SETH PROPERTIES, MUMBAI V. ITO 12(1)(3), MUMBAI

ITA 2991/MUM/2013

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9750 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Next Hearing Date: 29-07-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-04-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN DR
• Keywords: Business income; Rule of consistency; Question of law; Capital receipt
• Section: 260A; 115JB

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER ITA NOS.2991 & 2992/MUM/2013 ASSESSMENT YEARS: 2007-08 & 2008-09 M/S SETH PROPERTIES, ROOM NO.208, EMCA HOUSE, 02 ND FLOOR, 289 SHAHID BHAGAT SINGH, ROAD, FORT, MUMBAI-400001 / VS. INCOME TAX OFFICER-12(1)(3), ROOM NO.134, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 ( ! ' /ASSESSEE) ( # / REVENUE) P.A. NO.ABIFS2476F ! ' / ASSESSEE BY SHRI SALIL KAPOOR, SHRI GIRISH S. PIKALE, MS. SOUMYA SINGH # / REVENUE BY SHRI V. JUSTIN -DR $ # % ' & / DATE OF HEARING : 13/09/2017 % ' & / DATE OF PRONOUNCEMENT 04/10/2017 ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 2 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) BOTH THESE APPEAL ARE BY THE ASSESSEE FOR ASSESSMEN T YEAR 2007-08 AND 2008-09 CHALLENGING THE IMPUGNED O RDERS BOTH DATED 01/01/2013 OF THE FIRST APPELLATE AUTHOR ITY, MUMBAI. 2. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSE E, SHRI SALIL KAPOOR ALONG WITH GIRISH S. PIKALE AND M S. SAUMYA SINGH, DID NOT PRESS GROUND NO. 1 TO 1.3 OF THE GROUND RAISED. THE LD. DR SHRI V. JUSTIN, HAD NO OB JECTION TO THE PRAYER OF THE ASSESSEE, THEREFORE, GROUNDS N O.1 TO 1.3 ARE DISMISSED AS NOT PRESSED. 3. THE ONLY GROUND AGITATED BY THE LD. COUNSEL FOR THE ASSESSEE, IS WITH RESPECT TO CONFIRMATION OF TH E AMOUNT OF ` 78,33,360/- (ASSESSMENT YEAR 2007-08) AND ` 49,86,226/- (ASSESSMENT YEAR 2008-09) RECEIVED IN R ESPECT OF UNIT L/40 IN POSSESSION OF M/S HEMKUND CHEMICALS PVT. LTD. IT WAS CLAIMED THAT THE IMPUGNED ISSUE IS COVE RED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF NARANG OVERSEAS PVT. LTD. VS ACIT (111 ITD 1)(MUM. TRIB.)(SB)(PAGES 23-53 OF ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 3 THE PAPER BOOK); ITA NO.4623/MUM/2005, ORDER DATED 20/02/2008 AND ANOTHER DECISION OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASE OF M/S GOODWILL THEATERS P VT. LTD. (ITA NO.8185/MUM/2011) DATED 09/06/2013, WHICH WAS AFFIRMED BY HON'BLE JURISDICTIONAL HIGH COURT IN IT A NO.2356 OF 2013, ORDER DATED 06/06/2016. THIS ASSERTION OF THE LD. COUNSEL FOR THE ASSESSEE WAS NOT CONTROVERTED BY TH E LD. DR. 3.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT FOR ASSESSMENT YEAR 2007-08, THE ASSESSEE DECLARED TOTAL INCOME OF ` 1,75,879/- ON 27/03/2008, SHOWING INCOME FROM HOUSE PROPERTY OUT OF OTHER UNI TS APART FROM L/40. THE RENTAL INCOME OF ` 78,33,360/- IN RESPECT OF UNIT L/40 IN THE POSSESSION OF M/S HEMKU ND WAS CONSIDERED AS COMPENSATION AND CLAIMED EXEMPT. THIS INCOME WAS RECEIVED BY THE ASSESSEE, CONSEQUENT TO ORDER PASSED BY ADDL. RENT CONTROL TRIBUNAL, NEW DELHI. T HE SAID PREMISES WAS IN POSSESSION OF M/S HEMKUND, WHICH WA S SUBSEQUENTLY PARTED/SUB-LETED TO BANK OF PUNJAB. T HE AMOUNT SO DETERMINED BY ADDL. RENT CONTROL TRIBUNAL , NEW DELHI WAS IN RESPECT OF THE PREMISES IN THE POSSESS ION OF ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 4 M/S HEMKUND CHEMICALS PVT. LTD.