M/s. FRESCA FINE DINING P. LTD., MUMBAI V. DCIT - 5(1), MUMBAI

ITA 1060/MUM/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8230 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 1 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-03-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Next Hearing Date: 11-11-2010
• Assessment Year: 2002-2003
• Appeal Filed On: 05-02-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHIMA GUPTA
• Assessee Lawyers: D INAMDAR
• Keywords: Depreciation; Cost of acquisition

Judgement Text

IN THE INCOME-TAX APPELLATE TRIBUNAL MUMBAI BENCH F, MUMBAI BEFORE SHRI R.V. EASWAR, PRESIDENT AND SHRI P.M. JAGTAP, ACCOUNTANT MEMBER I.T.A.NO . ASSESSMENT YEAR 5210/MUM/05 : 2001-02 1060/MUM/07 : 2002-03 2002/MUM/08 : 2003-04 691/MUM/09 : 2005-06 M/S. FRESCA FINE DINING PVT. LTD., PENINSULA SPENTA, 2 ND FLOOR, MATHURADAS MILL COMOUND, SENAPATI BAPAT MARG, LOWER PAREL, MUMBAI 400 013 PAN: AAACF 3506 D VS. THE DY. COMMISSIONER OF INCOME TAX-5(1), MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI D. INAMDAR RESPONDENT BY : SMT. ASHIMA GUPTA O R D E R PER P.M. JAGTAP, AM : THESE FOUR APPEALS FILED BY THE ASSESSEE AGAINST FO UR SEPARATE ORDERS PASSED BY THE LEARNED COMMISSIONER OF INCOME-TAX (A PPEALS)-V, MUMBAI, FOR THE ASSESSMENT YEARS 2001-02, 2002-03, 2003-04 AND 200 5-06 INVOLVE SOME COMMON ISSUES, AND THE SAME, THEREFORE, HAVE BEEN HEARD T OGETHER AND ARE BEING DISPOSED OF BY THIS SINGLE CONSOLIDATED ORDER. 2. FIRST WE SHALL TAKE UP THE APPEAL OF THE ASSESSE E FOR THE ASSESSMENT YEAR 2001-02 BEING ITA NO. 5210/MUM/2005, WHICH IS DIREC TED AGAINST THE ORDER OF THE LEARNED CIT(A)-V, MUMBAI, DATED 29.04.2005. 3. GROUND NOS. 1 & 2 OF THIS APPEAL INVOLVE A COMMO N ISSUE RELATING TO THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONF IRMED BY THE LEARNED CIT(A) ON ACCOUNT OF DEPRECIATION. 4. THE ASSESSEE IN THE PRESENT CASE IS A COMPANY, W HICH IS ENGAGED IN THE BUSINESS OF RUNNING A RESTAURANT. THE RETURN OF IN COME FOR THE YEAR UNDER ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 2 CONSIDERATION I.E. ASSESSMENT YEAR 2001-02 WAS FILE D BY IT ON 24.10.2001 DECLARING A LOSS OF RS. 3,09,87,969/-. IN THE SAID YEAR THE ADDITION TO FIXED ASSETS WERE SHOWN BY THE ASSESSEE AT RS.3,66,57,843/- AND DEPRE CIATION THEREON WAS CLAIMED TO THE EXTENT OF RS. 33,08,127/-. WHILE EXAMINING THE CLAIM OF THE ASSESSEE FOR THE SAID DEPRECIATION, IT WAS NOTICED BY THE ASSESS ING OFFICER THAT THE ASSETS CLAIMED TO BE PURCHASED FROM M/S. PIRAMAL HOLDINGS LTD., WERE EARLIER TAKEN ON LEASE BY THE ASSESSEE FROM THE SAID PARTY FOR A PER IOD OF SIX YEARS BY LEASE AGREEMENT DATED 16.09.1999. HE ALSO NOTICED THAT E VEN FOR THE YEAR UNDER CONSIDERATION ENDING ON 31.3.2001, LEASE RENT WAS P AID BY THE ASSESSEE TO M/S. PIRAMAL HOLDINGS LTD. ACCORDING TO HIM, THE ASSESSE E THUS WAS HOLDING THE SAID ASSETS ON LEASE ON 31.3.2001 AND THE SAME TAKEN ON LEASE ON THAT DAY I.E. 31.3.2001 WERE SHOWN TO BE PURCHASED BY THE ASSESS EE ON 31.3.2001. THE ASSESSING OFFICER ALSO NOTICED THAT THE SAID ASSETS CLAIMED TO BE PURCHASED BY THE ASSESSEE FROM M/S. PIRMAL HOLDINGS LTD. ON 31.3.200 1 WERE GIVEN ON LEASE BY THE ASSESSEE TO M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD., FOR A PERIOD OF FIVE YEARS AND THE TOTAL COST OF THE ASSETS SO LEASED OUT WAS MENTIONED IN THE LEASE AGREEMENT AT RS. 1,75,73,871/- ONLY. HE, THEREFORE , REQUIRED THE ASSESSEE TO EXPLAIN WHY THE VALUE OF ASSETS SHOULD NOT BE TAKEN AT RS. 1,75,73,871/- AS AGAINST RS. 3,66,57,843/- AS SHOWN BY IT FOR THE PU RPOSE OF COMPUTING DEPRECIATION ALLOWABLE ON THE SAID ASSETS. IN REPLY, IT WAS SUBM ITTED BY THE ASSESSEE THAT OUT OF THE TOTAL ASSETS ACQUIRED FROM M/S. PIRAMAL HOLDING S LTD., ONLY SOME ASSETS WERE LEASED OUT TO M/S. OVERSEAS CHINESE CUISINE (I) PVT . LTD., VIDE BUSINESS CONDUCTING AGREEMENT ENTERED INTO WITH THE SAID PARTY. IT