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2024 (4) TMI 137 - AT - Income TaxCorrect head of income - 'Income from House Property or Income from other Sources - taxing gross composite rental income received from let out building space along with inbuilt infrastructure and other amenities - HELD THAT - We find force in the contention of the Counsel that the impugned quarrel is coming from earlier assessment years wherein it has been decided in favour of the assessee and against the Revenue 2022 (8) TMI 1502 - ITAT DELHI wherein Tribunal recorded its unequivocal finding that the lease deed under consideration was composite one and that it answered the description u/s 56(2)(iii) of the Act. Another objection of the Revenue that it is related party transaction has also been rejected by the Tribunal by saying that no adverse view has been taken in determination of ALP with AE by the Ld. TPO nor provisions of Section 40A(2) have ever been invoked. Thus decided in favour of the assessee with the direction to the Ld. AO to follow the decision of the Hon'ble Delhi High Court in Jay Metals 2017 (7) TMI 618 - DELHI HIGH COURT in respect of the assessee's claim of expenses and depreciation u/s 57 - Decided in favour of assessee. Alternate remedy for challenging Scrutiny assessment - disallowance made while processing the return u/s 143(1) - HELD THAT - As intimation passed u/s 143(1) of the Act goes into oblivion once this scrutiny assessment is framed. The intimation passed u/s 143(1) of the Act can be questioned u/s 154 of the Act by way of a rectification application. The assessee can also file an appeal against the said intimation before the First Appellate Authority. In the case under consideration, we find that though the assessee has preferred rectification application before the CPC / AO but has not received any plausible reply / order. We are of the considered view that the remedy is available elsewhere and as the assessee has triggered the available remedy it would be appropriate to consider the remedy there . The remedy sought by the assessee is not available from this forum. Decided against assessee. Non-granting of full tax credit - HELD THAT - AO is duty bound to allow the tax credit of all the taxes paid by the assessee for the year under consideration. Therefore, we direct the AO to give full tax credit after due verification as per the provision of the law. Ground is allowed for statistical purpose
Issues Involved:
1. Validity of assessment orders. 2. Classification of rental income. 3. Adjustments made u/s 143(1) of the Act. 4. Non-granting of full tax credit. 5. Initiation of penalty proceedings u/s 270A. Summary: 1. Validity of Assessment Orders: - The assessee challenged the draft and final assessment orders passed by the National Faceless Assessment Centre and the Commissioner of Income Tax, Circle 16(1), Delhi, as being bad in law and in contravention of section 144B of the Income Tax Act, 1961. However, grounds no. 1 and 2 were general in nature and were not pressed. 2. Classification of Rental Income: - Issue: Taxing gross composite rental income of INR 23,67,03,600 under 'Income from House Property' instead of 'Income from Other Sources'. - Details: The assessee argued that the rental income should be classified under 'Income from Other Sources' based on past tribunal decisions in its favor for AY 2011-12 to AY 2016-17. The Tribunal found force in the assessee's contention, noting that similar issues had been decided in favor of the assessee in earlier years. The Tribunal directed the AO to follow the decision of the Hon'ble Delhi High Court in Jay Metals regarding the assessee's claim of expenses and depreciation u/s 57 of the Act. Thus, ground no. 3 with its sub-grounds was allowed. 3. Adjustments Made u/s 143(1) of the Act: - Issue: The addition/disallowance made by the AO while processing the return u/s 143(1) of the Act. - Details: The Tribunal held that once a scrutiny assessment is framed, the intimation passed u/s 143(1) of the Act goes into oblivion. The remedy for any issues arising from the intimation lies with rectification applications or appeals before the First Appellate Authority. The Tribunal declined to interfere with the findings of the DRP, dismissing ground no. 4 with its sub-grounds but expected the Revenue Authority to consider the assessee's grievance expeditiously. 4. Non-Granting of Full Tax Credit: - Issue: Non-granting of full tax credit amounting to Rs. 6,88,92,071. - Details: The Tribunal directed the AO to allow the tax credit of all taxes paid by the assessee for the year under consideration after due verification as per the law. Ground no. 5 was allowed for statistical purposes. 5. Initiation of Penalty Proceedings u/s 270A: - Issue: The initiation of penalty proceedings u/s 270A of the Act read with section 274. - Details: The Tribunal found ground no. 6 to be premature and did not decide on it at this stage. Result: - The appeal of the assessee for ITA No.- 1483/Del/2022 was partly allowed with specific directions for each issue. - For ITA No.- 1640/Del/2022, similar issues were raised and adjudicated in line with ITA No.- 1483/Del/2022, leading to a partial allowance of the appeal. Order Pronounced in the Open Court on 28.03.2024.
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