ACIT CEN CIR 20, MUMBAI V. EVEREST KANTO INVESTMENT & FINANCE LTD, MUMBAI

ITA 197/MUM/2011

• Counselvise Citation: 19719914 RSA 2011
• Duration Of Justice: 3 year(s) 1 month(s) 4 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-02-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Next Hearing Date: 13-02-2014
• Assessment Year: 2007-2008
• Appeal Filed On: 10-01-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK SURI
• Assessee Lawyers: GO VIND AGGARWAL
• Section: 143(3)

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI . . , , , BEFORE SHRI B.R. B ASKARAN , ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA , JUDICIAL MEMBER . / ITA NO. 197 / MUM./ 2011 ( / ASSESSMENT YEAR : 20 0 7 08 ) ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 20 , AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .. / APPELLANT V/S M/S. EVEREST KANTO I NVESTMENT & FINANCE LTD. , 501, RAHEJA CHAMBERS FREE PRESS JOURNAL MARG NARIMAN POINT, MUMBAI 400 021 .... / RESPONDENT . / PERMANENT ACCOUNT NUMBER AAACE4794L / REVENUE BY : MR. ASHO K SURI / ASSESSEE BY : MR. GOVIND AGGARWAL / DATE OF HEARING 1 3 . 0 2 .201 4 / DATE OF ORDER 14.02.2014 / ORDER , / PER AMIT SHUKLA , J.M. THE PRESENT APP EAL HAS BEEN PREFERRED BY THE REVENUE CHALLENGING THE IMPUGNED ORDER DATED 26 TH OCTOBER 2010 , PASSED BY THE COMMISSIONER (APPEALS) XXXIX , MUMBAI, FOR THE QUANTUM OF ASSESSMENT PASSED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 M/S. EVEREST KANTO INVESTMENT & FINANCE LTD. 2 (FOR SHORT 'THE ACT' ) FO R THE ASSESSMENT YEAR 20 07 08 , VIDE WHICH, FOLLOWING GROUNDS HAVE BEEN RAISED: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) ERRED IN DIRECTING THE ASSESSING OFFICER TO TAKE THE FAIR RENTAL VALUE DETERMINED FOR A.Y. 2004 05 AS THE FAIR RENTAL VALUE FOR A.Y. 2007 08 AFTER THE FOLLOWING THE ORDER OF THE PREDECESSOR IN THE CASE OF ASSESSEE ITSELF FOR A.Y. 2001 02 TO 2006 07. HE SHOULD HAVE UPHELD ALV DETERMINED BY THE A.O. AND AT BEST HE COULD HAVE DIRECTED THE A.O. TO A DOPT ALV FOR A.Y. 2006 07 WHILE DETERMINING THE INCOME FROM HOUSE PROPERTY . 2 . FACTS IN BRIEF: THE ASSESSEE HAD SHOWN INCOME UNDER THE HEAD RENTAL INCOME DERIVED FROM FOUR IMMOVABLE PROPERTIES WHICH ARE SHOWN AS UNDER: 501, RAJEHA CENTRE, PLUS AN UNDER GROUND PARKING 502, RAJEHA CENTRE, PLUS ONE OPEN CAR PARKING 503, RAJEHA CENTRE, NARIMAN POINT 514, RAHEJA CENTRE, NARIMAN POINT 3 . THE ASSESSEE ENTERED INTO THREE SEPARATE AGREEMENTS WITH THREE DIFFERENT SISTER CONCERNS, THE DETAILS OF WHICH HAVE BEEN GIVEN AT PAGE 2 OF THE ASSESSMENT ORDER. THE ASSESSEE HAD SHOWN INCOME UNDER THE HEAD RENTAL INCOME FROM ITS RENTED PREMISES RIGHT FROM THE ASSESSMENT YEAR 2000 01 TO 2006 07, THE DETAILS OF WHICH HAS BEEN INCORPORATED IN PARA 3.3 OF THE ASSESSMENT ORDER . THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE HAD SHOWN SAME RENTAL INCOME FROM THE PREMISES FOR THE ASSESSMENT YEAR 2004 05 TO 2006 07 AND, THEREFORE, AS DON IN THE EARLIER YEARS, HE ENHANCED THE INCOME FROM HOUSE PROPERTY AFTER TAKING INTO CONSIDE RATION THE INTEREST COMPONENT ON THE SECURITY DEPOSITS RECEIVED BY THE