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of <h1>Tribunal partially grants appeal on income tax assessment, remands sales-tax issue for verification</h1> <h3>Miltex Laminates Pvt. Ltd. Versus ITO, 6(3) (4), Mumbai</h3> Miltex Laminates Pvt. Ltd. Versus ITO, 6(3) (4), Mumbai - TMI Issues:1. Sales-tax liability cessation and income recognition.2. Treatment of forfeited advance on sale of residential plot.3. Disallowance of rent claim for hiring a Godown.4. Disallowance of depreciation on staff quarter.5. Notional income from house property estimation.Sales-tax liability cessation and income recognition:The appeal concerned the appellant's challenge against the Commissioner of Income Tax (Appeals)'s order partially allowing the appeal related to the assessment under section 143(3) of the Income Tax Act, 1961 for the assessment year 2009-10. The primary issue was the sales-tax liability outstanding in accounts, which the appellant claimed was not payable or recoverable under the law. The appellant argued that if no deduction had been claimed or allowed for the liability in the past, it should not be considered as income. The tribunal emphasized the onus on the appellant to prove the non-deduction of the liability in previous years. The matter was remanded to the Assessing Officer for verification and a decision based on factual findings.Treatment of forfeited advance on sale of residential plot:The appellant had forfeited an advance received for the sale of a residential plot, which continued to be reflected in its books. The tribunal found that the amount was a capital receipt and not income, as the relevant asset was still owned by the appellant. The tribunal ruled in favor of the appellant, stating that the character of the amount would not change over time and should be reduced from the cost of the asset upon its eventual sale.Disallowance of rent claim for hiring a Godown:The disallowance of a rent claim for hiring a Godown was based on the lack of evidence provided by the appellant to substantiate the payment. The tribunal noted that if the appellant could demonstrate the actual renting of the Godown and payment made, there was no reason to disbelieve the claim. The matter was remanded to the Assessing Officer for further verification and a decision based on merits.Disallowance of depreciation on staff quarter:The claim for depreciation on a staff quarter was disallowed due to lack of substantiation by the appellant, whose business had ceased at the relevant location. The tribunal found no merit in the claim, as there was no evidence provided regarding the relevant employee or their work for the appellant. The tribunal upheld the disallowance of the claim.Notional income from house property estimation:The appellant contested the estimation of notional income from a residential property at Vapi, challenging the Annual Value determined by the Assessing Officer. The tribunal upheld the decision of the Commissioner of Income Tax (Appeals), noting that the municipal valuation provided an objective criterion for assessment. The tribunal found the order reasonable and consistent with the law, upholding the assessment of income from the house property.In conclusion, the tribunal partly allowed the appellant's appeal and remanded certain issues for further verification and decision, while upholding the decisions on other issues.
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