DCIT, Pune V. Shri Avinash Bhosale, Pune

ITA 1581/PUN/2012

• Counselvise Citation: 158124514 RSA 2012
• Duration Of Justice: 1 year(s) 5 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-12-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2006-2007
• Appeal Filed On: 26-07-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Keywords: Depreciation; Additional depreciation; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER AND SHRI R.K. PANDA, ACCOUNTANT MEMBER ITA NO. 1581/PN/2012 (ASSESSMENT YEAR 2006-07) DCIT, CIRCLE-3, PUNE .. APPELLANT VS. AVINASH BHOSALE, 21, JIJAI YESHWANT GHADGE NAGAR, GANESHKHIND ROAD, PUNE -7 .. RESPONDENT PAN NO. ABTPB8151F APPELLANT BY : SHRI S.P. WALIMBE RESPONDENT BY : SHRI NIKHIL PATHAK DATE OF HEARING : 23-12-2013 DATE OF PRONOUNCEMENT : 30-12-2013 ORDER PER R.K. PANDA, AM : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 30-03-2012 OF THE CIT(A)-II, PUNE RELATING TO ASSESSMENT YEAR 2006-07. 2. GROUNDS OF APPEAL NO. 1, 2, 12 AND 13 BY THE REV ENUE BEING GENERAL IN NATURE ARE DISMISSED. 3. GROUNDS OF APPEAL NO.3, 4, AND 5 BY THE REVENUE READ AS UNDER: 3. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN HOLDING THAT THE. ASSESSEE WAS ENTITLED TO ADDITIONAL DE PRECIATION U/S.32(1)(IIA) ON THE WIND-MILLS INSTEAD OF CONFIRMING THE DISALLOWANCE MADE BY THE ASSESSING OFFICER ON THIS SCORE. 4. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN ADMITTING THE ADDITIONAL EVIDENCE SUBMITTED BY THE A SSESSEE IN THE FORM OF LETTER DATED 28.03.2006 OF MAHARASHTRA STATE ELEC TRIC DISTRIBUTION COMPANY LTD., CIRCLE OFFICE SANGLI CONFIRMING THE C OMMISSIONING OF 7 NOS. OF WINDMILL ON 22.03.2006 WHEN THE ASSESSING OFFICER H AD CLEARLY BROUGHT OUT IN THE REMAND REPORT THAT ASSESSEE'S CASE DOE S NOT FALL IN THE PURVIEW OF RULE 46 A. 2 5. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN FAILING TO APPRECIATE THAT THE A.O HAD NOT REFUSED T O ADMIT THE ADDITIONAL EVIDENCE IN THE COURSE OF ASSESSMENT PROCEEDINGS NOR THE ASSESSEE WAS PREVENTED BY SUFFICIENT CAUSE FROM PRODUCING THE EVID ENCE NOR WAS THE ASSESSEE DEPRIVED OF SUFFICIENT OPPORTUNITY OF SUBMITTIN G THE EVIDENCE OF COMMISSIONING OF WINDMILL IN THE COURSE OF ASSESSMENT PROC EEDINGS. 3.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE ASSES SEE IS AN INDIVIDUAL AND IS CARRYING OUT ACTIVITY OF CIVIL CONSTRUCTION UNDER THE NAME AND STYLE OF (1) AMIT CONSTRUCTIONS AND (2) SWAPNALI CO NSTRUCTIONS. HE IS ALSO THE PROPRIETOR OF AVINASH BHOSALE WIND FARMS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSING OFFI CER NOTED FROM THE DEPRECIATION CHART APPENDED WITH THE RETURN OF INCOME THAT THE ASSESSEE HAS CLAIMED DEPRECIATION ON WIND MILLS AMO UNTING TO RS.13,54,50,000/- AT 100% FOR THE YEAR. ON BEING Q UESTIONED BY THE ASSESSING OFFICER TO JUSTIFY THE CLAIM OF SUCH DEDU CTION, THE ASSESSEE VIDE LETTER DATED 30-12-2010 SUBMITTED THAT IT HAS ALSO CLAIMED ADDITIONAL DEPRECIATION ON WIND MILLS. THE ASSESSI NG OFFICER NOTED FROM THE DETAILS FURNISHED BY THE ASSESSEE THAT THE ASSESSEE HAS NOT FILED ANY DETAILS ETC. IN RESPECT OF COMMISSIONING OF THE WIND MILL. ACCORDING TO HIM THE CONDITION FOR ALLOWING DEPRECI ATION IS THAT THE ASSETS SHOULD HAVE BEEN PUT TO USE. IN ABSENCE OF THE SAME THE ASSESSING OFFICER HELD THAT THE DEPRECIATION CLAIME D AT 100% IS NOT AT ALL ALLOWABLE AS PER PROVISIONS OF SECTION 32. HE ACCORDINGLY CALCULATED DEPRECIATION @80% AT RS.10,83,60,000/- A ND DISALLOWED THE BALANCE AMOUNT OF RS.2,70,90,000/-. 3.2 BEFORE THE CIT(A) IT WAS SUBMITTED THAT THE ASS ESSEE HAS INSTALLED WIND MILLS AMOUNTING TO RS.27,09,00,000/- AND CLAIMED 100% DEPRECIATION. HOWEVER, SINCE THE WIND MILLS W ERE INSTALLED AND BECAME OPERATIONAL ONLY IN THE SECOND HALF OF THE Y EAR IT HAS CLAIMED 3 50% OF THE TOTAL DEPRECIATION AMOUNTING TO RS.13,54 ,50,000/-. IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS DISALLOWED ONLY ADDITIONAL DEPRECIATION AMOUNTING TO RS.2,70,90,000/- AND ALLO WED THE BALANCE DEPRECIATION OF RS.10,83,60,000/-. IT WAS SUBMITTE D THAT THE INSTALLATION OF THE WIND MILL WAS COMPLETE AND THE ASSETS HAVE BEEN PUT TO USE AND THE ASSESSEE HAS CORRECTLY CLAIMED N ORMAL DEPRECIATION AND ADDITIONAL DEPRECIATION AMOUNTING TO RS.13,54,5 0,000/-. THE NORMAL DEPRECIATION @80% WAS RS.10,83,60,000/- AND ADDITIONAL DEPRECIATION AT 20% RS.2,70,90,000/- BOTH TOTALLING TO RS.13,54,50,000/-. THE ASSESSEE FILED AN APPLICATI ON UNDER RULE46A OF THE I.T. RULES FOR ADMISSION OF ADDITIONAL EVIDE NCES IN THE SHAPE OF A COPY OF LETTER FROM THE MAHARASHTRA STATE ELECTRI CITY DISTRIBUTION COMPANY LTD. CONFIRMING THE COMMISSIONING OF 7 NOS. OF WIND MILLS ON 22-03-2006. IT WAS SUBMITTED THAT THE ASSESSING OFFICER HAS DISALLOWED ONLY CLAIM FOR ADDITIONAL DEPRECIATION A ND ALLOWED NORMAL DEPRECIATION. 3.3 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE AND THE REQUEST FOR ADMISSION OF ADDITIONAL EVIDENCE THE LD .CIT(A) CALLED FOR A REMAND REPORT FROM THE ASSESSING OFFICER WHO VIDE HIS LETTER DATED 12-03-2012 OBJECTED TO THE ADMISSION OF SUCH ADDITI ONAL EVIDENCE ON THE GROUND THAT THE ASSESSEE WAS GIVEN AMPLE OPPORT UNITY OF BEING HEARD AND THE CASE OF THE ASSESSEE IS NOT COVERED B Y ANY OF THE CONDITIONS MENTIONED IN RULE 46A. THE ASSESSING OF FICER HOWEVER WITHOUT PREJUDICE TO THE ABOVE SUBMITTED THAT IF TH E ADDITIONAL EVIDENCE IS ADMITTED THEN THE CLAIM OF THE ASSESSEE IN RESPECT OF ADDITIONAL DEPRECIATION ON WIND MILL HAVE TO BE ALL OWED. 4 3.4 BASED ON THE ARGUMENTS ADVANCED BY THE ASSESSEE AND THE REMAND REPORT GIVEN BY THE ASSESSING OFFICER AND TH E REPLY TO THE REMAND REPORT FILED BY THE ASSESSEE THE LD.CIT(A) A LLOWED THE CLAIM OF ADDITIONAL DEPRECIATION AFTER ADMITTING THE ADDI TIONAL EVIDENCE FILED BY THE ASSESSEE. 3.5 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 4. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE ASSESSING OFFICER AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. THE CO MMISSIONING OF 7 WIND MILLS BY THE ASSESSEE ON 22-03-2006 IS NOT IN DISPUTE. WE FIND THE ASSESSING OFFICER IN THE ASSESSMENT ORDER HAS A LLOWED THE DEPRECIATION HIMSELF AND THE ONLY DISPUTE IS THEREF ORE REGARDING THE ALLOWABILITY OF ADDITIONAL DEPRECIATION U/S.32(1)(I IA) OF THE I.T. ACT. WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y . 2007-08 VIDE ITA NO.823/PN/2011 ORDER DATED 27-08-2012 HAS HELD THAT THE CIT(A) HAS RIGHTLY ALLOWED THE CLAIM OF ADDITIONAL DEPRECIATION U/S.32(1)(IIA) OF THE I.T. ACT ON THE WIND MILLS. SINCE THE ASSESSING OFFICER IN THE INSTANT CASE HAS ALLOWED DEPRECIATIO N WHICH INTURN CAN BE ALLOWED ONLY WHEN THE ASSETS ARE PUT TO USE BY T HE ASSESSEE, THEREFORE, WE FIND NO REASON AS TO WHY THE ADDITION AL DEPRECIATION ON WIND MILLS CANNOT BE ALLOWED. SINCE THE LD.CIT(A) HAS ALLOWED THE CLAIM OF ADDITIONAL DEPRECIATION ON THE WIND MILLS AND SINCE THE ASSESSING OFFICER HAS NOT BROUGHT OUT ANY MATERIAL ON RECORD TO DENY THE ALLOWANCE OF ADDITIONAL DEPRECIATION WHEN HE HI MSELF HAS ALLOWED NORMAL DEPRECIATION AND SINCE THE LD. DEPARTMENTAL REPRESENTATIVE 5 ALSO COULD NOT POINT OUT ANY DISTINGUISHABLE FEATUR ES SO AS TO TAKE A DIFFERENT VIEW THAN THE VIEW ALREADY TAKEN BY THE T RIBUNAL IN ASSESSEES OWN CASE, THEREFORE, WE FIND NO INFIRMIT Y IN THE ORDER OF THE CIT(A) IN ALLOWING THE CLAIM OF ADDITIONAL DEPRECIA TION. THE GROUNDS RAISED BY THE REVENUE ARE ACCORDINGLY DISMISSED. 4.1 SO FAR AS THE GROUND RAISED BY THE REVENUE THAT THE CIT(A) HAS ERRED IN ADMITTING THE ADDITIONAL EVIDENCE THE LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THE SUBMISSION OF THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSING OFFICER HAS NEV ER ASKED FOR SUCH DETAILS. FURTHER, THE LD.CIT(A) IN THE INSTANT CAS E HAS GIVEN ADEQUATE OPPORTUNITY TO THE ASSESSING OFFICER BY CALLING FOR A REMAND REPORT FROM HIM. MOREOVER, THE AO HIMSELF HAS ALLOWED NOR MAL DEPRECIATION. WITHOUT COMMISSIONING OF THE WIND MI LLS AND WITHOUT PUT TO USE OF THE SAME HE COULD NOT HAVE ALLOWED DE PRECIATION. UNDER THESE CIRCUMSTANCES, WE FIND NO INFIRMITY IN THE OR DER OF THE CIT(A) IN ADMITTING THE ADDITIONAL EVIDENCE. ACCORDINGLY, TH E GROUNDS RAISED BY THE REVENUE ON THIS ISSUE ARE ALSO DISMISSED. 5. GROUNDS OF APPEAL NO. 6 TO 9 BY THE REVENUE READ AS UNDER : 6. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN DELETING THE ADDITION MADE BY THE ASSESSING OF FICER UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' WITHOUT APPREC IATING THAT THE INFORMATION COLLECTED BY THE ASSESSING OFFICER REGA RDING THE MARKET RENT PREVAILING IN THE WALKESHWAR NAGAR AREA IN MUMBAI CLEARLY ESTABLISHED THAT THE RENT SHOWN BY THE ASSESSEE WA S FAR LESS THAN THE REASONABLE RENT WHICH A SIMILAR PROPERTY WOU LD FETCH AND, THEREFORE, THE ASSESSING OFFICER WAS PERFECTLY JUSTIFIED IN ADOPTING ANNUAL VALUE OF THE PROPERTY AS PER THE MARKET RENT. 7. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROS SLY ERRED IN HOLDING THAT THE ANNUAL RATEABLE VALUE ADO PTED BY THE MUNICIPAL AUTHORITIES SHOULD BE THE DETERMINING FAC TOR FOR APPLYING THE PROVISION OF SEC. 23(1)(A) OF THE INCOME-TAX ACT , 1961; AND THAT WHEN THE RENT RECEIVED BY THE ASSESSEE IS MORE THAN THE ANNUAL RATEABLE VALUE, THE ACTUAL RENT RECEIVED SHOULD BE T AKEN AS THE ANNUAL VALUE U/S. 23(1 )(B). 6 8. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN FAILING TO APPRECIATE THAT THERE IS NOTHING IN SE CTION 23(1)(A) WHICH INDICATES THAT ANNUAL VALUE THEREUNDER SHOULD BE THE MUNICIPAL RATEABLE VALUE; AND, ON THE CONTRARY, THIS PROVISION CLEARLY SHOWS THAT ANNUAL VALUE IS NOT DISTINGUISHABLE FROM MARKET VALUE. 9. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN DISCARDING THE INFORMATION USED BY THE ASSESSING OFFIC ER AND MERELY BY RELYING ON THE DECISION TAKEN IN A.Y 2007- 08 AND THE DECISION TAKEN BY HON. LTAT IN THE ASSESSEE'S OWN CASE FOR A.Y.2005- 06 DELETED THE ADDITION MADE BY THE ASSESSING OFFICER UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' WITHOUT APPRECIATING TH AT THE SAID INFORMATION PROVIDED CLEAR INDICATION OF THE REASONA BLE RENT IN THE AREA IN WHICH THE ASSESSEE'S PROPERTY IS LOCATED. 5.1 FACTS OF THE CASE, IN BRIEF ARE THAT THE AO DUR ING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS DECLARED NET INCOME OF RS.80,500/- FROM ONE HOUSE PROPERTY SITUA TED AT 601, SANKALP, 16 WALKESHWAR, MUMBAI AFTER DEDUCTION OF R S.34,500/- FROM TOTAL RENT RECEIPTS OF RS.1,15,000/-. THE AO ASKED THE ASSESSEE TO GIVE FULL DETAILS OF PROPERTY, I.E. TOTAL ARE OF FLAT, N AME OF THE TENANT AND COPY OF THE RENT AGREEMENT, IF ANY ETC. IT WAS SUB MITTED THAT DISALLOWANCE UNDER THIS HEAD HAS BEEN MADE BY THE A O IN A.YRS. 2007-08 AND 2008-09 FOR WHICH THE ASSESSEE HAS FILE D APPEAL BEFORE THE CIT(A) AND THE ISSUE IS PENDING. IT WAS FURTHE R SUBMITTED THAT THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 HA S DECIDED THE ISSUE IN ITS FAVOUR. IT WAS ACCORDINGLY REQUESTED TO KEEP THE MATTER IN ABEYANCE. HOWEVER, THE AO DID NOT ACCEPT SUCH REQU EST. HE NOTED FROM THE DETAILS THAT THE FLAT WAS 1169 SQ.FT. IN A REA AND WAS LET OUT ON RENT TO AN ASSOCIATE CONCERN M/S. AVINASH CONSTRUCT ION. HE WAS OF THE OPINION THAT ASSESSEE HAS SHOWN VERY LOW RENTAL INCOME AND THEREFORE THE ANNUAL VALUE OF THE PROPERTY WAS REQU IRED TO BE DETERMINED U/S.23(1)(A) OF THE ACT. THE AO VISITED THE WEBSITE WWW.REALESTATEMUMBAI.COM ACCORDING TO WHICH RENT IN WALKESHWAR AREA IN MUMBAI FOR 1 BHK FLAT WAS RS.45,000/- TO RS .80,000/-, FOR 2 7 BHK FLAT RENT WAS RS.80,000/- TO RS.2 LAKH PER MONT H AND FOR 3BHK FLAT RENT WAS RS.2,50,000/- TO 3,00,000/- PER MONTH . APPLYING THE PROVISIONS OF SECTION 23(1)(A) THE AO DETERMINED TH E ANNUAL VALUE OF THE FLAT AT RS.30 LAKH PER ANNUM, I.E. RS.2,50,000/ - PER MONTH. AFTER ALLOWING STATUTORY DEDUCTION U/S.24 AND DEDUCTING T HE INCOME DECLARED FROM THE HOUSE PROPERTY AT RS.50,500/- THE AO MADE ADDITION OF RS.20,19,500/-. 5.2 IN APPEAL THE LD.CIT(A) FOLLOWING THE ORDER OF HIS PREDECESSOR FOR A.Y. 2007-08 DELETED THE ADDITION SO MADE BY TH E AO. 5.3 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 6. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND IDENTICAL ISSUE HAD COME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2007-0 8. WE FIND THE TRIBUNAL VIDE ITA NO.823/PN/2011 ORDER DATED 27-08- 2012 HAS DECIDED THE ISSUE AND DISMISSED THE GROUNDS RAISED BY THE REVENUE ON THIS ISSUE BY HOLDING AS UNDER : 4. WE HAVE HEARD THE PARTIES. WE FIND THAT IDENTIC AL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN ASSESSEES OWN CASE F OR THE A.Y. 2005-06 IN THE APPEAL FILED BY THE REVENUE BEING I TA NO. 1524/PN/2008, ORDER DATED 24 TH SEPTEMBER 2010. THE OPERATIVE PART OF THE ORDER OF THE TRIBUNAL READS AS UNDER : 21. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSE D THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS PAPER BOOK FILED BEFORE US AND COPIES OF THE DECISIONS FILED BEFORE US. UNDISPUTEDLY, THIS IS THE CASE, WHERE THE PROPERTY IS LET TO THE SISTER CONCERN FOR RENT AND THEREFORE, CLAUSE (B) O F SECTION 23(1) APPLY TO THE CASE. AO HAS NOT MADE OUT A CASE THAT THE CASE FALL IN THE EXEMPTED CASES OF MAHARASHTRA RENT CONTROL AC T, 1999. THE PROVISIONS OF CLAUSE (B) OF SECTION 23 ARE AS UNDER : 8 23(1) ANNUAL VALUE HOW DETERMINED SUBSECTION (1) FOR THE PURPOSE OF SECTION 22, THE A NNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE, (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR; OR (B) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS IN EXCESS OF THE SUM REFERRED TO IN CLAUS E (A), THE AMOUNT SO RECEIVED OR RECEIVABLE. CLAUSE (B) REFERS TO A PROPERTY, WHICH ARE LET, ANN UAL VALUE OF A PROPERTY DETERMINED UNDER SECTION 23 SHALL BE ADOPT ED FOR COMPUTING THE INCOME FROM PROPERTY IN TERMS OF SECT ION 22. THE ANNUAL VALUE DETERMINATION SHALL BE STRICTLY IN ACC ORDANCE WITH THE PROVISIONS CONTAINED IN SECTION 23 AS UPHELD BY THE CO- ORDINATE BENCH IN THE CASE OF DELITE ENTERPRISES (P ) LTD V. ITO [2008] 22 SOT 245(MUM). ACCORDINGLY, WHERE THE REN T CONTROL ACT IS APPLICABLE ONLY THE STANDARD RENT IS TO BE T AKEN AS THE ANNUAL LETTING VALUE. IN THE ABSENCE OF STANDARD R ENT THE MUNICIPAL RATABLE VALUE IS TO BE TAKEN. WHERE THE MUNICIPAL RATABLE VALUE OF RENT IS LESS THAN ACTUAL RENT, THE ACTUAL RENT SHALL BE FAIR RENTAL VALUE FOR COMPUTING INCOME FROM HOUS E PROPERTY. HOWEVER, IT IS THE DECISION OF THE CO-ORDINATE BENC H IN THE CASE OF MAKRUPA CHEMICALS (P) LTD [2007] 108 ITD 95/12 SOT 68(MUM) THAT THE STANDARD RENT IS THE UPPER LIMIT FOR DETERMINING THE ANNUAL VALUE. THE ABOVE SYNOPSIS