ASSESSEE. THE LEARNED M/S. EVEREST KANTO INVESTMENT & FINANCE LTD. 3 COMMISSIONER (APPEALS) HELD THAT SIMILAR ISSUE WAS INVOLVED IN THE EARLIER YEAR ALSO I.E., 2006 07 WHEREIN THE LEARNED COMMISSIONER (APPEALS) UPHELD THE ASSESSING OFFICERS FINDING IN PRINCIPLE. ACCORDINGLY, HE HELD THAT IN THIS YEAR ALSO , THE ACTUAL RENT RECEIVABLE SHOULD BE AS PER THE INCOME ESTIMATED FOR THE ASSESSMENT YEAR 2004 05 AND DIRECTED THE ASSESSING OFFICER TO TAKE A FAIR RENTAL VALUE DETERMINED IN THE A SSESSMENT YEAR 2004 05 AS THE FAIR RENTAL VALUE FOR THE ASSESSMENT YEAR 2007 08. 4 . B EFORE US, IT HAS BEEN ADMITTED BY BOTH THE PARTIES THAT THIS ISSUE HAS COME UP FOR CONSIDERATION IN THE EARLIER YEARS IN ASSESSEES OWN CASE BEFORE THE TRIBUNAL WHEREIN THE TRIBUNAL HAS DELETED THE ENHANCEMENT OF RENT ON ACCOUNT OF INTEREST DEPOSIT AND HAS ACCEPTED THE RENT ACTUALLY RECEIVED BY THE ASSESSEE AS THE SAME WAS MORE THAN MUNICIPAL RATABLE VALUE. THE FINAL CONCLUSION OF THE TRIBUNAL IS AS UNDER: 15. IN OUR OPINI ON, THE ISSUE INVOLVED INT EH PRESENT CASE THUS IS SQUARELY COVERED BY THE DECISION OF CO ORDINATE BENCH OF THIS TRIBUNAL IN THE CASE OF RECLAMATION REALTY INDIA PVT. LTD. (SUPRA) WHICH IN TURN HAS RELIED ON AND FOLLOWED THE JUDGMENTS OF HON'BLE APEX COURT AND JURISDICTIONAL HIGH COURT ON A SIMILAR ISSUE AND RESPECTFULLY FOLLOWING THE SAID JUDICIAL PRONOUNCEMENTS, WE REVERSE THE IMPUGNED ORDER OF THE LEARNED CIT(A) ON THIS ISSUE AND DIRECT THE A.O TO ADOPT THE RENT ACTUALLY RECEIVED BY THE ASSESSEE DURING A .Y. 2003 04 AND 2006 07 AS ANNUAL VALUE OF THE PROPERTY BEING MORE THAN THE MUNICIPAL RETABLE VALUE. THE ADDITIONS MADE BY THE A.O. AND CONFIRMED BY THE LEARNED CIT(A) ON THIS ISSUE ARE ACCORDINGLY DELETED ALLOWING GROUND NO.2 OF THE ASSESSEES APPEAL FOR A.Y. 2003 04 TO 2006 07. 5 . IN VIEW OF THE AFORESAID DECISION OF THE TRIBUNAL, WE DO NOT FIND ANY MERIT IN THE GROUNDS RAISED BY THE REVENUE BECAUSE THE LEARNED COMMISSIONER (APPEALS), IN FACT, GAVE FINDING IN FAVOUR OF THE REVENUE THAT INTEREST ON SECURITY SHOULD ALSO F ORM PART OF THE FAIR RENTAL VALUE WHICH, IN FACT, HAS NOT BEEN UPHELD BY THE TRIBUNAL. SINCE THE ASSESSEE M/S. EVEREST KANTO INVESTMENT & FINANCE LTD. 4 IS NOT IN APPEAL, THEREFORE, THE DIRECTION OF THE LEARNED COMMISSIONER (APPEALS) TO THE EXTENT THE ASSESSING OFFICER SHOULD TAKE THE FAI R RENTAL VALUE AS DETERMINED FOR THE ASSESSMENT YEAR 2004 05 AS FAIR RENTAL VALUE FOR THE ASSESSMENT YEAR 2007 08 , IS NOT DISTURBED AND IS ACCORDINGLY UPHELD. THUS, THE GROUND RAISED BY THE REVENUE IS DISMISSED. 6 . 6. IN THE RESULT, REVENUES APPEAL IS DISMISSED. 14 TH FEBRUARY 2014 ORDER PRONOUNCED IN THE OPEN COURT ON 14 TH FEBRUARY 2014 SD / - . . B.R. B ASKARAN ACCOUNTANT MEMBER SD / - AMIT SHUKLA JUDICIAL MEMBER MUMBAI, DATED : 14 TH FEBRUARY 2014 / COPY OF THE ORDER FORWARDED TO : ( 1 ) / THE ASSESSEE ; ( 2 ) / THE REVENUE; ( 3 ) ( ) / THE CIT(A ) ; ( 4 ) / THE CIT, MUMBAI CITY CONCERNED ; ( 5 ) , , / THE DR, ITAT, MUMBAI ; ( 6 ) / GUARD FILE . / TRUE COPY / BY ORDER . / PRADEEP J. CHOWDHURY / SR. PRIVATE SECRETARY / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI