ACIT, New Delhi V. Shri Moni Kumar Subba, New Delhi

ITA 171/DEL/2011

• Counselvise Citation: [2011] 135 COUNSELVISE.COM (IT) 0056 (ITAT-DELHI)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-03-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 17-03-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 12-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PEEYUSH SONKAR
• Keywords: Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI RAJPAL YADAV, JUDICIAL MEMBER AND SHRI B.C.MEENA, ACCOUNTANT MEMBER I.T.A NO. 171/DEL/11 ASSTT. YEAR 2007-08 ACIT, CENTRAL CIRCLE-4, ROOM NO. 318, IIIRD FLOOR, ARA CENTRE, JHANDEWALAN EXTN., NEW DELHI. VS. SHRI MONI KUMAR SUBBA, SUBBA FARM HOUSE, 118, VILLAGE SULTANPUR, MEHRAULI GURGAON ROAD, NEW DELHI. AASPS1484J (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI PEEYUSH SONKAR, SR. DR RESPONDENT BY: SHRI R.S. SINGHVI, CA ORDER PER RAJPAL YADAV, JM: THE REVENUE IS IN APPEAL BEFORE US AGAINST THE ORD ER OF LD. CIT(A) DATED 29.10.2010 PASSED FOR ASSTT. YEAR 2007-08. TH E GROUNDS OF APPEAL TAKEN BY THE REVENUE ARE NOT IN CONSONANCE WITH RUL E 8 OF ITAT RULES. THEY ARE DESCRIPTIVE AND ARGUMENTATIVE IN NATURE. T HE REVENUE HAS TAKEN SIX GROUNDS OF APPEAL WHEREAS THE DISPUTE IN THEIR APPEAL REVOLVES AROUND ONLY ONE ISSUE I.E. WHETHER NOTIONAL INTERES T INCOME ON INTEREST FREE DEPOSITS RECEIVED BY THE ASSESSEE IS TO BE INC LUDED IN THE ANNUAL ITA NO. 171/DEL/11 ASSTT. YEAR 2007-08 2 LETTING VALUE OF THE HOUSE PROPERTY FOR THE PURPOSE OF DETERMINING RENTAL INCOME. THE FACTS ARE NOT IN DISPUTE. ACCORDING TO THE LD. AO, ASSESSEE HAD RECEIVED RS. 10.78 CRORE AS SECURITY MONEY FROM THE SISTER CONCERN NAMELY M/S. SUBA MICRO SYSTEM LTD. IT HAS LET OUT T HE PROPERTY TO THE SISTER CONCERN. THIS FACT IS ASCERTAINABLE FROM F.Y . 2000-01. ACCORDING TO THE AO, THE INTEREST COMPUTED ON NOTIONAL BASIS ON THESE INTEREST FREE SECURITY DEPOSITS IS TO BE ASSESSED AS PART OF ALV . 2. ON APPEAL, LD. CIT(A) HAS HELD THAT IN ASSTT. YE ARS 2001-02 TO 2005-06, A SIMILAR TREATMENT WAS MADE BY THE AO. TH E ADDITION WAS DELETED ON FURTHER APPEAL AND THE ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. SHE FURTHER FOUND THAT IN T HOSE YEARS TRIBUNAL HAS RELIED UPON THE DECISION OF HONBLE SUPREME COU RT IN THE CASE OF DEWAN DAULAT RAM KAPOOR VS. NDMC, 122 ITR 700 AND O THER DECISIONS. LD. CIT(A) HAS RECORDED THE FOLLOWING FI NDING :- I HAVE CAREFULLY CONSIDERED THE SUBMISSION OF THE AUTHORISED REPRESENTATIVE AND THE FACTS OF THE CASE. IT IS SEE N THAT THE IDENTICAL ISSUE WAS INVOLVED IN EARLIER YEARS AND FACTS OF THE CASE AS WELL AS GROUNDS OF APPEALS AND SUBMISSION OF THE APPELLANT ARE IDENTIC AL AS WERE INVOLVED IN EARLIER ASSESSMENT YEARS 2001-02, 2002-03, 2003-04, 2004-05 AND 2005-06. IT MAY BE NOTED THAT THE HONBLE ITAT HAS DECIDED T HE ISSUE IN FAVOUR OF THE APPELLANT IN ASSESSMENT YEARS 2001-02, 2002-03, 200 3-04, 2004-05 AND 2005-06. THE HONBLE ITAT HELD IN ASSESSMENT YEAR 2 001-02 IN THE APPELLANTS CASE AS UNDER :- 16. HENCE, IN THE EXISTING FACTS AND CIRCUMSTANCES FROM THE RATIO OF THE ABOVE DECISIONS (SUPRA), IT IS CLEAR THAT THE ADDIT ION OF NOTIONAL INCOME OF RS. 30,41,000/- ON ACCOUNT OF INTEREST FREE SECU RITY DEPOSIT RECEIVED BY THE ASSESSEE CANNOT BE CONSIDERED FOR DETERMININ G THE ANNUAL LETTING VALUE OF THE PROPERTY UNDER SECTION 23(1)(A ). THE ASSESSING ITA NO. 171/DEL/11 ASSTT. YEAR 2007-08 3 OFFICER HAS ALSO NOT DETERMINED THE ALV OF THE PROP ERTY NOR HAS BROUGHT ON RECORD ANY MATERIAL TO SHOW THAT THE REN T DECLARED BY THE ASSESSEE UNDER SECTION 23(1)(B) IS LESS THAN THE AL V DETERMINED BY THE MUNICIPAL CORPORATION. HENCE, THE IMPUGNED ADDI TION MADE BY THE ASSESSING OFFICER IS NOT SUSTAINABLE AND ACCORDINGL Y IN HIS WELL- REASONED AND WELL-DISCUSSED ORDER, LEARNED CIT(A) H AS RIGHTLY DELETED THE SAME AND ACCORDINGLY THE ORDER OF CIT(A) IN THI S REGARD IS UPHELD. GROUND OF APPEAL TAKEN BY THE REVENUE IS REJECTED. IN VIEW OF THE FACT THAT THE ISSUE INVOLVED STANDS COVERED IN FAVOUR OF THE APPELLANT BY THE DECISION OF THE HONBLE ITAT IN ASSESSMENT YEAR S 2001-02 TO 2005-06. THEREFORE, RESPECTFULLY FOLLOWING THE DECISION OF T HE ITAT, THE ADDITION OF NOTIONAL INTEREST IN ALV ON ACCOUNT OF INTEREST FREE SECURIT Y DEPOSITS MADE BY THE AO IS DELETED AND THE AO IS DIRECTED TO ADOPT THE SAME AN NUAL VALUE AS SHOWN BY THE APPELLANT. 3. LD. COUNSEL FOR THE ASSESSEE PLACED ON RECORD CO PIES OF THE TRIBUNALS ORDER IN ABOVE ASSTT. YEARS AND SUBMITTE D THAT ISSUE IN DISPUTE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE. LD. DR ON THE OTHER HAND WAS UNABLE TO CONTROVERT THE CONTENTION OF LD. COUN SEL FOR THE ASSESSEE. 4. ON DUE CONSIDERATION OF THE FACTS AND CIRCUMSTAN CES, WE DO NOT FIND ANY DISPARITY ON FACTS. LD. CIT(A) HAS FOLLOWE D THE ORDERS OF ITAT IN EARLIER ASSTT. YEARS. AFTER TAKING INTO CONSIDERAT ION THE FINDING OF LD. CIT(A) EXTRACTED SUPRA, WE DO NOT FIND ANY ERROR I N IT. THEREFORE, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH MARCH, 2011. SD/- [B.C. MEENA] [RAJPAL YADAV] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: 25.3.2011 VEENA ITA NO. 171/DEL/11 ASSTT. YEAR 2007-08 4 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, DEPUTY REGISTRAR, ITAT