, 2413 18 Moor, Kumar Capital, Bast 8 floor, Old CGO Annexe Building, Street, Canm, MLK. Road, Marine Lines, Pune-421 001, Mumbai-400020. PAN Na. AAECP 1420 E Appellant Respondent Assessee by > Mr Nikhil Tiwari, AR Revenue by : Mr, CT. Mathews, DR Date of Hearing : O4/04/2022 Date of pronouncement +: 04/04/2022 ORDER PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 16.03.2021 passed by the Ld. Commissioner of Income Tax (Appeals}-48, Mumbai fin short 'the Ld. CIT(A}"] for assessment year 2015-16 raising following grounds :
"General :
Pegasus Properties Pyt. Ltd | ¢ ; ITA No. 743 /M 2021 | i. On the facts and in the circumstances of the case and in law, the learned CIT(A} has erred in upholding the action of the learned AO to the extent of additions made of Rs1,66,26,64&8to the total incame af the Appellant; Addition an account of deemed rental incamte of Rs 92.09.1653 on t the App. stack unsold flat:
On the facts and in the circumstances of the case and in law, the learned bag CIT{A) has erred in upholding the actioa of the learned AQ in making notional addition to the incame of the Appellant under the head Income from House Praperty (EHP) of $92,093,165 under sectian 23(4)} of the Act, on account of deemed rental Income on uasold flats held as stock in trade; on Gn the focts-and in the circumstances of the case and in law, the learned CHP{A} has erred in upholding that, deemed rental incame would be chargeable to tax as [FHP {irrespective of the nature of business of the Appellant), on the basis of ownership, even if no rental income is earned SS on the sante;
4. On the facts and in the circumstances of the case and in law, the learned CITfA} has failed to appreciate that, the unsold flats which are held as inventory in the business of construction, would amount to flats occupied for the purpose of Appellant's business and therefore by virtue of exemption given in section 22 of the Act, annual value of such flats cannat be brought to tay under the head IFHP:
& On the facts and jn the circumstances of the case and in law, the learned CHA] has erred in not appreciating that, income ifany, on account af sale of stock in trade or exploitation of stack in trade would always resemble te and chargeable te tax under the head inceme from Business and Profession (IPB), and thereby notional income cannot be charged on the same, as there is no concept of notional incame in PRP:
6. On the facts and in the circumstances of the case and in law, the learned CIT{A} has erred in upholding the action of the learned A in bringing SERRE HOSE On nnn EE EEC ER SERENE Pagasta Properties Pvt. Ltd. | 3 ITA No. P43 / (2021 notional rent on stock-in-trade under [FHP, withaut being here any corresponding sectian and legisiative intention to tax the same as incante from such sources during the year xader appeal, Un the facts and in the circumstances of the case and in law, the learned ™i CITEA) bas erred in upholding the action af the fearned AQ af nat taking the assessable value fie, ratenhle value} as per Municipal Authority for the purpese of computing deemed national rent as per section 23 of the Act;
& Gh the facts and in the circumstances af the case and in tow, the learned CIT{A} has erred in not following the decision of Hon'ble Tribunal in assessee's awn case against the 143(9} proceedings for AY 2013-14 and AY 2014-15 and iacarrectly relying on the decision of Hon'ble Bombay High Court in case of Mangla Homes P Ltd (325 17R 2RE) swetthaut appreciating the fact thatin the case ef said assesses, it was in the bussiness af letting out of house property and therefore income earned was taxed as IFHP, whereas the assessee is in the business af builders anil developers of residential property and income earned is taxable as IFRP; Without prejudice t ve, erred in upholding the actran of the ser learned AG of considering the fair market rent at 712 per square feet as deemed rent from such house property without bringing any cogent material on record;
10. Without prejudice to the abave. erred in upholding the action of the learned AQ af not granting vacancy allowance with respect to the unsold stock in trade, as the entire stack in trade were vacant during the year under appeal ti. Without prejudice to the above, erred in net appreciating that, the entire stock in trade was natin habitable condition, and hence, the very existence of property which could ke given on rent is not present, and therefore, ne addition on account of deemed rental incamie should be made;
12. Witheut prefdice to the abave, erred in making setional addition af rental income for ane muinth without appreciating the face that Fepasus Properties Pvt. Lid. | 4 completion certificate was abtained in between the month and the fat cannot be fet out for the part of the month of its immediate completion. :
'eligible danations of €62,00,000 made from the SK expenses
13. On the facts and in the circumstances of the case and in law, the learned CIT{A} has erred in not allawing deduction under section 806 afthe act on eligible donations made out of the CSR expenses debited te the Profitand Loss acceaat.