GOES WELL WITH TH E DECISIONS OF THE APEX COURT IN THE CASE OF DEWAN DAULAT RAJ KAPOO R (SUPRA) AND ALSO APEX COURT JUDGMENT IN THE CASE OF DR BALBI R SINGH AND OTHERS (SUPRA) FOR THE PROPOSITION THAT THE RATABLE VALUE DETERMINED BY THE MUNICIPAL AUTHORITY IS BINDING UN LESS THE STANDARD RENT IS HIGHER. II. IN THE LIGHT OF THE ABOVE LEGAL POSITION WE HAV E EXAMINED THE FACTS OF THE INSTANT CASE. THE ASSESSEE HAS LET OUT SPACE TO THE SISTER CONCERN, WHICH IS UNDISPUTED FACT AND IS REC EIVING RS. 10,000/- PER MONTH FROM EACH SISTER CONCERN. THERE FORE, THE ASSESSEES PROPERTY IS COVERED BY PROVISIONS OF CLA USE (B) OF SECTION 23(1). THIS IS A FACT THAT ASSESSEES ACTU ALLY RENT RECEIVED OR RECEIVABLE IN RESPECT OF THE SAID PROPERTY IS NO T IN EXCESS OF THE ALV COMPUTED UNDER CLAUSE (A) OF SECTION 23(1). I N THE LIGHT OF THESE FACTS, AOS DECISION TO INVOKE A COMPARABLE C ASE TO THE PROPERTY COVERED UNDER CLAUSE (B) IS NOT IN TUNE W ITH THE ABOVE REFERRED LEGAL POSITION. FURTHER, IT IS NOT ALSO T HE CASE OF THE AO THAT ASSESSEE IS COVERED BY THE EXEMPTIONS PROVIDED IN THE MAHARASHTRA RENT CONTROL ACT AND, THEREFORE, ALV OF THE PROPERTY SHALL BE DETERMINED ON THE BASIS OF THE CO MPARABLE CASES. IN ANY CASE, THE STANDARD RENT IS UPPER LIMIT FOR DETERMINATION THE ALV HAS HELD IN THE CASE OF MAKRUPA CHEMICALS PVT LTD (SUPRA). THEREFORE, WE ARE OF TH E OPINION THAT THE ORDER OF THE CIT(A) DOES NOT CALL FOR ANY INTER FERENCE. 22. THUS, IT IS NOT THE CASE OF THE REVENUE THAT TH E ALV DETERMINED BY THE ASSESSEE IS LESS THAN THE STANDAR D RENT. CONSIDERING THE ABOVE FACTUAL AND LEGAL POSITION IS FORCE, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT(A) DOE S NOT CALL FOR ANY INTERFERENCE FOR THE ABOVE REASONS. ACCORD INGLY, GROUND 1 OF THE REVENUE IS DISMISSED. 5. AS THE FACTS ARE IDENTICAL IN THIS YEAR, WE HAVE NO REASON TO TAKE DIFFERENT VIEW ON THE ISSUE ON THE ALV TO BE DETERMI NED U/S. 23(1)(A) OF THE ACT. WE FIND NO INFIRMITY IN THE ORDER OF T HE CIT(A) ON THIS 9 ISSUE. ACCORDINGLY, THE SAME IS CONFIRMED. IN THE RESUL T, GROUND NOS. 3 TO 6 ARE DISMISSED. 6.1 NOTHING CONTRARY WAS BROUGHT TO OUR NOTICE TO T AKE A DIFFERENT VIEW THAN THE VIEW ALREADY TAKEN BY THE TRIBUNAL ON THIS ISSUE WHICH HAS BEEN FOLLOWED BY THE LD.CIT(A). WE, THEREFORE, UPHOLD THE ORDER OF THE CIT(A) ON THIS ISSUE AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 7. GROUNDS OF APPEAL NO. 10 AND 11 BY THE REVENUE R EAD AS UNDER: 10. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN RESTRICTING THE DISALLOWANCE MADE BY T HE ASSESSING OFFICER ON ACCOUNT OF THE ASSESSEE'S CLAIM TOWARDS EXPENSES IN RESPECT OF HELICOPTER ONLY TO 1/7 TH OF SUCH CLAIM, AS HAD BEEN PLEADED BY THE ASSESSEE, WITHOUT IN ANY MANNER APPRECIATING THAT FROM THE PERUSAL OF THE LOG BOOK, USE OF HELICOPTER COULD NOT BE SPECIFICALLY DETERMINED IN R ESPECT OF BUSINESS PURPOSES ONLY, AND THE ASSESSEE BY