Income Tax Appellate Tribunal - Jaipur
Sunita Khinchi, Jaipur vs Ito, Jaipur on 20 April, 2017
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IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES (SMC), JAIPUR
Jh Hkkxpan] ys[kk lnL;] ds le{k
BEFORE: SHRI BHAGCHAND, ACCOUNTANT MEMBER
vk;dj vihy la-@ITA No. 620/JP/2015
fu/kZkj.k o"kZ@Assessment Year : 2009-10
Sunita Khinchi, cuke Income Tax Officer,
P-51, Raj Anagan, NRI Colony, Vs. Ward 6(1),
Pratap Nagar, Sanganer, Jaipur. Jaipur.
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: ALQPK 3638 K
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@ Assessee by : Shri Manish Agarwal (CA).
jktLo dh vksj ls@ Revenue by : Smt. Poonam Rai, (DCIT).
lquokbZ dh rkjh[k@ Date of Hearing : 20/04/2017
mn?kks"k.kk dh rkjh[k@ Date of Pronouncement : 20/04/2017
vkns'k@ ORDER
PER: BHAGCHAND, A.M. This is an appeal filed by the assessee against the order dated 27/04/2015 passed by the ld CIT(A)-2, Jaipur for the A.Y. 2009-10.
2. The assessee is an individual, engaged in the business of petroleum products and Kota stone job work through it concerns S.R. Petroleum and S.R. Marbles. The return of income was filed on 30/09/2009 declaring total income of Rs. 1,91,178/-. The assessment was made U/s 144 of the Income Tax Act, 1961 (in short the Act) at an income of Rs.
2 ITA 620/JP/2015_ Sunita Khinchi Vs. ITO 15,18,740/-. The Assessing Officer made various additions against the income of the assessee.
3. Against the order of the Assessing Officer, the assessee preferred an appeal before the ld. CIT(A), who after considering the submissions had allowed the appeal partly.
4. Now the assessee is in appeal before the ITAT by taking following grounds of appeal:
1. On the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in passing the order U/s 144 of the Income Tax Act, 1961,hence the order so passed deserves to be quashed.
2. On the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in disallowing the interest on housing loan claimed under the head "Income from House Property" amounting to Rs. 2,62,552/- arbitrarily without considering the genuineness of the claim.
Hence, the disallowance of Rs. 2,62,552/- so made deserves to be deleted.
3. On the facts and in the circumstances of the case, the ld. CIT(A) has grossly erred in applying the N.P. rate of 0.52% in M/s S.R. Petroleum arbitrarily on estimation basis resulting into addition of Rs. 4,306/- arbitrarily, thus the addition so made deserves to be deleted.
4. On the facts and in the circumstances of the case the Assessing Officer has grossly erred in applying the NP rate of 18.34% in M/s S.R. Marbles arbitrarily on estimation basis resulting into the trading addition of 3 ITA 620/JP/2015_ Sunita Khinchi Vs. ITO Rs. 1,66,438/- arbitrarily thus the addition so made deserves to be deleted.
5. That the appellant craves the right to add, delete, amend or abandon any of the grounds of appeal either before or at the time of hearing of appeal."
5. Ground No. 1 of appeal was not pressed by the ld. AR of the assessee at the time of hearing, therefore, the same is hereby dismissed as not pressed.
6. Ground No. 5 of the appeal is general in nature, requires no adjudication. Hence, the same is dismissed.
7. In ground No. 2, the issue involved is against sustaining the disallowance of interest on housing loan claimed under the head "Income from House Property" at Rs. 2,62,552/-. The assessee has claimed interest on housing loan of Rs. 2,62,552/- while the ld. CIT(A) allowed the deduction only up to Rs. 1.50 lacs U/s 24(b) of the Act treating the property as self occupied. The relevant para of the ld. CIT(A)'s order is as under:-
"3. I have perused the facts of the case, the assessment order, the submissions of the appellant and the remand report. The Assessing Officer has enumerated the numerous opportunities which were given to the assessee during the course of assessment proceedings, to which there was no compliance. The reply of the appellant that this non compliance was 4 ITA 620/JP/2015_ Sunita Khinchi Vs. ITO due to the fault of the earlier authorized representative, does not make the passing of the assessment order u/s. 144, bad in law. Therefore, it is held that sufficient opportunities were given to the assessee and hence the passing of the order u/s. 144 is upheld. Ground No. 1 is dismissed.
4. The appellant has stated that by the time she realized that the earlier authorized representative was not attending to the assessment proceedings and she appointed a new authorized representative, order u/s. 144 had already been passed. The additional evidences, requested for admission, are copy of the interest and repayment of the housing loan certificate, ledger accounts of expenses and copy of rent deed. These evidences are relevant to the grounds of appeal. Also, it appears that the appellant was prevented by sufficient cause from producing these evidences before the Assessing Officer. Therefore, the additional evidences are admitted under Rule 46A(1)(c).
5. Now Ground No. 2 shall be dealt with. The Assessing Officer has verified, during remand proceedings, the housing loan certificate of Citi Financial Consumer Finance Ltd., submitted by the appellant showing that interest payment of Rs. 4,12,552/- has been made for housing loan. The Assessing Officer has also conducted inquiries, during remand proceedings, which show that the house property in question, was wholly self occupied and not partially let out. The appellant has not been able to dispute this finding of the Assessing Officer, by giving necessary details or evidence. Therefore, it is held that this house property was entirely self occupied and not partially let out. Therefore, the rental income of Rs. 60,000/- shown by the assessee is to be assessed under the head- Income from Other Sources. The appellant is allowed a deduction of only Rs. 1,50,000/- on account of interest u/s. 24(b) on self occupied property. The balance 5 ITA 620/JP/2015_ Sunita Khinchi Vs. ITO disallowance of interest of Rs 2,62,552/- is upheld. Ground No. 2 is partly allowed."