WAS SUBMITTED THAT THERE WERE VARIOUS ASSETS MAINLY IN THE NATURE OF IMMOVABLES AND THE SAME BEING NOT CAPABLE OF INDEPENDENTLY COUNTED OR QUANTIFIED, THE Y WERE NOT SPECIFICALLY LEASED OUT TO M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD., DESPITE THE FACT THAT THEY WERE VERY MUCH FORMING PART OF THE RESTAURANT, NAMELY, C HINA GARDEN, WHICH WAS GIVEN ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 3 TO THEM FOR RUNNING THE BUSINESS AS PER THE CONDUCT ING AGREEMENT. THE COPIES OF THE BILLS RAISED BY M/S. PIRAMAL HOLDINGS LTD. WERE ALSO FILED BY THE ASSESSEE TO SHOW THAT THE TOTAL PURCHASE VALUE OF THE ASSETS AC QUIRED BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION WAS RS.366.57 LAKHS. F ROM THE DETAILS GIVEN IN THE ANNEXURES TO THE SAID BILLS, IT WAS NOTICED BY THE ASSESSING OFFICER THAT EVEN VARIOUS EXPENSES INCURRED BY M/S. PIRAMAL HOLDINGS LTD., WERE INCLUDED IN THE PURCHASE VALUE OF ASSETS ACQUIRED BY THE ASSESSEE. IN THIS REGARD, IT WAS EXPLAINED BY THE ASSESSEE THAT THE SAID EXPENSES WERE CAPITAL IZED BY M/S. PIRAMAL HOLDINGS LTD., HAVING BEEN INCURRED PRIOR TO THE ACQUISITION OF ASSETS AND THE SAME WERE THUS RIGHTLY INCLUDED IN THE VALUE OF RELEVANT ASSE TS SOLD TO THE ASSESSEE. THIS EXPLANATION OF THE ASSESSEE WAS NOT FOUND ACCEPTABL E BY THE ASSESSING OFFICER AND RELYING ON THE VALUE OF ASSETS SHOWN BY THE ASSESSE E IN THE AGREEMENT ENTERED INTO WITH M/S. OVERSEAS CHINESE CUISINE (I) PVT. LT D. AT RS. 1,75,73,871/-, HE HELD THAT THE PURCHASE VALUE OF THE SAID ASSETS WAS INF LATED BY THE ASSESSEE TO RS. 3,66,57,843/- FOR CLAIMING HIGHER DEPRECIATION. FO R THIS CONCLUSION, HE ALSO RELIED ON THE FACT THAT M/S. PIRAMAL HOLDINGS LTD., WAS TH E SISTER CONCERN OF THE ASSESSEE COMPANY. SINCE THE GENUINENESS OF THE ASSESSEES CL AIM OF HAVING PURCHASED THE FIXED ASSETS FROM M/S. PIRAMAL HOLDINGS LTD., AS ON 31.3.2001 WAS NOT ACCEPTED BY HIM IN VIEW OF THE EXISTENCE OF LEASE AGREEMENT AS ON THAT DATE, NO DEPRECIATION ON THE SAID FIXED ASSET WAS FINALLY ALLOWED BY HIM FOR THE YEAR UNDER CONSIDERATION. 5. THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOUNT OF ITS CLAIM FOR DEPRECIATION ON THE ASSETS PURCHASED DURING THE YEAR UNDER CONSIDERATION FROM M/S. PIRAMAL HOLDINGS LTD., WAS CHALLENGED BY THE ASSESSEE IN AN APPEAL FILED BEFORE THE LEARNED CIT(A) AND THE SUBMISSIONS MADE BEFORE THE ASSESSING OFFICER WERE REITERATED ON ITS BEHALF BEFORE THE LEARNED CI T(A). AFTER CONSIDERING THE SAID SUBMISSIONS AS WELL AS THE MATERIAL AVAILABLE ON RE CORD BEFORE HIM, THE LEARNED ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 4 CIT(A) HELD THAT THERE WAS FAILURE ON THE PART OF T HE ASSESSEE TO GIVE THE RELEVANT DETAILS OF THE ASSETS THAT WERE PURCHASED FROM M/S. PIRAMAL HOLDINGS LTD., BUT NOT GIVEN TO M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD . AS PER THE CONDUCTING AGREEMENT. HE HELD THAT IN THE ABSENCE OF THE SAID DETAILS, THE ASSESSING OFFICER WAS FULLY JUSTIFIED IN TAKING THE VALUE OF ASSETS P URCHASED BY THE ASSESSEE AT RS. 1,75,73,871/- AS AGAINST RS. 3,66,57,843/- CLAIMED BY THE ASSESSEE. HE ALSO AGREED WITH THE CONCLUSION OF THE ASSESSING OFFICER THAT THE SAID ASSETS COULD NOT BE SIMULTANEOUSLY LEASED OUT BY M/S. PIRAMAL HOLDIN GS LTD., TO THE ASSESSEE AS WELL AS SOLD BY THE SAID PARTY TO THE ASSESSEE ON THE SA ME DATE I.E. 31.03.2001 WHEN THE LEASE AGREEMENT WAS SUBSISTING. HE HELD THAT T HERE WAS THUS NO VALID TRANSFER OF ASSETS FROM M/S. PIRAMAL HOLDINGS LTD., TO THE A SSESSEE COMPANY AS ON 31.03.2001 AND THE CLAIM OF THE ASSESSEE FOR DEPREC IATION ON THE SAID ASSETS FOR THE YEAR CONSIDERATION WAS RIGHTLY REJECTED BY THE ASSESSING OFFICER. 6. