V. NARAYANA IYER & SONS, MUMBAI V. ITO WD 12(1)(1), MUMBAI

ITA 1693/MUM/2015

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 3499 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: SMC
• Assessment Year: 2005-2006
• Appeal Filed On: 23-03-2015
• Court: TRIBUNAL
• Assessee Lawyers: ADITYA R AJGAONKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI B.R. BASKARAN (AM) I.T.A. NO. 1693 /MUM/ 20 15 (ASSESSMENT YEAR 200 5 - 0 6 ) M/S. V. NARAYANA IYER & SONS 304, SHAHID BHAGAT SINGH ROAD, FORT MUMBAI - 400 001. VS. ITO - WARD 12(1)(1) MUMBAI ( APPELLANT ) ( RESPONDENT ) PAN NO . AAAFV5132C ASSESSEE BY SHRI ADITYA R. AJGAONKAR DEPARTMENT BY SHRI MANOJ KUMAR DATE OF HEARING 27 . 6. 201 6 DATE OF PRONOUNCEMENT 27 . 6 . 201 6 O R D E R THE APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST T HE ORDER DATED 2 4 .1 2 .2014 PASSED BY LEARNED CIT(A) - 2 8 , MUMBAI AND IT RELATES TO A.Y. 200 5 - 0 6 . 2. THE ASSESSEE IS AGGRIEVED BY THE DECISION OF LEARNED CIT(A) IN CONFIRMING THE DISALLOWANCE OF ` 5 LAKHS CLAIMED AS PROVISION FOR LIABILITY . 3. L EARNED CO UNSEL APPEARING FOR THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS RUNNING A HOTEL IN THE NAME AND STYLE NATIONAL HINDU HOTEL IN A PREMISES BELONGING TO M/S. BOMBAY PORT TRUST. THE ASSESSEE HAD TAKEN POSSESSION OF THE PREMISES THROUGH A SUB - TENANCY AGREEMEN T. AGREEMENT OF THE ORIGINAL TENANT WITH M/S. BOMBAY PORT TRUST HAD EXPIRED LONG BACK IN 1985. HOWEVER THE ASSESSEE DID NOT VACATE THE PREMISES AND HENCE LEGAL DISPUTE WAS GOING ON BETWEEN THE ORIGINAL LESSEE AND BOMBAY PORT TRUST. IT IS STATED THAT THE AS SESSEE WAS ALSO IMPLEADED IN THE LITIGATION. IN A.Y. 2007 - 08, THE ASSESSEE HAD CREATED A PROVISION OF ` 10 LAKHS TOWARDS THE AMOUNT PAYABLE TO BOMBAY 2 PORT TRUST . THE SAID CLAIM WAS DISALLOWED BY THE AO WHILE COMPUTING INCOME FOR AY 2007 - 08. DURING THE YEAR UNDER CONSIDERATION ALSO THE ASSESSEE HAD CREATED PROVISION OF ` 5 LAKHS AND HENCE THE ASSESSING OFFICER DISALLOWED THE SAME ON IDENTICAL REASONING . 4. LEARNED COUNSEL SUBMITTED THAT THE ADDITION OF RS.10.00 LAKHS MADE IN AY 2007 - 08 WAS DISPUTED UPTO TH E LEVEL OF THE TRIBUNAL AND THE DIVISION BENCH OF THE TRIBUNAL HAS RESTORED THE MATTER TO THE FILE OF THE ASSESSING OFFICER WITH CERTAIN DIRECTIONS. HE FURTHER SUBMITTED THAT THE ASSESSING OFFICER HAS ALSO GIVEN EFFECT TO THE ORDER OF THE TRIBUNAL ON 28.8. 2014. ACCORDINGLY, LEARNED AR SUBMITTED THAT THE ORDER PASSED BY THE DIVISION BENCH OF THE TRIBUNAL IN 2007 - 08 MAY BE FOLLOWED IN THE CURRENT YEAR ALSO. 5. I HAVE HEARD LEARNED DEPARTMENTAL REPRESENTATIVE AND PERUSED THE RECORD. I NOTICED THAT THE DIVISIO N BENCH OF THE TRIBUNAL HAS DISPOSED OF THE IDENTICAL ISSUE IN ASSESSEES OWN CASE IN ITA NO. 522/MUM/2012 RELATING TO A.Y. 2007 - 08, VIDE ITS ORDER DATED 31.1.2014. F OR THE SAKE OF CONVENIENCE , I EXTRACT BELOW OPERATIVE PORTION OF THE ORDER OF THE DIVISION BENCH : - HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD WE NOTE THAT THE PROVISIONS OF RS. 10,00,000/ - MADE BY THE ASSESSEE TOWARDS THE LIABILITY TO BE PAID TO THE BPT FOR OCCUPATION OF THE PROPERTY IN QUESTION IS NOT BASED ON ANY REASONABLE BASIS. SINCE, THE DISPUTE WAS PENDING BEFORE THE COURT OF SMALL CAUSES AND AS PER THE ORDER DATED 16.10.2012 THE HON'BLE COURT OF SMALL CAUSES HAS DETERMINED THE ARREARS OF COMPENSATION UP T O 30.9.2012 AT RS. 25,72,413.91 TO BE DEPOSITED BY THE ASSESSEE IN THE INSTALLMENTS OF RS. 2,50,000/ - FURTHER THE ASSESSEE HAS BEEN DIRECTED TO DEPOSIT THE MONTH L Y COMPENSATION OF RS. 25,000/ - TOWARDS THE USE AND OCCUPATION OF THE SUIT PREMISES DURING THE PENDENCY OF THE APPEAL. THUS, THE MONT HLY COMPENSATION AS DIRECTED BY THE COURT OF SMALL CAUSES IS RS. 25000/ - WHICH CAN BE A REASONABLE BASIS FOR DETERMINING THE LIABILITY OF THE ASSESSEE TOWARDS USE AND OCCUPATION OF THE PREMISES TO BE PAID TO THE BPT. ACCORDINGLY, IN THE FACTS AND CIRCUMSTA NCES OF THE CASE WE SET ASIDE THIS ISSUE TO THE RECORD OF THE ASSESSING OFFICER TO DETERMINE THE LIABILITY OF THE ASSESSEE FOR USE AND OCCUPATION OF THE PREMISES BY CONSIDERING THE SAID ORDER DATED 16.10.2012 OF THE COURT OF SMALL CAUSES BOMBAY. NEEDLESS TO SAY TH E ASSESSEE BE GIVEN AN APPROPRIATE OPPORTUNITY OF HEARING BEFORE DECIDING THE ISSUE AFRESH . 3 6. CONSISTENT WITH THE VIEW TAKEN BY THE DIVISION BENCH REFERRED ABOVE, I SET ASIDE THIS MATTER TO THE FILE OF ASSESSING OFFICER WITH SIMILAR DIRECTION. ACCORDINGLY, THE ORDER PASSED BY LEARNED CIT(A) ON THIS ISSUE STANDS SET ASIDE. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS TREATED AS ALLOWED FOR STATISTICAL PURPOSES. ORDER HAS BEEN PRONOU NCED IN THE OPEN COURT ON 27 . 6 .2016 . SD/ - (B.R.BASKARAN ) ACCOUNTANT MEMBER MUMBAI ; DATED : 27 / 6/ 20 1 6 COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) 4. CIT 5. DR, ITAT, MUMBAI 6. G UARD FILE. BY ORDER, //TRUE COPY// ( DY./ASSTT. REGISTRAR) ITAT, MUMBAI PS