Appeal time-barred but condoned due to pandemic; Tribunal rules in favor of assessee on rental income.

The appeal in ITA No.1814/Mum/2020 for A.Y.2012-13 was time-barred by 167 days but was condoned due to the Covid-19 pandemic lockdown. The Tribunal ruled in favor of the assessee, allowing the appeal primarily on the grounds of the treatment of rental income and taxability of reimbursement of maintenance charges. The Tribunal applied the principle of consistency in assessment, noting that similar treatment had been accepted by the Revenue in previous assessments. The appeal was allowed, and the order was pronounced on 30/11/2021.

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Issues:
- Delay condonation petition due to Covid-19 lockdown
- Treatment of rental income under different heads
- Taxability of reimbursement of maintenance charges
- Principle of consistency in assessment

Analysis:
The appeal in ITA No.1814/Mum/2020 for A.Y.2012-13 was time-barred by 167 days, but the delay was condoned due to the Covid-19 pandemic lockdown. The assessee had raised various grounds challenging the order of the ld. CIT(A). The primary issue revolved around the treatment of rental income. The assessee had bifurcated the total rent into rent for premises and hire charges for furniture and fixtures. The ld. AO allowed the rent for premises under "income from house property" but disallowed standard deduction for rent received for furniture under "income from other sources."

The assessee argued that the rental bifurcation was for property tax purposes and not to defraud the tax department. The ld. CIT(A) upheld the ld. AO's decision. However, the assessee contended that similar treatment had been accepted by the Revenue in previous assessments. The Tribunal noted the principle of consistency and ruled in favor of the assessee, allowing the appeal on this ground.

Regarding the taxability of reimbursement of maintenance charges, the Tribunal found that the reimbursement received by the assessee from the tenant did not have an income element and could not be taxed under "income from other sources." The ground raised by the assessee on this issue was allowed.

The Tribunal decided not to adjudicate on additional grounds of appeal filed by the assessee. The general grounds raised by the assessee were deemed not to require adjudication. Ultimately, the appeal of the assessee was allowed, and the order was pronounced on 30/11/2021.

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