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED T HAT THE PREMISES WAS TAKEN ON RENT BY THE ASSESSEE COMPANY ON 10.06.1999 FOR RUNNING ITS RESTAURANT BUSINESS. HE SUBMITTED THAT IMMEDIATELY THEREAFTER I.E. ON 16.09.1999, THE ASSETS REQUIRED FOR RUNNING THE RESTAURANT WERE TAKEN ON L EASE BY THE ASSESSEE FROM THE GROUP COMPANY M/S. PIRAMAL HOLDINGS LTD., FOR A PE RIOD OF FIVE YEARS. HE SUBMITTED THAT ON 24.06.2000, AGREEMENT WAS ENTERED INTO BY THE ASSESSEE WITH M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD. FOR CON DUCTING THE RESTAURANT BUSINESS AND ON 31.03.2001, THE ASSETS TAKEN EARLIER ON LEAS E WERE PURCHASED BY THE ASSESSEE FROM M/S. PIRAMAL HOLDINGS LTD., FOR RS. 3 .66 CRORES AND THE SAME WERE GIVEN ON LEASE TO M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD. HE SUBMITTED THAT THE SAID ASSETS HAVING BEEN PURCHASED BY THE ASSESS EE ON 31.03.2001 FOR A VALUE OF RS. 3.66 CRORES, DEPRECIATION THEREIN WAS CLAIME D WHICH HAS BEEN DISALLOWED BY THE ASSESSING OFFICER AS WELL AS THE CIT(A) ON TWO GROUNDS. HE SUBMITTED THAT THE FIRST GROUND GIVEN BY THEM IS THAT THE COST OF ACQU ISITION OF ASSETS WAS INFLATED BY ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 5 THE ASSESSEE TO CLAIM HIGHER DEPRECIATION. HE SUBMI TTED THAT THIS ALLEGATION WAS MADE ON THE BASIS OF CONDUCTING AGREEMENT ENTERED W ITH M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD., WHEREIN THE VALUE OF ASSETS GIVEN TO THE SAID PARTY WAS INDICATED AT RS.1.76 CRORES. IN THIS REGARD, HE INV ITED OUR ATTENTION TO THE COPY OF THE LETTER SUBMITTED TO THE ASSESSING OFFICER PLACE D AT PAGE NO.71 OF HIS PAPER BOOK TO SHOW THAT THE DIFFERENCE IN PRICE OF ASSE TS WAS DULY EXPLAINED BY THE ASSESSEE BY POINTING OUT THAT VARIOUS ASSETS MAINLY IN THE NATURE OF IMMOVABLE PROPERTY PURCHASED BY THE ASSESSEE FROM M/S. PIRAMA L HOLDINGS LTD., WERE NOT SPECIFICALLY INCLUDED IN THE CONDUCTING AGREEMENT E NTERED INTO WITH M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD., DESPITE THE FACT TH AT THEY WERE FORMING PART OF THE RESTAURANT, VIZ. CHINA GARDEN. HE ALSO INVITED OUR ATTENTION TO THE COPIES OF THE BILLS RAISED BY M/S. PIRAMAL HOLDINGS LTD., ALONG W ITH ANNEXURES THERETO PLACED AT PAGE NOS. 121 TO 131 OF HIS PAPER BOOK TO POINT OUT THAT THE DETAILS OF EACH AND EVERY ASSET ALONG WITH THEIR RESPECTIVE VALUE GIVEN THEREIN WERE SUFFICIENT TO SHOW THAT THE SAID ASSETS WERE ACQUIRED BY THE ASSESSEE FOR A TOTAL VALUE OF RS. 3.66 CRORES. HE CONTENDED THAT BOTH THE ASSESSEE COMPANY AND M/S.PIRAMAL HOLDINGS LTD., ARE LOSS MAKING COMPANIES AND SINCE BY SHOWIN G TRANSFER OF ASSETS ON 31.03.2001, PIRAMAL HOLDINGS LTD. COULD NOT CLAIM A NY DEPRECIATION ON THE SAID ASSETS WHEREAS THE ASSESSEE COMPANY COULD CLAIM DE PRECIATION ONLY FOR SIX MONTHS, IT CANNOT BE SAID THAT THERE WAS A TRANSFER OF ASSETS AT INFLATED PRICE TO CLAIM HIGHER DEPRECIATION IN ORDER TO AVOID PAYMENT OF TAX. AS REGARDS THE OTHER OBJECTIONS OF THE AUTHORITIES BELOW DISPUTING THE GENUINENESS OF TRANSFER OF ASSETS AS ON 31.03.2001, DUE TO SUBSISTENCE OF LEASE AGREE MENT ON THAT DATE, THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE SAID A SSETS HAVING BEEN USED BY THE ASSESSEE ON LEASE, LEASE RENTAL WAS PAID UPTO 31.03 .2001 AND AS A RESULT OF PURCHASE OF THE SAID ASSETS BY THE ASSESSEE COMPANY FROM M/S. PIRAMAL HOLDINGS LTD., ON 31.03.2001, THE LEASE AGREEMENT WAS AUTOMA TICALLY TERMINATED AND THERE ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 6 WAS NO QUESTION OF SUBSISTENCE OF LEASE AGREEMENT A FTER THE ASSETS HAVING BEEN SOLD BY PIRAMAL HOLDINGS LTD. TO THE ASSESSEE COMPA NY. HE CONTENDED THAT THE FIXED ASSETS THUS WERE PURCHASED BY THE ASSESSEE ON 31.03.2001 FOR AN AGREED VALUE AND THE SAID ASSETS HAVING BEEN UTILIZED FOR THE PURPOSE OF ITS BUSINESS DEPRECIATION THEREON WAS RIGHTLY CLAIMED BY THE ASS ESSEE ON THE AGREED SALES VALUE WHICH WAS TAKEN AS COST OF ACQUISITION. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUBMITTED THAT THE RELEVANT ASSETS WERE TAKEN BY THE ASSESSEE ON LEASE FOR A PERIOD OF FIVE YEARS AND WHEN THE LEASE AGREEMENT WAS VALIDLY IN E XISTENCE ON 31.3.2001, HOW THE ASSESSEE COULD PURCHASE SAME ASSETS TAKEN ON LE ASE AS ON 31.03.2001 WHEN THE LEASE PERIOD WAS NOT EXPIRED. HE CONTENDED THA T WHEN THE LEASE RENT WAS PAID BY THE ASSESSEE UPTO 31.03.2001, THE ASSETS TAKEN O N LEASE COULD HAVE BEEN PURCHASED BY THE ASSESSEE ONLY ON 1.4.2001 AS RIGHT LY HELD BY THE AUTHORITIES BELOW. HE CONTENDED THAT THE CLAIM OF THE ASSESSEE FOR DEPRECIATION ON THE SAID ASSETS IN ADDITION TO THE LEASE RENT PAID THEREON T HUS WAS RIGHTLY DISALLOWED BY THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A). AS REGARDS THE COST OF ACQUISITION OF THE SAID ASSES, HE SUBMITTED THAT SUCH COST AS I NDICATED BY THE ASSESSEE IN THE CONDUCTING AGREEMENT WAS ONLY RS.1.76 CRORES AS AGA INST RS. 3.66 CRORES CLAIMED BY THE ASSESSEE AND SINCE THIS DIFFERENCE COULD NOT BE SATISFACTORILY EXPLAINED BY THE ASSESSEE DESPITE SUFFICIENT AND SPECIFIC OPPORT UNITY GIVEN TO IT, THE COST OF ACQUISITION OF ASSETS AS CLEARLY INDICATED IN THE BUSINESS CONDUCTING AGREEMENT WAS RIGHTLY ADOPTED BY THE AUTHORITIES BELOW. HE C ONTENDED THAT THE ASSETS CLAIMED TO BE PURCHASED BY THE ASSESSEE FROM M/S. P IRAMAL HOLDINGS LTD., BUT NOT INCLUDED IN THE CONDUCTING AGREEMENT COULD NOT BE SPECIFICALLY IDENTIFIED BY THE ASSESSEE AND IN THE ABSENCE OF SUCH IDENTIFICATION, THE EXPLANATION OF THE ASSESSEE REGARDING THE DIFFERENCE IN THE VALUE OF ASSETS ACQ UIRED FROM M/S. PIRAMAL HOLDINGS LTD., WAS RIGHTLY NOT ACCEPTED BY THE AUTHORITIES BELOW. ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 7 8. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND ALS O PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS OBSERVED THAT THE PREMISE S WAS TAKEN BY THE ASSESSEE ON RENT IN THE MONTH OF JUNE 1999 FOR RUNNING ITS REST AURANT BUSINESS AND BY AN AGREEMENT DATED 16.09.1999, OTHER ASSETS REQUIRED F OR THE SAID BUSINESS WERE TAKEN ON LEASE BY THE ASSESSEE FROM ITS GROUP CONCE RN M/S. PIRAMAL HOLDINGS LTD., FOR A PERIOD OF FIVE YEARS. SUBSEQUENTLY, AN AGREEM ENT FOR CONDUCTING THE RESTAURANT BUSINESS WAS ENTERED INTO BY THE ASSESSE E ON 24.06.2000 WITH M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD. AND THEREAFT ER ON 31.03.2001, THE ASSETS EARLIER TAKEN ON LEASE FROM PIRAMAL HOLDINGS LD. WE RE PURCHASED BY THE ASSESSEE FOR A CONSIDERATION OF RS. 3.66 CRORES. SINCE THE SAID ASSETS EARLIER TAKEN ON LEASE AND THEREAFTER PURCHASED ON 31.3.2001 WERE USED FOR ITS BUSINESS FOR RUNNING THE RESTAURANT, DEPRECIATION THEREON WAS CLAIMED BY THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION. THE CLAIM OF THE ASSESSEE FOR THE SA ID DEPRECIATION, HOWEVER, WAS DISALLOWED BY THE ASSESSING OFFICER AS WELL AS BY T HE LEARNED CIT(A) MAINLY FOR TWO REASONS. FIRSTLY, THEY WERE OF THE OPINION THAT THE LEASE AGREEMENT UNDER WHICH THE SAID ASSETS WERE ACQUIRED BY THE ASSESSEE COMPA NY BEING IN SUBSISTENCE ON 31.3.2001, THE ASSESSEE COULD NOT VALIDLY PURCHASE THE SAME ON THAT DATE. IT WAS HELD BY THEM IN THIS CONTEST THAT LEASE RENT HAVING BEEN PAID BY THE ASSESSEE UPTO 31.3.2001, THE ASSETS COULD HAVE BEEN PURCHASED BY IT ONLY ON 01.04.2001. SECONDLY, THE COST OF ACQUISITION CLAIMED BY THE AS SESSEE AT RS.3.66 CRORES WAS ALSO NOT ACCEPTED BY THEM MAINLY ON THE GROUND THAT THE VALUE OF THE SAID ASSETS AS INDICATED BY THE ASSESSEE IN THE CONDUCTING AG REEMENT ENTERED INTO WITH M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD., WAS ONLY RS .1.76 CRORES. IT WAS ALLEGED THAT THE ASSESSEE THUS HAD INFLATED THE COST OF ACQUISIT ION OF THE SAID ASSETS TO CLAIM HIGHER DEPRECIATION IN ORDER TO AVOID THE PAYMENT OF TAX. 9. AFTER HAVING CONSIDERED THE SUBMISSIONS MADE BY BOTH THE PARTIES BEFORE US AS WELL AS THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE OPINION THAT BOTH ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 8 THE REASONS GIVEN BY THE AUTHORITIES BELOW TO DISAL LOW THE CLAIM OF THE ASSESSEE FOR DEPRECIATION ON FIXED ASSES ARE NOT TENABLE. AS REG ARDS THE COST OF ACQUISITION, IT IS OBSERVED THAT THE CLAIM OF THE ASSESSEE OF HAVING P URCHASED THE FIXED ASSETS FROM PIRAMAL HOLDINGS LTD., AT RS. 3.66 CRORES WAS DULY SUPPORTED BY THE BILLS ISSUED BY THE SAID PARTY. THE COPIES OF THE SAID BILLS ALONG WITH ANNEXURES ARE PLACED AT PAGE NOS. 121 TO 131 OF THE ASSESSEES PAPER BOOK A ND A PERUSAL OF THE SAME SHOWS THAT ALL THE MINUTE DETAILS IN RESPECT OF EAC H AND EVERY ITEM OF ASSETS SOLD BY PIRAMAL HOLDINGS LTD., TO THE ASSESSEE COMPANY W ERE GIVEN THEREIN ALONG WITH THEIR RESPECTIVE WRITTEN DOWN VALUE AS ON 31.03.200 1. AS REGARDS THE OBJECTION OF THE AUTHORITIES BELOW RELATING TO VARIOUS EXPENSES INCLUDED IN THE SAID VALUE, IT IS OBSERVED THAT THE SAID EXPENSES HAVING BEEN APPAREN TLY INCURRED BY M/S. PIRAMAL HOLDINGS LTD., PRIOR TO THE ACQUISITION OF RESPECTI VE ASSETS WERE CAPITALIZED IN ITS BOOKS OF ACCOUNT AND THE SAME DULY INCLUDED IN THE WRITTEN DOWN VALUE OF THE SAID ASSETS IN THE BOOKS OF M/S. PIRAMAL HOLDINGS L TD., WERE INCLUDED IN THE CONSIDERATION FOR TRANSFER OF THE SAID ASSETS BY M/ S. PIRMAL HOLDINGS LTD., TO THE ASSESSEE. IN OUR OPINION, THE COST OF ACQUISITION OF THE SAID ASSETS AS CLAIMED BY THE ASSESSEE THUS WAS DULY SUPPORTED AND SUBSTANTIA TED BY THE RELEVANT DETAILS FURNISHED BY M/S. PIRAMAL HOLDINGS LTD., IN THE BIL LS RAISED ON THE ASSESSEE FOR SALE OF RELEVANT ASSETS. THE AUTHORITIES BELOW, HOWEVER, IGNORED THIS VITAL EVIDENCE AND ADOPTED THE COST OF ASSETS ACQUIRED BY THE ASSESSEE AT RS.1.76 CRORES RELYING ON THE CONDUCTING AGREEMENT ENTERED INTO BY THE ASSESS EE WITH M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD., WHEREIN THE COST OF ASSETS PROVIDED BY THE ASSESSEE TO M/S. OVERSEAS CHINESE CUISINE (I) PVT. LTD. WAS INDICATED AT RS.1.76 CRORES. THIS DIFFERENCE, HOWEVER, WAS EXPLAINED BY THE ASS ESSEE VIDE LETTER DATED 23.09.2003 FILED BEFORE THE A.O. (COPY PLACED AT PA GES 71 TO 73 OF THE ASSESSEES PAPER BOOK) WHEREIN IT WAS SUBMITTED BY THE ASSESSE E THAT SOME OF THE ASSETS WHICH WERE MAINLY IN THE NATURE OF IMMOVABLE ASSETS AND WHICH WERE FORMING PART ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 9 OF THE RESTAURANT, VIZ. CHINA GARDEN, HAD NOT BEEN SPECIFICALLY INCLUDED IN THE CONDUCTING AGREEMENT WITH M/S. OVERSEAS CHINESE CUI SINE (I) PVT. LTD. THE DETAILS OF SUCH ASSETS ALONG WITH THE APPROXIMATE V ALUE THEREOF WERE ALSO FURNISHED BY THE ASSESSEE. THE ASSESSING OFFICER AS WELL AS THE LEARNED CIT(A) DID NOT ACCEPT THIS EXPLANATION OF THE ASSESSEE ON THE GROUND THAT THE ASSESSEE FAILED TO IDENTIFY SUCH ASSETS. IN OUR OPINION, HAVING REG ARD TO THE NATURE OF THE SAID ASSETS, SUCH AS CIVIL WORKS, INTERIOR DECORATION, ELECTRICAL WORK, FIXTURES, ETC. PROVIDED IN THE RESTAURANT, IT WAS PRACTICALLY DIFF ICULT TO IDENTIFY SUCH ASSETS SEPARATELY AND IN ANY CASE, THIS WAS NOT THE JUSTIF IABLE REASON TO REJECT THE EXPLANATION OF THE ASSESSEE ALTOGETHER AND TO ADOPT THE COST OF ACQUISITION OF ASSETS AT RS.1.76 CRORES AS INDICATED IN THE CONDUC TING AGREEMENT AS AGAINST THE COST OF RS. 3.66 CRORES CLAIMED BY THE ASSESSEE WHI CH WAS DULY SUPPORTED BY THE BILLS RAISED BY PIRAMAL HOLDINGS LTD., GIVING ALL THE RELEVANT DETAILS OF THE ASSETS AND BASIS OF VALUATION THEREOF. 10. AS REGARDS THE ALLEGATION OF THE REVENUE AUTHOR ITIES THAT THE ASSETS EARLIER LEASED OUT WERE TRANSFERRED BY M/S. PIRAMAL HOLDING S LTD., TO THE ASSESSEE COMPANY AS ON 31.03.2001 AT THE INFLATED PRICE IN O RDER TO CLAIM HIGHER DEPRECIATION FOR AVOIDING PAYMENT OF TAX, WE FIND M ERIT IN THE CONTENTION OF THE LEARNED COUNSEL FOR THE ASSESSEE THAT THE SAME IS BASELESS KEEPING IN VIEW THE FACT THAT BOTH M/S. PIRAMAL HOLDINGS LTD., AND THE ASSESSEE COMPANY WERE LOSS MAKING COMPANIES AND EVEN THEIR ASSESSED INCOME FOR THE YEAR UNDER CONSIDERATION WAS NEGATIVE. MOREOVER, BY TRANSFER O F