Income already declared under one head cannot be taxed under other head simultaneously

The ITAT, Chandigarh in the case of Shri Dinesh Kumar Singhal v. The ITO [ITA NO. 683/Chd/ 2022 dated May 22, 2023] held that income of the assessee which is already taxed in one head cannot be taxed under any other head by the Revenue Department.

Facts:

Shri Dinesh Kumar Singhal (“the Appellant”) filed return of income for the Assessment year 2017-18 inter alia disclosed INR 3,00,000/- under the head Income from House Property and claimed statutory deduction of 30% and net amount of INR 2,10,000/- showed as income under the head Income from House Property.

The Central Processing Centre, Bangalore (“CPC”) against the return filed by the Appellant made a prima facie addition of INR 3,00,000 as Income from Other Sources which was already offered to tax by the Appellant under the head of Income from House Property. The Appellant filed a rectification application before the CPC which was dismissed by CPC vide an Order (“the Order”).

Aggrieved by the dismissal of application the Appellant moved in appeal before the Commissioner of Income Tax (Appeal), Delhi (“CITA”) who vide an Order dated September 09, 2021 (“the Impugned Order”) confirmed the Order of the CPC. Aggrieved thereby the Appellant filed an appeal before the ITAT.

The Appellant contended that the income amounting INR 3,00,000 from House Property was properly disclosed and after claiming of statutory deduction of 30% the net amount of INR  2,10,000 was showed as income under the head Income from House Property which was accepted by the CPC but at the same time addition of INR 3,00,000 related to the same rental income was made by the CPC under the head Income from Other Sources.

Issue

Whether the addition of INR 3,00,000 by the CPC under the head of Income from Other Sources is sustainable?

Held

The ITAT in ITA NO. 683/Chd/ 2022 dated May 22,2023 held as under:

• Observed that, the Appellant has rightly shown income of INR 2,10,000 in his Return of Income under the head ‘Income from House Property’ on annual lettable value of INR 3,00,000 after claiming a statutory deduction of 30%.
• Noted that, addition by the CPC was a clear mistake on record where the CPC at the time of processing the return acknowledged the rental income under head of ‘Income from House Property’ but at the same time taxed such rental income once again under the head ‘Income from Other Sources’ which has resulted in double taxation of the income.
• Directed to delete the addition of INR 3,00,000 by CPC confirmed by the CITA.

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