amounting to $3, 71,368
74. Gn the facts and in the circumstances of the case and indaw, the learned CIT{A} has erred in upholding the action of learned AC of disallowing 2% of the total advertisement and sales promotion expenses debited Profit and Lass account which comes to F9 71,389 Rolding that, the same has nat been fully substantiated through supporting:
1S. On the facts and in the circumstances of the case and in law, the learned CIT(A)} hus erred in upholding the action of learned AQ of making Ad-hoc disallowance withaut appreciating that books ofaccounts are audited and accepted without any variation and hence, adjustment is not sustaina ble in the eves of law, Addition of R2.46,115 und 16, Gin the facts and in the circumstances of the case and in law, the learned CHT{A} has erred in law in upholding the action of the learned AOD in = = g 3 g g g g g g 2 5 g g g 8 g g g g g g g g g g g g 8 g g g g g 2 g g = = disallowing a sum of 72.46,215 on account of alleged unexplained expenditure fie. difference in cash as per books vis-a-vis physical cash} ufs. 690 of the Act.
SDEDEDDEDEDD REEDS! Pegasus Properties Pvt. Leds} > iTA Na. 743 /M 7202 1 chaf the Act initiation of penalty under se
17. On the fects and in the circumstaaces of the case and in knw, the learned CITA) has erred in upholding the initiation of penalty proceedings on the above u/s 272 {T} {ep Any consequential relief fa which the Appeikint may be entitled under the law in pursuance of the aforesaid grounds of appeal, or otherwise, may thus be granted "
Deeg At the outset, the Ld. counsel of the assessee submitted that assessee had e-filed its appeal on 07.05.2021 which was instituted and registered as [TA No. 743 /M/2021 by the [TAT. The assessee had also filed a physical copy of the said appeal on 27.05.2021, which was also instituted and registered as ITA No. 943/M/2021. (i.e. another number)
3. Before us, the Ld. counsel of the assessee has submitted that appeal against the physical copy Le. ITA No. 943/M/2021 has been heard by the Bench on 23.02.2022 and order is awaited and therefore, he sought to treat this appeal as infructuous. The action of the Registry of instituting twa appeals against the same impugned order is not correct. 3,1 In view of the submission of the Ld. counsel of the assessee that appeal fled physically has already been heard by the Tribunal, therefore, the appeal fed electronically is being treated as Infructuous and accordingly dismissed. eres SS a ARANDA SAAD AAA AD ASAD SAAN aA AA AACA GAA Aaa acca Pegasus Properties Pvt. Ltd. | ® Ta No. P43 /MAgi I 4, Inthe result, this appeal is dismissed as infructuous. Order pronounced in the open Court on 04/04/2022. Sd/-
(KULDIP SINGH) JUDICIAL MEMBER Munibai:
Dated: 04/04/2022 Rahul Sharma, $r. BS.
Copy of the Order forwarded fo:
1. The Appellant 2 The Respondent.
3. The CIP{A}-
4, CVT DR, ITAT, Mumbai 6 Guard fle.
//True Capy// Sd /-
(OM PRAKASH KANT) ACCOUNTANT MEMBER BY ORDER, (Sr. Private Secretary} ITAT, Mumbai