No Omission If the Income is taxed under different head: ITAT

M/s. Kalebudde Logistics Vs. Deputy Commissioner of Income Tax Central Processing Unit, Bengaluru

(Dictated and pronounced in the open Court on 31st May, 2022)

The assessee is a partnership firm engaged in the business of warehousing, logistics, and undertaking clearing and forwarding operations. The assessee declared its income under the head “Income from business” with a gross turnover of Rs.1,07,75,739 and declared income at 9% u/s 44AD of the Act. The payers of the rental income and commission income had deducted tax at source from the payments made by them. While processing the return of income u/s 143(1), the CPC noticed that the assessee has not declared any income under the head Income from House Property and Income from other sources. Accordingly, ITA No. 143/Bang/2022 M/s. Kalebudde Logistics adjustments were made in the intimation by including house property income of Rs.20,38,470 and income from other sources of Rs.2,07,425.

Appeal before CIT(A): The assessee filed an appeal before CIT(A) mentioning the above facts. The CIT(A) held that the assessee should have declared income under the head “Income from House Property” and “Income from Other Sources”, instead of considering them as Business income. Accordingly, he dismissed the appeal of the assessee.

Appeal before Tribunal: Aggrieved, the assessee filed this appeal before the Tribunal. It was held that the assessee has furnished break-up details of is gross receipts before the authority. It was submitted that the adjustment made to house property income amounting to Rs.20,38,470 is included in the Godown sub-letting charges of Rs.29,12,100. Similarly, the adjustment made to income under the head Income from other sources is the commission income of Rs.2,07,125 included in the gross receipts. Accordingly, the Ld A.R submitted that both these amounts have already been included in the gross receipts on which income has been estimated by the assessee. If any further adjustments are made the same would lead to a double assessment of the same income.

The tribunal found merit in the submissions made by the assessee and the appeal of the assessee was allowed. The assessee has already included the house property income and commission income in its gross receipts. In that case, there is no necessity to make any separate adjustments again. The CPC has taken the view that the said incomes are assessable as house property income/other sources of income. However, the assessee has considered the same as business income. The view so taken by CPC is debatable. In any case, it is established that there is no omission on the part of the assessee to include both the income in its gross receipts. Hence the adjustments made by CPC u/s 143(1) are liable to be deleted. The order passed by Ld CIT(A) is set aside and the AO is directed to delete the adjustments of Rs.20,38,470 and Rs.2,07,425 made in the intimation given u/s 143(1) of the Act.

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