8. Now the assessee is in appeal before the ITAT. The ld AR of the assessee has reiterated the arguments as made before the ld. CIT(A). At the outset, the ld DR has supported the order of the lower authorities.
9. I have heard both the sides on this issue. The assessee claims that the property was let out during the relevant period, however, the investigation made by the Assessing Officer establishes that during the relevant period, the property was not let out and it was self occupied. The assessee has not given any evidence regarding the details of the tenant and the person, who was the tenant. During the assessment proceedings in assessment year 2011-12, enquiries were conducted through the Ward Inspector and he has reported that from the enquiry from the neighbourhood i.e. from house No. P-52, NRI Colony, Raj Aangan, Jagatpura, it was found that the assessee and her husband are staying in the house and there was no tenant in the house since last five years. In absence of any positive evidence regarding the tenancy except the bald claim of the assessee, which was not supported by any documentary evidence, the assessee's claim for interest on housing loan is unjustified.
6 ITA 620/JP/2015_ Sunita Khinchi Vs. ITO Therefore, I sustain the order of the ld. CIT(A) on this issue. Accordingly, this ground of the assessee is dismissed.
10. Ground No. 3 of the appeal is against sustaining the addition on the basis of NP rate adopted @ 0.52% in M/s S.R. Petroleum. At the outset of hearing, the ld AR of the assessee has submitted that this issue is covered by the decision of the Hon'ble ITAT in assessee's own case for the assessment year 2008-09 in ITA No. 237/JP/2014 order dated 03/11/2015. On the contrary, the ld. DR has vehemently supported the orders of the authorities below.
11. I have heard both the sides on this issue. The ITAT, Jaipur Bench while deciding ITA No. 273/JP/2014 for the assessment year 2008-09 has held as under:-
"I have heard the rival submissions of both the parties and perused the material available on the record. I noted that the rejection of books of account has not been disputed by the assessee. The only course, therefore, remains with the Assessing Officer is the estimation of the profit. In this case, I noted that the ld CIT(A) applied the N.P. rate @ .52% while the assessee has declared .32% in M/s S.R. Petroleum. I find substance in the submission of the ld AR that since the sales has increased during the year, therefore with increase of sale, the net profit is going to fall. But in absence of any 7 ITA 620/JP/2015_ Sunita Khinchi Vs. ITO comparative instance on behalf of the assessee I direct the Assessing Officer to estimate the income of M/s S.R. Petroleum by applying the N.P. rate of .42%. This, in my opinion, will meet the ends of justice. This ground of appeal is partly allowed."
Respectfully following the order of the Coordinate Bench on the same issue, I direct the Assessing Officer to estimate the income by applying the NP rate @ .42% in the case of S.R. Petroleum. Accordingly, this ground of appeal is partly allowed.
12. In the ground No. 4 of the appeal, the issue involved is against sustain the addition by applying NP rate @ 18.34% in the case of S.R. Marbles. At the outset of hearing, the ld AR of the assessee has submitted that this issue is covered by the decision of the Hon'ble ITAT in assessee's own case for the assessment year 2008-09 in ITA No. 237/JP/2014 order dated 03/11/2015. On the contrary, the ld. DR has vehemently supported the orders of the authorities below.
13. I have heard both the sides on this issue. The ITAT, Jaipur Bench while deciding ITA No. 273/JP/2014 for the assessment year 2008-09 has held as under:-
"After hearing the rival submissions of both the parties and perused the material available on the record, I noted that the 8 ITA 620/JP/2015_ Sunita Khinchi Vs. ITO assessee did not dispute the rejection of the books of account, therefore, the only question remains estimation of the net profit. The Assessing Officer applied net profit rate @ 18.34% on the basis of the results for the preceding assessment year. This is also a fact during the impugned assessment year the turnover of the assessee has increased by 2.5 times and due to the increase in the turnover, the net profit is bound to fall as the assessee has to make extra sell at a lesser profit. I, therefore, in the interest of justice and fair play to both the parties direct the Assessing Officer to estimate the N.P. rate @ 16.52%. This, in my opinion, will meet the ends of justice. Accordingly, this ground of appeal is partly allowed."
Respectfully following the order of the Coordinate Bench on the same issue, I direct the Assessing Officer to estimate the income by applying the NP rate @ 16.52% in the case of S.R. Marbles. Accordingly, this ground of appeal is partly allowed.
14. In the result, the appeal of the assessee is partly allowed.
Order pronounced in the open court on 20/04/2017.
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¼Hkkxpan½ (BHAGCHAND) ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 20th April, 2017 *Ranjan 9 ITA 620/JP/2015_ Sunita Khinchi Vs. ITO vkns'k dh izfrfyfi vxzsf'kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Smt. Sunita Khinchi, Jaipur.
2. izR;FkhZ@ The Respondent- The ITO, Ward 6(1), Jaipur..
3. vk;dj vk;qDr@ CIT
4. vk;dj vk;qDr@ CIT(A)
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 620/JP/2015) vkns'kkuqlkj@ By order, lgk;d iathdkj@Asst. Registrar