2016 (2) TMI 130

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..... PER : HONOURABLE MR.JUSTICE AKIL KURESHI) 1. Petitioner has challenged notice dated 30.03.2015 as at Annexure-A to thea petition under which the respondent-Assessing Officer desires to reopen the assessment of the petitioner for the Assessment Year 2010-11. Such assessment order was originally framed after scrutiny. To issue such notice for reopening of assessment, the Assessing Officer had reco .....

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..... ax of Rs. 8,23,397/- under the head administrative & other expenses as per Schedule-IT. In view of the above, the assessee should have offered Rs. 44,23,397/- (Rs.36,00,000/- + Rs. 8,23,397/-) as the total lease rent income and thereafter should have claimed Rs. 8,23,397/- as service tax as expense. Failure to do so has resulted in underassessment of income to the extent of Rs. 8,23,397/-. Hence, .....

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..... II. That there is no escapement of income from tax. A sum of Rs. 8.23 lacs represented service tax on the lease rent. As per the CBDT circular No.4/2008 dated 28.04.2008, the service tax paid by the tenant would not partake the nature of income of the landlord since the landlord only acts as collecting agency for the Government for collection of service tax. In the context of requirement to ded .....

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..... by virtue of addition of Rs. 8.23 lacs, loss would be reduced. 5. We would focus only on the question of income of the assessee chargeable to tax having escaped assessment. In this context, we may recall that the reason recorded by the Assessing Officer for issuing the impugned notice states that the assessee had leased out a property for monthly rent of Rs. 3 lacs, which was exclusive of the se .....

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..... y as per the CBDT circular noted above, even as per the Assessing Officer himself, as indicated in the reasons recorded, was not chargeable to tax. That being the position, mere accounting entry or even if there was some defect in indicating such amount in the accounts presented by the assessee, as long as income chargeable to tax had not escaped assessment, reopening of the assessment would not b .....

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