M/S. SHARP DISTRIBUTORS PVT. LTD, MUMBAI V. THE ITO WD NO. 8(3)(1), MUMBAI

ITA 2184/MUM/2008

• Counselvise Citation: 218419914 RSA 2008
• Duration Of Justice: 3 year(s) 4 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 11-08-2011
• Assessment Year: 1996-1997
• Appeal Filed On: 01-04-2008
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KUSUM INGLE
• Assessee Lawyers: N K BHUTA
• Keywords: Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI BEFORE SHRI R.S.SYAL, AM AND SMT.ASHA VIJAYARAGHAVAN, JM ITA NO.2184/MUM/2008 : ASST.YEAR 1996-1997 M/S.SHARP DISTRIBUTORS PRIVATE LIMITED KALPATRU, 71 NUTAN LAXMI SOCIETY JVPD SCHEME VILE PARLE (WEST) MUMBAI 400 049. PAN : AABCS9686E. VS. THE INCOME TAX OFFICER WARD 8(3)(1) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI N.K.BHUTA RESPONDENT BY : SMT.KUSUM INGLE DATE OF HEARING : 11.08.2011 DATE OF PRONOUNCEMENT :17.08.2011 O R D E R PER R.S.SYAL, AM : THIS APPEAL FILED BY THE AS SESSEE IS DIRECTED AGAINS T THE ORDER PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 01.02.2008 IN RELATION TO THE ASSESSMENT YEAR 1996-1997. 2. THE ONLY ISSUE RAISED IN THIS APPEAL IS AGAINST THE INCRE ASE IN THE RENTAL INCOME PARTLY SUSTAINED BY THE LEARNED CI T(A) AT RS.1,60,000 TOWARDS INTEREST AT THE RATE OF 8% ON SECU RITY DEPOSIT. 3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. WE FIND THAT THE QUESTION RAISED IN THIS APPEAL HAS BEEN RECENTLY ANSWERED BY FULL BENCH OF THE HONBLE DELHI HIGH COURT IN CIT VS. MONI KUMAR SUBBA [(2011) 333 ITR 38 (DELHI) (FB)] HOLDING THAT NO ADDITION CAN BE MADE TO ANNUAL LETTING VALUE FOR NOTIONAL INTEREST U/S.23(1 )(A). IN THE CONTEXT OF SECTION 23(1)(B) THE HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. J.K.INVESTORS (BOMBAY) LTD. [(200 1) 248 ITR 723 (BOM.)] HAS HELD THAT IN CASE OF INTEREST FREE ITA NO.2184/MUM/2008 M/S.SHARP DISTRIBUTORS PRIVATE LIMITED. 2 DEPOSIT FROM LANDLORD, THE ALV CANNOT INCL UDE HYPOTHETICAL INTEREST. IN VIEW OF THE FOREGOING DISCUSSION, WE HOLD THAT THE LEARNED CIT(A) WAS NOT JUSTIFIED IN PARTLY UPHOLDING THE ACTION OF THE ASSESSING OFFICE R IN INCLUDING THE NOTIONAL INTEREST WHILE DETERMINING THE ANNUAL LETTING VALUE OF THE PROPERT Y. THE IMPUGNED ORDERS ARE OVERTURNED PRO TANTO . 4. IN THE RESULT, THE APPEAL IS ALLOWED. ORDER PRONOUNCED IN TH E OPEN COURT ON THIS 17 TH DAY OF AUGUST, 2011. SD/- SD/- (ASHA VIJAYARAGHAVAN) (R.S.SYAL) JUDICIAL MEMBER ACC OUNTANT MEMBER MUMBAI : 17 TH AUGUST, 2011. DEVDAS*` COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) - XXIX, MUMBAI. 5. THE DR/ITAT, MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.