HARESH D. GANDHI (HUF), MUMBAI V. ITO WD 13(3)(2), MUMBAI

ITA 1966/MUM/2011

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88404 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-02-2015
• Appeal Filed By: Assessee
• Bench Allotted: J
• Next Hearing Date: 10-02-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 10-03-2011
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH
• Assessee Lawyers: SANJAY R PARIKH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER ./I.T.A. NO.1966/M/2011 ( / ASSESSMENT YEAR: 2007 - 2008 ) MR. HARESH D. GANDHI (HUF), 358/360, NARSHI NATYHA STREET, KATHA BAZAR, MUMBAI - 09. / VS. ITO - WARD 13(3)(2), MUMBAI. ./ PAN : AABHH8753G ( / APPELLANT) .. ( / RESPONDENT ) / APPELLANT BY : MR. SANJAY R. PARIKH / RESPONDENT BY : SHRI HARI GOVIND SINGH, DR / DATE OF HEARING : 11.2.2015 / DATE OF PRONOUNCEMENT : 11.2.2015 / O R D E R PER D. KARUNAKARA RAO, AM: THIS APPEAL FILED BY THE ASSESSEE ON 10.3.2011 IS AGAINST THE ORDER OF THE CIT (A) - 24, MUMBAI DATED 31.12.2010 FOR THE ASSESSMENT YEAR 2007 - 2008. 2. THE ONLY ISSUE RAISED IN THIS APPEAL RELATES TO THE TAXABILITY OF THE ENTIRE RENTAL ADVANCE FOR THE PERIOD MORE THAN 12 MONTHS IS TAXABLE IN YEAR UNDER THE YEAR UNDER CONSIDERATION OR NOT. RELEVANT FACTS IN THIS REGARD ARE THAT THE ASSESSEE RECEIVED THE R ENTAL ADVANCE OF RS. 27.50 LAKHS AND THE SAME WAS OFFERED TO TAX IN THE RETURN OF INCOME. IN THE ASSESSMENT ASSESSING OFFICER NOTICED THAT THE SAID RENTAL ADVANCE RELATES TO THE PERIOD MORE THAN 12 MONTHS AND THEREFORE, HE RESTRICTED THE RENTAL INCOME ONL Y TO RS. 1,65,000/ - . THE CASE OF THE ASSESSEE IS THAT HE OFFER THE SAME ON RECEIPT BASIS CONSISTENTLY OTHERWISE THE MATCHING PRINCIPLE OF ACCOUNTANCY GETS DISTURBED AND RELIED ON THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF TAPARIA TOOLS LTD VS. JCIT, 260 ITR 102 (BOM). ALTERNATIVELY, ASSESSEE ALSO SUBMITTED THAT THE CORRECT FIGURES OF RENT RELATING TO THE AY UNDER CONSIDERATION WORKS OUT TO RS. 11 LAKHS AND NOT RS. 1,65,000/ - AS ASSESSED BY THE ASSESSING OFFICER. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, CIT (A) CONFIRMED THE 2 ASSESSING OFFICERS DECISION IN PRINCIPLE AND DIRECTED HIM TO ADOPT THE CORRECT FIGURE AFTER VERIFICATION OF THE CLAIM OF THE ASSESSEE. 3. BEFORE US, LD COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE THE LOWER AUTHORITIES. 4. ON THE OTHER HAND, LD DR SUPPORTED THE VIEW OF THE ASSESSING OFFICER AND THE CIT (A) AND BROUGHT OUR ATTENTION TO THE PROVISIONS OF SECTION 22 WHICH DEALS WITH THE INCOME FROM HOUSE PROPERTY AND MENTIONED THAT THE AN NUAL VALUE OF THE PROPERTY REFERS TO THE VALUE FOR 12 MONTHS ONLY AND NOT THE ENTIRE RENTAL ADVANCE RECEIVED FOR THE PERIOD EXCEEDING 12 MONTHS. REGARDING THE WORKING OF RS. 1,65,000/ - VS. RS. 11 LAKHS AS CLAIMED BY THE ASSESSEE, IT IS THE SUBMISSION OF BO TH THE PARTIES THAT NOW THE CORRECT FIGURE IS REQUIRED TO BE ADOPTED AS PER THE DIRECTIONS OF THE CIT (A). 5. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE CIT (A) S ORDER, WE FIND IN PRINCIPLE THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE CONSIDERING THE PROVISIONS OF SECTION 22 OF THE ACT. REGARDING ADOPTING CORRECT FIGURE OF RENTAL ADVANCE RELATING TO THE AY UNDER CONSIDERATION, IT IS A MATTER OF VERIFICATION AND WE CONFIRM THE DIRECTION GIVEN BY THE CIT (A). IT IS ALSO NOTICED THAT THE JUDGMENT OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF TAPARIA TOOLS LTD (SUPRA) WAS DELIVERED IN A DIFFERENT CONTEXT I.E., THE ALLOWABILITY OF DEDUCTION U/S 36(1)(III) OF THE ACT AND CERTAINLY NOT IN THE CONTEXT OF INVOKING OF THE PROVISIONS OF SECTION 22 OF THE ACT. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE ARE DISMISSED. 6. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUN CED IN THE OPEN COURT ON 1 1 T H FEBRUARY, 2015. S D / - S D / - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; 1 1 .2.2015 . . ./ OKK , SR. PS 3 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE . //TRUE COPY// / BY ORDER, / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI