Krishi Utpadan Mandi Samiti, Haldwani vs Department Of Income Tax

Income Tax Officer-2, Vs. M/s Krishi Utpadan Mandi Samiti, Haldwani Haldwani. (PAN:AAAAK4291L) (Appellant) (Respondent)

Appellant by : Sh. Gaurav Dudeja, Sr. DR Respondent by: None

Date of hearing: 27.02.2015 Date of pronouncement: 27.02.2015

ORDER

PER P.K. BANSAL, AM :

1. This appeal has been filed by the Revenue against the order of the learned

CIT(A), dated 30.07.2013 by taking the following effective grounds:

i. That the Ld.CIT(A)-II, Dehradun has erred in law and on fact in allowing depreciation on shops, godowns, roads etc. without appreciating the fact that these assets were allotted to the different person on hire purchase therefore the rental income derived from these assets comes under the preview of section 22 of the IT. Act 1961 i.e. income from house property instead of income from business & profession, for which no depreciation shall be allowed.

ii. That the order of the Ld.CIT(A)-II, Dehradun is against the spirit of legislature and the order of the AO is liable to be restore.

2 ITA No. 5561/Del /2013 iii. That the appellant craves, leave to add, alter, amend above grounds of appeal.

2. None appeared on behalf of the assessee in spite of the notice served on

assessee, as per the acknowledgement available on record. We, therefore,

proceed to decide/dispose of this appeal after hearing the learned DR.

3. After hearing the learned DR, we noted that an appeal for the assessment

year 2003-04 on the similar facts and circumstances has been decided by this

Tribunal vide order dated 11th September, 2009 in ITA No. 2966/Del/2008 in

which this Tribunal has held as under:

"We have considered the submission of the Ld. DR of the revenue and have gone through the orders of the authorities below. We find that no basis is given by the Commissioner of Income-tax (Appeals) in holding that the rental income in the present case is assessable as business income. The reasoning given by the Commissioner of Income-tax (Appeals) that the assessee has not calmed any standard deduction u/s 24 out of rental income is not a basis to hold that the income in question is business income. In this regard, we are of the opinion that the assessee deserves to be allowed deduction allowable to the assessee u/s 24 of the Act against the rental income assessable under the head income from house property, but deduction cannot be allowed on account of depreciation. We hold accordingly and direct the Assessing Officer to allow deduction to the assessee U/S 24 and we set aside the order of the Commissioner of Income-tax (Appeals) regarding his direction to the Assessing Officer in allowing the depreciation.

In the result, the appeal of the revenue stands partly allowed."

4. Respectfully following the aforesaid order of this Tribunal, we set aside

the order of the learned CIT(A) and direct the Assessing Officer to assess the 3 ITA No. 5561/Del /2013

income under the head "income from house property" and allow the deduction

which are allowable under Section 24 of the Income-tax Act, 1961.

5. In the result, the appeal filed by the Revenue is partly allowed.

The decision is pronounced in the open court on 27th February, 2015.

Sd/- Sd/- (Diva Singh) (P.K. Bansal) Judicial Member Accountant Member

Dated: 27th February, 2015. RK/- Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi