PRAMILA ESTATES P. LTD, MUMBAI V. ITO WD 9(2)(4), MUMBAI

ITA 1337/MUM/2010

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 62184 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 1 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 14-03-2012
• Assessment Year: 2002-2003
• Appeal Filed On: 18-02-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: C SRINIVAS REDDY
• Assessee Lawyers: NITESH S JOSH I
• Keywords: Business income; Notional interest
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES C, MUMBAI BEFORE SHRI RAJENDRA SINGH, A.M. AND SHRI V.D. RAO , J.M. ITA NO. : 1337/M/2010 ASSESSMENT YEAR : 2002-03 PRAMILA ESTATES PRIVATE LIMITED HAPPY HOME, 244, WATERFIELD ROAD, BANDRA (W) MUMBAI-400 050. PAN NO: AAACP 2285 R INCOME TAX OFFICER WARD 9(2)(4) MUMBAI. (APPELLANT) VS. (RESPONDENT) APPELLANT BY : SHRI NITESH S. JOSHI RESPONDENT BY : SHRI C. SRINIVAS REDDY DATE OF HEARING : 21.3.12 DATE OF PRONOUNCEMENT : 11.4.12 O R D E R PER RAJENDRA SINGH (AM) THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER D ATED 2.12.2009 OF CIT(A) FOR THE ASSESSMENT YEAR 2002-03. T HE ASSESSEE IN THIS APPEAL HAS RAISED DISPUTES ON TWO DIFFERENT GR OUNDS WHICH RELATE TO ASSESSMENT OF HOUSE PROPERTY INCOME AND DISALLOW ANCE OF EXPENSES. 2. WE FIRST TAKE UP THE DISPUTE RELATING TO ASSESSMENT ASSE SSMENT OF HOUSE PROPERTY INCOME. THE FACTS IN BRIEF ARE THAT THE ASSESSEE COMPANY HAD LET OUT TWO OF ITS IMMOVABLE PROPERTIES I. E. UNIT NO.1 AND FLAT NO.12 ON THE GROUND FLOOR AND FIRST FLOOR OF TH E BUILDING NAMED ITA NO. 1337/M./10 ` A.Y.02-03 2 HARIKESH AT BANDRA (W) AS PER AGREEMENT DATED 31.7.1999 TO MS. RESHAM WADHWA, WIFE OF DIRECTOR OF THE ASSESSEE COMPANY FO R A MONTHLY SUM OF RS.50,000/- WHICH CONSISTED OF RS.30,000/- TOWARDS RENT AND RS.20,000/- TOWARDS SERVICE CHARGES. MS. RESHAM WADHWA HAD IN TURN LET OUT THE TWO PROPERTIES BY SEPARATE AG REEMENT DATED 22.11.1999 TO M/S. ANGEL SECURITIES LTD. FOR A SUM OF RS.2,28,000/- PER MONTH AS PER DETAILS GIVEN BELOW:- PREMISES RENT(RS.) SERVICE CHARGES( RS .) TOTAL(RS.) UNIT I 83,000 P.M. 60,000 P.M. 1,43,000 P.M. FLAT NO.12 45,000 P.M. 40,000 P.M. 85,000 P.M. TOTAL 2,28,000 P.M. 2.1 MS. RESHAM WADHWA HAD ALSO TAKEN INTEREST FREE DEPO SIT OF RS.27,52,000/- FROM THE COMPANY . THE AO THEREFORE O BSERVED THAT THE ASSESSEE HAD UNDER VALUED THE ANNUAL VALUE SHOWN AT RS .6.00 LACS PER ANNUM. THE AO ASKED ASSESSEE TO EXPLAIN AS TO WHY AN NUAL VALUE SHOULD NOT BE DETERMINED KEEPING IN MIND THE VALUE A T WHICH