ITS ASSETS ON 31.03.2001, M/S. PIRAMAL HOLDINGS LTD., HAD BECOME DISENTITLED TO CLAIM ANY DEPRECIATION THEREON WHICH IT COULD HAVE OTHERWISE CLAIMED FOR T HE ENTIRE YEAR. INSTEAD, THE ASSESSEE COMPANY BECAME ENTITLED TO CLAIM DEPRECIAT ION ON THE SAID ASSETS ONLY FOR SIX MONTHS. IN OUR OPINION, IT CANNOT, THEREFO RE, BE SAID THAT THE ASSETS WERE TRANSFERRED BY M/S. PIRAMAL HOLDINGS LTD., TO THE ASSESSEE COMPANY AS ON ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 10 31.03.2001 AT INFLATED PRICE TO CLAIM HIGHER DEPREC IATION IN ORDER TO AVOID PAYMENT OF TAX. 11. AS REGARDS THE OTHER OBJECTION OF THE REVENUE A UTHORITIES THAT IN VIEW OF THE SUBSISTENCE OF LEASE AGREEMENT AS ON 31.03.2001 THE ASSETS LEASED OUT UNDER THE SAID AGREEMENT COULD NOT BE VALIDLY TRANSFERRED BY M/S. PIRAMAL HOLDINGS LTD. TO THE ASSESSEE COMPANY, IT IS OBSERVED THAT THE SA ID ASSETS WERE HELD BY THE ASSESSEE ON LEASE FOR THE ENTIRE YEAR UNDER CONSIDE RATION AND ACCORDINGLY LEASE RENT FOR THE SAME WAS PAID AND CLAIMED AS EXPENDIT URE. ON THE LAST DATE OF THE SAID YEASR I.E. ON 31.03.2001, THE ASSETS TAKEN EAR LIER ON LEASE, HOWEVER, WERE PURCHASED BY THE ASSESSEE FROM M/S. PIRAMAL HOLDIN GS LTD. AND AS A RESULT OF THE SAID TRANSACTION INVOLVING PURCHASE OF ASSETS BY TH E ASSESSEE COMPANY AND SALE THEREOF BY M/S. PIRAMAL HOLDINGS LTD., THE LEASE A GREEMENT STOOD TERMINATED ON 31.3.2001 ITSELF. IN OUR OPINION, IT CANNOT, THERE FORE, BE SAID THAT THE SAID LEASE AGREEMENT WAS IN SUBSISTENCE AT THE TIME OF PURCHAS E OF ASSETS BY THE ASSESSEE AND THAT THE TRANSACTION INVOLVING SUCH PURCHASE WA S NOT VALID. THE MOMENT M/S. PIRAMAL HOLDNGS LTD., AGREED TO SELL THE ASSETS AND THE ASSESSEE COMPANY AGREED TO PURCHASE THE SAME ON 31.03.2001, IT AUTOMATICAL LY FOLLOWED THAT BOTH THE SIDES AGREED TO TERMINATE THE LEASE AGREEMENT SINCE WITHO UT SUCH TERMINATION, THE PURCHASE OF ASSETS BY THE ASSESSEE COMPANY AND SALE THEREOF BY M/S. PIRAMAL HOLDINGS LTD., WAS NOT POSSIBLE. WE, THEREFORE, DO NOT FIND ANY MERIT IN THE STAND TAKEN BY THE REVENUE AUTHORITIES ON THIS ISSUE THAT THE LEASE AGREEMENT WAS IN SUBSISTENCE AS ON 31.03.2001 AND THE ASSESSEE, THER EFORE, COULD PURCHASE THE ASSETS FROM M/S. PIRAMAL HOLDINGS LTD., VALIDLY ON 1.4.2001 OR THEREAFTER. IN OUR OPINION, THERE WAS A VALID TRANSFER OF ASSETS BY PI RMAL HOLDINGS LTD., TO THE ASSESSEE COMPANY AS ON 31.3.2001 AND SINCE THE ASSE SSEE HAD BECOME THE OWNER OF THE SAID ASSETS ON THAT DAY AND THE SAME WERE US ED FOR ITS BUSINESS OF RUNNING THE RESTAURANT, IT WAS ENTITLED FOR DEPRECIATION AS CLAIMED. IN THAT VIEW OF THE ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 11 MATTER, WE REVERSE THE IMPUGNED ORDER OF THE LEARNE D CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE FO R DEPRECIATION ON FIXED ASSETS PURCHASED FROM M/S. PIRAMAL HOLDINGS LTD. GROUND N OS.1 & 2 OF THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2001-02 ARE ACCORDIN GLY ALLOWED. 12. THE ISSUE RAISED BY THE ASSESSEE IN GROUND NO.3 RELATES TO THE DISALLOWANCE OF RS. 72,51,650/-, MADE BY THE ASSESS ING OFFICER AND CONFIRMED BY THE LEARNED CIT(A) OUT OF LEASE RENT PAID TO M/S. P IRAMAL HOLDINGS LTD. 13. AS PER THE LEASE AGREEMENT, THE LEASE RENT PAID BY THE ASSESSEE TO PIRAMAL HOLDINGS LTD., AT 33% OF THE VALUE OF ASSE TS GIVEN ON LEASE WAS CLAIMED BY THE ASSESSEE AS EXPENDITURE. SINCE THE SAID VAL UE OF ASSETS CLAIMED BY THE ASSESSEE WAS NOT ACCEPTED BY THE ASSESSING OFFICER AND THE SAME WAS TAKEN AT RS. 1,75,73,871/-, HE RESTRICTED THE CLAIM OF THE A SSESSEE FOR DEDUCTION ON ACCOUNT OF LEASE RENTALS ONLY TO THE EXTENT OF 33% OF RS. 1 .75,73,871/- AS AGAINST 33% OF RS. 3,53,78,163/-. THE LEARNED CIT(A) UPHELD THE D ECISION OF THE ASSESSING OFFICER ON THIS ISSUE AS THE ACTION OF THE ASSESSING OFFICE R IN TAKING THE VALUE OF RELEVANT ASSETS AT RS. 1,75,73,871/- WAS UPHELD BY HIM. 14. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. WE HAVE ALREADY HELD W HILE DISPOSING OF GROUND NO.1 & 2 OF THIS APPEAL OF THE ASSESSEE THAT THE VALUE O F ASSETS TAKEN ON LEASE BY THE ASSESSEE WAS RS. 3.66 CRORES AS CLAIMED. CONSEQUENT LY, THE LEASE RENTAL PAID BY THE ASSESSEE TO PIRAMAL HOLDINGS LTD., AT 33% OF T HE SAID VALUE AS PER LEASE AGREEMENT WILL BE ALLOWABLE AS DEDUCTION AS CLAIMED BY THE ASSESSEE. WE, THEREFORE, DIRECT THE ASSESSING OFFICER TO ALLOW TH E CLAIM OF THE ASSESSEE FOR DEDUCTION ON ACCOUNT OF LEASE RENTALS PAID TO M/S . PIRAMAL HOLDINGS LTD., AND ALLOW GROUND NO.3 OF THE ASSESSEE. ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 12 15. THE ISSUE RAISED BY THE ASSESSEE IN GROUND NO.4 RELATES TO THE DISALLOWANCE OF RS. 18,16.750/- MADE BY THE ASSESSI NG OFFICER AND CONFIRMED BY THE CIT(A) ON ACCOUNT OF LEASE PREMIUM PAID BY THE ASSESSEE. 16. IN ITS PROFIT AND LOSS ACCOUNT, A SUM OF RS. 1 8,16,750/- WAS DEBITED BY THE ASSESSEE AS LEASE PREMIUM BEING 1/6 TH OF THE TOTAL LEASE PREMIUM OF RS. 1.09 CRORES PAYABLE BY IT FOR ACQUIRING THE RIGHTS TO US E THE PREMISES FOR ITS HOTEL BUSINESS FOR A PERIOD OF SIX YEARS. ACCORDING TO TH E ASSESSING OFFICER, THE ASSESSEE, HOWEVER, COULD NOT JUSTIFY THE PAYMENT OF SUCH HUGE LEASE PREMIUM IN RESPECT OF PREMISES TAKEN ON LEASE FROM ANOTHER GROUP COMPANY. HE, THEREFORE, DISALLOWED THE CLAIM OF THE ASSESSEE FOR LEASE PREMIUM, WHICH THE LEARNED CIT(A) CONFIRMED ON THE GROUND THAT THERE WAS APPARENTLY NO JUSTIFIA BLE REASON FOR THE ADDITIONAL PAYMENT OF LEASE PREMIUM WHEN THE USER OF THE PREMI SES AS WELL AS ALL THE ITEMS PROVIDED THEREIN WERE ALREADY PAID FOR SEPARATELY. 17. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES A ND ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS POINTED BY THE LEAR NED COUNSEL FOR THE ASSESSEE FROM THE COPY OF THE RELEVANT AGREEMENT, THE ASSESS EE COMPANY AS USER OF THE PREMISES WAS LIABLE TO PAY A PREMIUM OF RS. 1.09 LA KHS FOR ACQUIRING THE RIGHTS TO USE THE PREMISES FOR A PERIOD OF SIX YEARS. AS FUR THER POINTED OUT BY HIM FROM THE DETAILS OF OTHER PREMISES GIVEN ON RENT IN THE SAME BUILDING, TOTAL COMPENSATION PAID BY THE ASSESSEE FOR THE USE OF THE PREMISES IN CLUDING THE LEASE PREMIUM WAS AT LOWER RATE THAN THE RATE CHARGED TO THE OTHER TE NANT. KEEPING IN VIEW THESE SUBMISSIONS MADE BY THE LEARNED COUNSEL FOR THE ASS ESSEE, WE FIND THAT THE LEASE PREMIUM PAID BY THE ASSESSEE FOR THE USE OF PREMISE S WAS REASONABLE AND THERE BEING NO CASE MADE OUT BY THE AUTHORITIES BELOW TO SHOW THAT THE SAME WAS EXCESSIVE OR UNREASONABLE AS COMPARED TO THE PREVAI LING MARKET RATE, WE FIND NO JUSTIFIABLE REASON TO SUSTAIN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 13 CONFIRMED BY THE LEARNED CIT(A) ON THIS ISSUE. THE SAME IS, THEREFORE, DELETED ALLOWING GROUND NO. 4 OF THE ASSESSEES APPEAL. ITA NO. 1060/MUM/07 ASSESSMENT YEAR : 2002-03 18. THE ISSUE RAISED IN GROUND NOS. 1 & 2 OF THIS APPEAL IS SIMILAR TO THE ONE RAISED IN GROUND NOS. 1 & 2 OF THE APPEAL DECIDED B Y US FOR THE ASSESSMENT YEAR 2001-02 BEING ITA NO. 5210/MUM/05. FOLLOWING OUR D ECISION RENDERED IN A.Y. 2001-02 WE REVERSE THE IMPUGNED ORDER OF THE LEARNE D CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE FO R DEPRECIATION ON FIXED ASSETS PURCHASED FROM M/S. PIRAMAL HOLDINGS LTD., GROUND NOS.1 & 2 OF THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2002-03 ARE ACCORDIN GLY ALLOWED. 19. THE ISSUE RAISED IN GROUND NO. 3 OF THIS APPEAL IS SIMILAR TO THE ONE RAISED IN GROUND NO. 4 OF THE APPEAL OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 2001-02 BEING ITA NO. 5210/M/05. FOLLOWING OUR DECISION RE NDERED IN A.Y. 2001-02, WE HOLD THAT THE LEASE PREMIUM PAID BY THE ASSESSEE FO R THE USE OF PREMISES WAS REASONABLE AND THERE BEING NO CASE MADE OUT BY THE AUTHORITIES BELOW TO SHOW THAT THE SAME WAS EXCESSIVE OR UNREASONABLE AS COMP ARED TO THE PREVAILING MARKET RATE, WE FIND NO JUSTIFIABLE REASON TO SUSTA IN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT (A) ON THIS ISSUE. THE SAME IS, THEREFORE, DELETED ALLOWING GROUND NO. 3 OF THE ASS ESSEES APPEAL. ITA NO. 2002/MUM/08 ASSESSMENT YEAR : 2003-04 20. THE ISSUE RAISED IN GROUND NOS. 1 & 2 OF THIS APPE AL IS SIMILAR TO THE ONE RAISED IN GROUND NOS. 1 & 2 OF THE APPEAL DECIDED B Y US FOR THE ASSESSMENT YEAR 2001-02 BEING ITA NO. 5210/MUM/05. FOLLOWING OUR D ECISION RENDERED IN A.Y. 2001-02 WE REVERSE THE IMPUGNED ORDER OF THE LEARNE D CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE FO R DEPRECIATION ON FIXED ASSETS PURCHASED FROM M/S. PIRAMAL HOLDINGS LTD., GROUND NOS.1 & 2 OF THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2002-03 ARE ACCORDIN GLY ALLOWED. ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 14 21. THE ISSUE RAISED IN GROUND NO. 4 OF THIS APPEA L IS SIMILAR TO THE ONE RAISED IN GROUND NO. 4 OF THE APPEAL OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 2001-02 BEING ITA NO. 5210/M/05. FOLLOWING OUR DECISION RE NDERED IN A.Y. 2001-02, WE HOLD THAT THE LEASE PREMIUM PAID BY THE ASSESSEE FO R THE USE OF PREMISES WAS REASONABLE AND THERE BEING NO CASE MADE OUT BY THE AUTHORITIES BELOW TO SHOW THAT THE SAME WAS EXCESSIVE OR UNREASONABLE AS COMP ARED TO THE PREVAILING MARKET RATE, WE FIND NO JUSTIFIABLE REASON TO SUSTA IN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT (A) ON THIS ISSUE. THE SAME IS, THEREFORE, DELETED ALLOWING GROUND NO. 4 OF THE ASS ESSEES APPEAL. 22. GROUND NO. 3 RAISED BY THE ASSESSEE IN THIS AP PEAL IS IN RESPECT OF DISALLOWANCE MADE BY THE ASSESSING OFFICER ON ACCOU NT OF ASSESSEES CLAIM FOR RENT OF RS. 20,54,297/- PAID FOR PREMISES HAS NOT BEEN A DJUDICATED UPON BY THE LEARNED CIT(A) VIDE HIS IMPUGNED ORDER DESPITE THE FACT THA T THE SAME WAS SPECIFICALLY RAISED IN GROUND NO. 4 BY THE ASSESSEE IN ITS APPEA L. WE, THEREFORE, REMIT THIS MATTER TO THE LEARNED CIT(A) WITH A DIRECTION TO DE CIDE THE SAME ON MERIT. GROUND NO. 3 IS ACCORDINGLY TREATED AS ALLOWED FOR STATIST ICAL PURPOSES. ITA NO. 691/MUM/09 : ASST.YEAR :2005-06 23. THE ISSUE RAISED IN GROUND NOS. 1 & 2 OF TH IS APPEAL IS SIMILAR TO THE ONE RAISED IN GROUND NOS. 1 & 2 OF THE APPEAL DECIDED B Y US FOR THE ASSESSMENT YEAR 2001-02 BEING ITA NO. 5210/MUM/05. FOLLOWING OUR D ECISION RENDERED IN A.Y. 2001-02 WE REVERSE THE IMPUGNED ORDER OF THE LEARNE D CIT(A) ON THIS ISSUE AND DIRECT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE FO R DEPRECIATION ON FIXED ASSETS PURCHASED FROM M/S. PIRAMAL HOLDINGS LTD., GROUND NOS.1 & 2 OF THE ASSESSEES APPEAL FOR THE ASSESSMENT YEAR 2002-03 ARE ACCORDIN GLY ALLOWED. 24. THE ISSUE RAISED IN GROUND NO. 3 OF THIS APPEAL IS SIMILAR TO THE ONE RAISED IN GROUND NO. 4 OF THE APPEAL OF THE ASSESSEE FOR T HE ASSESSMENT YEAR 2001-02 BEING ITA NO. 5210/M/05. FOLLOWING OUR DECISION RE NDERED IN A.Y. 2001-02, WE ITA NOS.5210/M/05,1060/M/07, 2002/M/08 & 691/M/09 M/S.FRESCA FINE DINING P.LTD. 15 HOLD THAT THE LEASE PREMIUM PAID BY THE ASSESSEE FO R THE USE OF PREMISES WAS REASONABLE AND THERE BEING NO CASE MADE OUT BY THE AUTHORITIES BELOW TO SHOW THAT THE SAME WAS EXCESSIVE OR UNREASONABLE AS COMP ARED TO THE PREVAILING MARKET RATE, WE FIND NO JUSTIFIABLE REASON TO SUSTA IN THE DISALLOWANCE MADE BY THE ASSESSING OFFICER AND CONFIRMED BY THE LEARNED CIT (A) ON THIS ISSUE. THE SAME IS, THEREFORE, DELETED ALLOWING GROUND NO. 3 OF THE ASS ESSEES APPEAL. 25. IN THE RESULT, ALL THE FOUR APPEALS ARE ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON THIS 11 TH DAY OF MARCH, 2011. SD. SD. (R.V. EASWAR) (P.M. JAGTAP) PRESIDENT ACCOUNTANT MEMBER MUMBAI DATED THE 11 TH MARCH, 2011. KN COPY TO: 1. THE ASSESSEE 2. THE DCIT CIRCLE 5(1), MUMBAI 3. THE CIT, MC V, MUMBAI 4. THE CIT(A)-V, MUMBAI 5. THE DR F BENCH, MUMBAI BY ORDER /TRUE COPY/ ASST. REGISTRAR, ITAT, MUMBAI