9911796707
TMI Blog2023 (10) TMI 971X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee herein belongs to D' Decor Group. It is engaged in the business of manufacture and sale of textile products. The original return of income filed by the assessee declaring loss of Rs. 72,200/- was processed u/s 143(1) of the Act. Subsequently, the assessee's group was subjected to search on 6.3.2018 and consequent thereto the Assessing Officer initiated assessment proceedings under section 153A of the Act in the hands of the assessee. The assessee efiled its return of income in response to the notice issued under section 153A of the Act by declaring the very same income, i.e., net loss of Rs. 72,200/-. 3. During the course of scrutiny proceedings, the Assessing Officer noticed that the assessee has offered rental income of Rs. 29,60, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standard deduction of 30% claimed by the assessee towards repairs u/s 24(a) of the Act. Accordingly, the total income came to be determined at Rs. 11,15,800/-. It is also pertinent to note that the assessee accepted the assessment order and did not file appeal before the learned CIT(A). 5. Subsequently, the Assessing Officer initiated penalty proceedings under section 270A of the Act for "under reporting" of the income. Before the Assessing Officer, the assessee submitted that it did not under report any income and addition made by the AO pertained to the statutory deduction allowable under section 24(a) of the Act while computing income under the head 'income from house property'. The Assessing Officer did not accept the explanations of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... duction is automatically computed by the software once rental income is shown under the head 'income from house property'. He further submitted that, subsequently when the Assessing Officer questioned about change in the head of income, the assessee agreed for assessing the rental income under the head 'income from business', against which the statutory deduction claimed under section 24(a) will not be available. Accordingly, the Learned AR submitted that the assessee did not under report any income and ultimately, the addition made by the Assessing Officer is related to statutory deduction prescribed in section 24(a) only. Accordingly, he contended that mere change in head of income will not result in under reporting of income. 7. Invitin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion to the total income, which was related to the Statutory deduction, is covered by the above said bonafide explanation of the assessee. Accordingly, the learned AR pleaded that the penalty levied under section 270A of the Act may kindly be deleted. In support of his contention, learned AR placed reliance on the decision dated 31.5.2023 passed by the Chennai Bench of the Tribunal in the case of S. Saroja Vs. DCIT (ITA No. 418/Chny/2023). In the above said case the assessee had declared annual value of the property at Rs. 5,40,000/- instead of Rs. 8,40,000/-. It was noticed that the above said mistake has occurred on account of mistake committed by the accountant and the Tribunal held that such kind of mistake cannot be considered as under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... discussed earlier, it can be noticed that the addition came to be made on account of change in the head of income for assessing the rental income. We noticed that the assessee had offered rental income under the head "Income from House Property", but the assessing officer has assessed the same under the head "Income from business." The standard deduction @ 30% allowable u/s 24(a) while computing income under the head Income from house property will not be available when it is assessed under the Income from business. Thus, it is not a case that the assessee has suppressed or under reported any income. The addition came to be made to the total income returned by the assessee, due to change in the head of income, i.e., the addition has arisen ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