PROPERTIES HAD BEEN SUB-LET DURING THE SAME YEAR AND I NTEREST FREE DEPOSITS. ASSESSEE SUBMITTED THAT THE ANNUAL LETTING VALU E OF THE PROPERTIES COULD NOT EXCEED THE MUNICIPAL RATABLE VALU E (MRV) WHICH WAS FIXED AT RS.6,90,325/- FOR THE PERIOD 1.4.2001 TO 28.5.2001 AND RS.1,86,170/- FOR THE PERIOD 29.9.2001 TO 31.3.2002. IT WAS ALSO SUBMITTED THAT MS. RESHAM WADHWA HAD TERMINATED THE SUB -LEASE AGREEMENT WITH ANGEL SECURITES LTD. ON 22.8.2001 AND ASSESSEE HAD TERMINATED THE LEASE AGREEMENT WITH MS. RASHMI WADHWA W.E.F. 1.4.2002. 2.2 THE AO HOWEVER DID NOT ACCEPT THE CONTENTIONS RAISE D. IT WAS POINTED OUT BY HIM THAT IN ASSESSMENT YEAR 2001-02 THE SAME ISSUE ITA NO. 1337/M./10 ` A.Y.02-03 3 HAD ARISEN AND AO HAD REJECTED THE SUB-LEASE AGREEMENT BETWEEN MS. RESHAM WADHWA AND M/S. ANGEL SECURITIES LTD. AS NOT GENU INE. THE AO HAD COMPUTED THE ANNUAL VALUE OF THE PROPERTY AS R ENT RECEIVED FROM M/S. ANGEL SECURITIES LTD. FURTHER, CIT(A) AND I TAT HAD UPHELD THE ORDER OF AO TREATING THE SUB-LEASE AS NON GENUINE AND TAKING THE ANNUAL VALUE ON THE BASIS OF RENT RECEIVED FROM M/S. A NGEL SECURITIES LTD. AO ALSO OBSERVED THAT THE CLAIM OF THE ASSESSEE THAT MRV SHOULD BE TREATED AS ANNUAL VALUE WAS NOT ACCEPTABLE AS MRV W AS NOT BINDING ON THE AO. HE REFERRED TO THE JUDGMENT OF THE HON'BLE SUPREME COURT IN THE CASE OF SMT. PADMAVATI (AIR) 1962 SC 151 IN WH ICH IT WAS HELD THAT ORDINARILY A BARGAINING BETWEEN BUILDING LESSOR AND A BUILDING LESSEE UNINFLUENCED BY ANY EXTRANEOUS CIRCUMSTANCES MAY AFF ORD A GUIDING TEST OF REASONABLENESS. IT WAS ALSO HELD THAT A DEFLECTED RATE OF RENT BASED ON RELATIONSHIP OR SUCH OTHER CONSIDERATION MAY BE TAKEN OUT OF THE GROUND OF REASONABLENESS. AO, THEREFORE COM PUTED ANNUAL VALUE OF THE PROPERTY ON THE BASIS OF RENT RECEIVED FR OM M/S. ANGEL SECURITIES OF RS.27,36,000/- AND NOTIONAL INTEREST @ 12 % ON THE INTEREST FREE DEPOSIT WAS CALCULATED AT RS .2,38,320/-. THUS ANNUAL VALUE WAS TAKEN BY THE AO AT RS.29,74,320/-. 2.3 IN APPEAL CIT(A) OBSERVED THAT THOUGH THE SUB-LE ASE AGREEMENT WITH M/S. ANGEL SECURITIES LTD. WAS TERMINATED W.E.F. 22.8.2001, THE LEASE AGREEMENT BETWEEN THE ASSESSEE COMPANY AND MS. RESHAM WADHWA REMAINED IN FORCE THROUGHOUT THE CURRENT YEAR AND, THEREFORE, CIT(A) HELD THAT THE ANNUAL VALUE COMPUTED BY THE AO WHICH WAS ALSO SUPPORTED BY THE DECISION OF TRIBUNAL IN THE ASSESSMENT Y EAR 2001-02 WAS REASONABLE. ACCORDINGLY HE UPHELD THE ORDER OF THE AO AGGRIEVED BY WHICH THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL. ITA NO. 1337/M./10 `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` A.Y.02-03 5 ONLY AFTER THE SAID ASSESSMENT. THERE WAS, THEREFORE, D OUBLE TAXATION OF SAME INCOME TO THE EXTENT OF INCOME DECLARED BY MS. RESHAM WADHWA. 2.5 LD. DR ON THE OTHER HAND STRONGLY SUPPORTED THE O RDERS OF AUTHORITIES BELOW. IT WAS SUBMITTED THAT THE ASSESSEE HA D LET OUT THE PROPERTIES TO ITS DIRECTOR AT A VERY LOW RENT WHICH WA S CLEAR FROM THE FACT THAT THE SAME PROPERTY HAD BEEN LET OUT BY THE SA ME DIRECTOR AT A VERY HIGH RENT IN THE SAME YEAR AND, THEREFORE, ANNU AL VALUE OF PROPERTIES RETURNED BY THE ASSESSEE HAD BEEN RIGHTLY REJ ECTED. IT WAS ALSO ARGUED THAT ANNUAL VALUE UNDER SECTION 23(1)(A) H AS TO BE THE FAIR RENTAL VALUE AND IT HAS TO BE ASSESSED IN THE CORRECT NAME . MERELY BECAUSE PART OF THE INCOME WAS DECLARED BY SOME OTHER PER SON, COULD NOT BE A GROUND TO NOT ASSESS THE INCOME IN THE CORRECT NA ME. IT WAS ACCORDINGLY URGED THAT THE ORDER OF CIT(A) SHOULD BE UPHELD. 2.6 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL SUBMISSIONS CAREFULLY. THE DISPUTE IS IN RELATION TO ANNUA L VALUE OF THE HOUSE PROPERTY FOR THE PURPOSE OF TAXATION. THE ASSESSEE OWNED TWO IMMOVABLE PROPERTIES I.E. UNIT NO.1 AND FLAT NO.12 ON THE GROUND FLOOR AND 1 ST FLOOR OF THE BUILDING HARIKESH AT BANDRA. THE SAME HAD BEEN LET OUT TO THE WIFE OF THE DIRECTOR, MS. RESHAM WADHWA FOR MONTHLY RENT OF RS.50,000/- VIDE AGREEMENT DATED 31.7.1999. DURING THE SAME YEAR AFTER A FEW MONTHS, MS. RESHAM WADHWA VIDE AGREE MENT DATED 22.11.1999 LET OUT THE PREMISES TO M/S. ANGEL SECURITIE S FOR A MONTHLY CONSIDERATION OF RS.2.28 LACS. MS. RESHAM WADHWA HAD ALSO T AKEN INTEREST FREE DEPOSITS OF RS.27,52,000/- FROM THE SAID CO MPANY WHEREAS THE ASSESSEE HAD NOT TAKEN ANY DEPOSIT FROM MS. R ESHAM WADHWA. CONSIDERING THE BIG DIFFERENCE BETWEEN THE RENTAL VALUES FOR ITA NO. 1337/M./10 ` A.Y.02-03 6 WHICH THE PROPERTIES WERE SUB-LET BY MS. RESHAM WAHWA W ITHIN A PERIOD OF FEW MONTHS, THE AUTHORITIES BELOW HAVE TREA TED THE AGREEMENT WITH MS. RESHAM WADHWA AS A DEVICE TO REDUCE I NCOME IN CASE OF THE ASSESSEE. ACCORDINGLY, THE AGREEMENT HAS BEEN RE JECTED AS NOT GENUINE AND ANNUAL VALUE HAS BEEN TAKEN AS RS.2.28 LACS PER MOTH I.E., RS.27,36,000/-. IN ADDITION, A SUM OF RS.2,38,3 20/- HAS BEEN ADDED BEING NOTIONAL VALUE ON ACCOUNT OF INTEREST FRE E DEPOSIT CALCULATED @ 12%. THUS, TOTAL ALV OF THE PROPERTIES HA S BEEN DETERMINED BY THE AUTHORITIES BELOW AT RS.29,74,320/- . 