CONSENTING TO A DISALLOWANCE, EVEN IF TO 1/7 TH OF HIS CLAIM, HAD ADMITTED THIS FACT. 11. THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS) GROSSLY ERRED IN FAILING TO APPRECIATE THAT THE ASSESSEE HAD PLEADED FOR RESTRICTING THE DISALLOWANCE OF HIS CLAIM TO 1/7 TH OF THE TOTAL CLAIM ONLY BY MAKING REFERENCE TO PAST ASSE SSMENT ORDERS AND THE DECISION OF HON. ITAT FOR A.Y 2005-06 AND NOT ON THE BASIS OF ANY FACTS OR EVIDENCES PERTAINING TO TH E USER OF THE HELICOPTER DURING THE RELEVANT PREVIOUS YEAR. 7.1 FACTS OF THE CASE, IN BRIEF, ARE THAT THE AO DU RING THE COURSE OF ASSESSMENT PROCEEDINGS NOTED THAT THE ASSESSEE HAS DEBITED HELICOPTER CHARGES OF RS.21,93,745/-. THE AO ASKED THE ASSESS EE TO PROVIDE THE LOG BOOK MAINTAINED AND OTHER DETAILS IN RESPECT OF USE OF HELICOPTER TO ASCERTAIN THE ADMISSIBILITY OF BUSINESS EXPENDIT URE. THE ASSESSEE SUBMITTED A COPY OF LOG BOOK AND OTHER DETAILS AS C ALLED FOR. IT WAS FURTHER SUBMITTED THAT DISALLOWANCE UNDER THIS HEAD HAS BEEN MADE FOR A.Y. 2007-08 AND 2008-09 @20% OF THE EXPENSES DEBIT ED TO PROFIT AND LOSS ACCOUNT AND ASSESSEE HAS NOT PREFERRED ANY APPEAL FOR THE SAME. THE AO AFTER VERIFICATION OF THE LOG BOOK MA INTAINED BY THE 10 ASSESSEE HELD THAT PERSONAL ELEMENT OF SUCH EXPENDI TURE CANNOT BE RULED OUT. HE, THEREFORE, HELD THAT AN AMOUNT OF R S.4,38,749/- BEING 1/5 TH OF THE EXPENDITURE HAS TO BE DISALLOWED BEING PERS ONAL IN NATURE. 7.2 IN APPEAL THE LD.CIT(A) FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 DIRECTED TH E AO TO RESTRICT SUCH DISALLOWANCE TO 1/7 TH OF THE EXPENSES. 7.3 AGGRIEVED WITH SUCH ORDER OF THE CIT(A) THE REV ENUE IS IN APPEAL BEFORE US. 8. WE HAVE CONSIDERED THE RIVAL ARGUMENTS MADE BY B OTH THE SIDES, PERUSED THE ORDERS OF THE AO AND THE CIT(A) AND THE PAPER BOOK FILED ON BEHALF OF THE ASSESSEE. WE FIND THE TRIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 VIDE ITA NO.1425/PN/2008 ORDER DAT ED 24-09-2010 HAS DIRECTED THE AO TO DISALLOW 1/7 TH OF THE HELICOPTER EXPENSES. SINCE THE LD.CIT(A) HAS FOLLOWED THE ORDER OF THE T RIBUNAL IN ASSESSEES OWN CASE FOR A.Y. 2005-06 AND DIRECTED T HE AO TO DISALLOW 1/7 TH OF THE EXPENSES AS AGAINST 1/5 TH ADOPTED BY THE AO AND IN ABSENCE OF ANY CONTRARY MATERIAL BROUGHT TO OUR NOT ICE WE FIND NO INFIRMITY IN THE ORDER OF THE CIT(A) ON THIS ISSUE. THE ORDER OF THE CIT(A) ON THIS ISSUE IS ACCORDINGLY UPHELD AND THE GROUNDS RAISED BY THE REVENUE ARE DISMISSED. 9. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S DISMISSED. PRONOUNCED IN THE OPEN COURT ON 30-12-2013. SD/- SD/- (R.S. PADVEKAR) (R.K. PANDA) JUDICIAL MEMBER ACCOUNTANT MEMBER PUNE, DATED : 30 TH DECEMBER, 2013 SATISH 11 COPY OF THE ORDER IS FORWARDED TO : 1. THE ASSESSEE 2. THE DEPARTMENT 3. THE CIT(A)-II, PUNE 4. THE CIT-II, PUNE 5. DR B BENCH, PUNE 6. GUARD FILE BY ORDER // TRUE COPY // SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, PUNE