2.7 WE FIND THAT THE SAME ISSUE I.E. DETERMINATION OF ANNUAL VALUE AND GENUINENESS OF AGREEMENT HAD COME UP FOR CONSIDERATI ON IN ASSESSMENT YEAR 2001-02 IN CASE OF THE ASSESSEE AND THE TRIBU NAL IN THE ORDER DATED 11.11.2008 IN ITA NO.4104/M/ 2004 N OTED THAT VERY LOW RENT OF RS.6.00 LACS PER ANNUM WAS QUITE ABNORMAL A ND UNPRACTICAL WHEN THE TOTAL RENT FROM THE PROPERTY RECE IVED BY MS. RESHAM WADHWA WAS AT RS.27,36,000/-. IN ADDITION, MS. RESHAM WADHWA, HAD ALSO TAKEN INTEREST FREE DEPOSIT. THE TRI BUNAL, THEREFORE, HELD THAT AGREEMENT WITH MS. RESHAM WADHWA, WAS A DEVI CE TO REDUCE TAX LIABILITY IN CASE OF THE ASSESSEE AND TO GIVE UNDUE BENEFIT TO MS. RESHAM WADHWA. THE TRIBUNAL, THEREFORE, UPHELD TH E ASSESSMENT OF ANNUAL VALUE BASED ON SUB-LETTING VALUE OF THE PRO PERTY. THE SAID DECISION OF THE TRIBUNAL HAS BECOME FINAL AS, ADMITTEDL Y, THE ASSESSEE HAD NOT FILED ANY APPEAL AGAINST THE SAID ORDER. 2.8 THE LD. AR HAS SOUGHT A RECONSIDERATION OF THE SAID DECISION OF THE TRIBUNAL AFTER REFERRING TO THE JUDGMENT OF THE HON'BLE HIGH COURT OF BOMBAY IN CASE OF M/S. SAHNEY KIRKWOOD PRIVATE LTD . VS. ASSTT. COMMISSIONER OF INCOME TAX IN INCOME TAX APPEAL NO.1501 OF 2007, ITA NO. 1337/M./10 ` A.Y.02-03 7 IN WHICH THE ASSESSEE HAD LET OUT THE PREMISES TO A GROUP CONCERN AT MONTHLY RENT OF RS.47,000/- THOUSAND PER MONTH. THER EAFTER, THE GROUP CONCERN HAD SUB-LET THE PREMISES TO THIRD PARTIES. THE DEPARTMENT HAD SOUGHT TO ASSESS THE ANNUAL VALUE ON THE BASIS OF RENT RECEIVED BY THE GROUP CONCERN FROM THE THIRD PARTIES TR EATING THE AGREEMENT WITH THE GROUP CONCERN AS NOT GENUINE. THE HON'BLE HIGH COURT OBSERVED THAT EXCEPT THE FACT THAT DIRECTORS OF T HE GROUP CONCERN WERE COMMON, THERE WAS NOTHING ON RECORD TO SHOW THAT T HE AGREEMENT WAS SHAM TRANSACTION. MOREOVER, IN THAT CASE THE GROUP CONCERN HAD LET OUT THE PROPERTY TO THIRD PARTIES NEXT YEAR AFTER A GAP OF ONE YEAR FROM THE DATE ON WHICH THE ASSESSEE HAD LET OUT THE PROPERTY TO THE GROUP CONCERN. IN THE PRESENT CASE THE SUB-LETTING HAD BEEN DONE WITHIN A FEW MONTHS WITHIN THE SAME YEAR AN D THERE IS HUGE DIFFERENCE BETWEEN THE RENTAL VALUE AS MENTIONED EARL IER. FURTHER, IN THIS CASE THE TRIBUNAL AFTER CONSIDERING THE CIRCUMSTANCES OF THE CASE HAS GIVEN A CLEAR FINDING THAT THE AGREEMENT WAS A DE VICE TO REDUCE THE TAXABLE INCOME OF THE ASSESSEE. THE CASE IS, THEREFOR E, DISTINGUISHABLE. MOREOVER, THIS BENCH HAS NO POWER TO R EVIEW THE DECISION OF THE CO-ORDINATE BENCH WHICH HAS BECOME FINAL. THE ASSESSEE COULD HAVE APPEALED TO HIGH COURT IN ASSESSMENT YEAR 2001- 02 WHICH HAS NOT BEEN DONE. THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2001-02 ON THE SAME FACTS, W E HAVE TO TREAT THE AGREEMENT AS NON-GENUINE AND UPHOLD THE ASSE SSMENT OF ANNUAL VALUE ON THE BASIS OF RENTAL INCOME RECEIVED BY MS. RESHAM WADHWA. 2.9 THE LD. AR HAS ALSO ARGUED THAT THERE WAS NO LOSS O F TAX REVENUE IN CASE THE AGREEMENT WAS TREATED AS GENUINE, BECAUSE IN THAT CASE RENTAL INCOME IN THE HANDS OF MS. RESHAM WADHWA HAS BEEN ASSESSED ITA NO. 1337/M./10 ` A.Y.02-03 8 AS INCOME FROM OTHER SOURCES, AND BENEFIT OF 30% DEDUCTI ON WHICH IS AVAILABLE IN CASE OF HOUSE PROPERTY INCOME IS NOT AVAILA BLE. THUS, OVERALL TAX PAYABLE WAS MORE WHEN THE AGREEMENT IS T REATED AS GENUINE COMPARED TO A CASE WHEN THE AGREEMENT IS TREATE D AS NON- GENUINE. THE ARGUMENT, HOWEVER, CANNOT BE ACCEPTED BE CAUSE THE INCOME HAS TO BE ASSESSED CORRECTLY IN THE NAME OF THE PERSO N IN WHICH IT IS ASSESSABLE. MOREOVER, SO FAR AS THIS YEAR IS CON CERNED, THE OVERALL TAX PAYABLE IS MUCH MORE IN CASE THE AGREEMENT IS TREATED AS NON-GENUINE BECAUSE IN THAT CASE THE ANNUAL VALUE SHALL BE RS.27,36,000/- IN CASE OF THE ASSESSEE AS THE AGREEMENT WIT H MS. RESHAM WADHWA WAS IN FORCE FOR THE WHOLE YEAR BUT IN CA SE THE AGREEMENT IS TREATED AS GENUINE, THE ANNUAL VALUE IN CASE OF ASSESSEE WILL ONLY BE RS.6.00 LACS AND RENTAL INCOME IN THE NAME OF MS. RESHAM WADHWA, CAN BE ASSESSED ONLY FOR A PART OF THE YEAR TILL 22.8.2001 WHEN THE SUB-LEASE AGREEMENT WITH M/S. ANGEL SECURITI ES WAS TERMINATED. THEREFORE, THE ARGUMENT THAT THREE WILL BE NO IMPACT ON OVERALL TAX PAYABLE IS NOT CORRECT. WE, THEREFORE, CON FIRM THE ASSESSMENT OF ANNUAL VALUE AT RS.27,36,000/-. AS REGARDS THE ASSESSABILITY OF ANNUAL VALUE IN RELATION TO INTEREST FR EE DEPOSITS, SUCH INTERESTS CAN NOT BE CONSIDERED AS PART OF RENT RECOVERABL E BUT CAN BE TAKEN INTO ACCOUNT WHILE DETERMINING THE ANNUAL VALUE . IN ASSESSMENT YEAR 2001-02 ALSO, THERE WAS INTEREST FREE DEPOSIT BUT THE ALV HAD BEEN ASSESSED AT RS.27,36,000/- BEING THE RENT RECEIVABLE BY MS. RESHAM WADHWA WHICH WAS UPHELD BY THE TRIBUNAL AFTER CO NSIDERING THE INTEREST FREE DEPOSITS. THEREFORE, FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSMENT YEAR 2001-02 (SUPRA), WE UPHOLD THE ASSESSMENT OF ANNUAL VALUE AT RS.27,36,000/- AND THE BAL ANCE ADDITION MADE BY THE AO TO THE ANNUAL VALUE IS DELET ED. ITA NO. 1337/M./10 ` A.Y.02-03 9 3. THE SECOND DISPUTE IS REGARDING DISALLOWANCE OF CERTAIN EXPENSES. ASSESSEE HAD DECLARED RENTAL INCOME AS BUSINESS IN COME AND HAD CLAIMED THE FOLLOWING EXPENSES ON ACCOUNT OF SALA RY, AUDIT FEE, PROFESSIONAL TAX ETC. WHILE COMPUTING THE TOTAL IN COME. BANK CHARGES : RS. 60.00 PRELIMINARY EXPENSES WRITTEN OFF : RS. 620.00 PROFESSIONAL TAX : RS. 2,500.00 SUNDRY EXPENSES : RS. 900.00 AUDIT FEES : RS. 1,837.00 SALARY : RS.1,22,500.00 3.1 THE AO HAD ASSESSED THE RENTAL INCOME AS HOUSE PROPE RTY INCOME AND DISALLOWED THE CLAIM OF EXPENSES MENTIONED AB OVE. THE ASSESSEE HAD RAISED THE GROUND BEFORE CIT(A) REGARDING D ISALLOWANCE OF ABOVE EXPENSES. THE CIT(A) HAS NOT PASSED ANY ORDER ON THIS ISSUE AGGRIEVED BY WHICH ASSESSEE IS IN APPEAL BEFORE THE TRIB UNAL. 3.2 BEFORE US, THE LD AR SUBMITTED THAT THE ASSESSEE HAD RETURNED RENTAL INCOME AS BUSINESS INCOME. IT WAS ALSO SUBMITTED TH AT EVEN IF THE RENTAL INCOME WAS ASSESSED AS HOUSE PROPERTY INCOME IN THE HANDS OF THE ASSESSEE, THE ASSESSEE BEING A COMPANY HAD TO INCUR CER TAIN EXPENSES FOR MAINTAINING ITS STATUS AS A COMPANY AND, THER EFORE, THESE EXPENSES SHOULD HAVE BEEN ALLOWED. THE LD. DR ON THE OTHER HAND SUBMITTED THAT THE ASSESSEE HAD ONLY RENTED INCOME PROPER TY WHICH HAD BEEN ASSESSED UNDER THE HEAD HOUSE PROPERTY INCOME. THE ASSESSEE HAS ALLOWED DELETION @ 30% OF ANNUAL VALUE WHICH WOULD COVER THE EXPENSES INCURRED. IT WAS ACCORDINGLY URGED TH AT NO SEPARATE CLAIM SHOULD BE ALLOWED. ITA NO. 1337/M./10 ` A.Y.02-03 10 3.3 WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE IS REGARDING ALLOW ABILITY OF CERTAIN EXPENSES RELATING TO SALARY ETC. DETAILS OF WHICH HAVE BE EN GIVEN IN PARA-3 EARLIER. THESE EXPENSES HAVE BEEN DISALLOWED BY THE AO ON THE GROUND THAT THESE WERE NOT ALLOWABLE WHILE COMPUTING THE INCOME FROM HOUSE PROPERTY WHICH WAS THE ONLY INCOME SHOWN BY T HE ASSESSEE. THE ASSESSEE HAD RAISED DISPUTES ON THIS ISSUE BEFORE CIT(A) WHO HAS NOT ADJUDICATED THE SAME. THE LD. AR HAS ARGUE D THAT THE ASSESSEE BEING A COMPANY, HAD TO INCUR CERTAIN EXPENSES FOR MAINTAINING ITS STATUS AS A COMPANY WHICH HAVE BEEN ALLOW ED AGAINST ANY OTHER INCOME. IN OUR VIEW THE ISSUE IS REQUIRED TO BE DEALT WITH AT THE LEVEL OF CIT(A) AS HE HAS NOT DISPOSED THE GROUND ON THIS ISSUE. WE, THEREFORE, RESTORE THIS ISSUE TO THE FILE OF CIT(A ) FOR ADJUDICATING THE SAME AFTER HEARING THE ASSESSEE. 4. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 11.4.2012. SD/- SD/- (V.D. RAO) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 11.4.2012. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.