(HCPL) AND BANK OF I NDIA (BOP). AS PER THE REVENUE, IT WAS NOTHING BUT ARRE ARS OF RENTAL INCOME. THUS, IT WAS HELD TO BE/DEEMED TO B E INCOME CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERT Y. THE LD. ASSESSING OFFICER NOTED THAT THE ASSESSEE DID N OT FURNISH THE COPY OF RENT DEED, LEASE DEED, DOCUMENTS, AGREE MENT, CONFIRMATION, ETC IN RESPECT OF ALL THE UNITS SITUA TED CANNAUGHT CIRCLE, NEW DELHI. THUS THE RECEIPT OF ` 78,33,360/- WAS TREATED AS RENT FROM THE SAID PREMI SES AND ACCORDINGLY TREATED AS INCOME FROM HOUSE PROPER TY AND WAS BROUGHT TO TAX. 3.2. ON APPEAL, BEFORE THE LD. COMMISSIONER OF INCOME TAX (APPEAL), THE SUBMISSIONS OF THE ASSESSE E WERE CONSIDERED AND THE FIRST APPELLATE AUTHORITY DISCUS SED THE DECISION FROM HON'BLE MADAS HIGH COURT IN CIT VS P. MARIAPPA GOUNDER (1983) 147 ITR 676 (MAD.), HON'BLE APEX COURT IN P. MARIAPPAA GOUNDER VS CIT (1998) 232 ITR 2(SC), HON'BLE DELHI HIGH COURT IN CIT VS OBEROI SONS (MAC HINED LTD.(APPEAL NOS.166,168,243 AND 778 OF 2006 DATED 31/08/2012 AND ALSO THE DECISION IN NARANG OVERSEAS PVT. LTD. OF THE TRIBUNAL AND THEREAFTER HELD THAT THE A MOUNT SO ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 5 RECEIVED IS TAXABLE AS REVENUE RECEIPT AND DECIDED AGAINST THE ASSESSEE. THE ASSESSEE IS IN FURTHER APPEAL BEF ORE THIS TRIBUNAL. 3.3. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE AD VERTING FURTHER, WE ARE USEFULLY REPRODUCING HEREUNDER THE RELEVANT PORTION FROM THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF NARANG OVERSEAS PVT. LTD., 111 ITD 1 (MUM.)(SB) FOR READY REFERENCE:- THE SUPREME COURT IN THE CASE OF P MARIAPPA GOUNDER WAS ONLY CONCERNED WITH ONE ISSUE RELATING TO THE Y EAR OF TAXABILITY OF MESNE PROFIT, I.E., WHETHER IT WAS TA XABLE IN ASST. YR. 1963-64 OR ASST. YR. 1964-65. THE ISSUE W HETHER MESNE PROFIT CONSTITUTED REVENUE RECEIPT OR CAPITAL RECEIPT WAS NOT BEFORE THE COURT AS IS APPARENT FROM THE QU ESTION POSED BY THE COURT FOR ADJUDICATION, THE CONTENTION S RAISED BY THE RESPECTIVE PARTIES AS WELL AS THE OPERATIONA L PART OF THE JUDGMENT. IT CANNOT BE SAID THAT THE APEX COURT GAVE ANY DECISION REGARDING THE NATURE OF THE RECEIPT BY WAY OF MESNE PROFIT. THE DECISION OF THE MADRAS HIGH COURT REGARDING THE NATURE OF RECEIPT REMAINED UNAFFECTED BY THE JUDGMENT OF THE APEX COURT. ACCORDINGLY, THE CONTEN TION OF REVENUE THAT THE ISSUE REGARDING THE NATURE OF MESN E PROFITS IS COVERED BY THE DECISION OF THE SUPREME C OURT CANNOT BE ACCEPTED. (PARAS 16 & 23) THE ONLY ISSUE WHICH ARISES FROM THE APPEAL OF THE ASSESSEE AND REQUIRES ADJUDICATION IS WHETHER THE MESNE PROF ITS RECEIVED BY THE ASSESSEE IS REVENUE RECEIPT OR CAPI TAL RECEIPT INASMUCH AS THE FINDING OF THE CIT(A) THAT AMOUNT OF RS. 34,57,01,137 RECEIVED BY THE ASSESSEE AMOUNT S TO MESNE PROFITS HAS NOT BEEN CHALLENGED BY THE DEPART MENT EITHER BY FILING CROSS-APPEALS OR CROSS-OBJECTION. HOWEVER, IN THE COURSE OF HEARING, THE DEPARTMENTAL REPRESEN TATIVE ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 6 INVOKED THE PROVISIONS OF R. 27 OF ITAT RULES, 1963 AND CONTENDED THAT THE AFORESAID AMOUNT CANNOT BE TREAT ED AS MESNE PROFITS SINCE SUCH RECEIPTS ORIGINATE FROM TH E AGREEMENT BETWEEN ASSESSEE AND NIHPL. COUNSEL FOR T HE ASSESSEE HAS NOT OBJECTED TO THE RIGHT OF REVENUE F OR INVOKING R. 27 OF ITAT RULES, 1963. (PARA 32) THERE IS NO DISPUTE TO THE PROPOSITION THAT CONSIDE RATION RECEIVED UNDER THE LEAVE AND LICENSE AGREEMENT AMOU NTS TO REVENUE RECEIPT CHARGEABLE TO TAX. THE ASSESSEE ITSELF HAS OFFERED THE SAME IN ASST. YRS. 1991-92 AND 1992 -93 AS BUSINESS INCOME. THE ASSESSEE HAD SHOWN THE INCOME OF RS. 21,23,911 AND RS. 13,87,833 IN ASST. YRS. 1991- 92 AND 1992-93 RESPECTIVELY AS BUSINESS INCOME. THEREFORE, IT IS NOT NECESSARY TO ADJUDICATE ABOUT THE NATURE OF REC EIPT UNDER THE AGREEMENT. THE DISPUTE RELATES TO THE AMO UNT RECEIVED BY THE ASSESSEE @ RS. 10 LAKHS PER MONTH A LONG WITH INTEREST @ 21 PER CENT FOR THE PERIOD COMMENCI NG FROM 1ST APRIL, 1992 TILL THE DATE OF POSSESSION HA NDED OVER TO THE ASSESSEE IN TERMS OF THE DECREE AWARDED BY T HE APEX COURT. THERE IS NO DISPUTE TO THE FACT THAT LEAVE A ND LICENCE AGREEMENT BETWEEN THE PARTIES WAS CONCLUDED AND TERMINATED AND NIHPL WAS REQUIRED TO VACATE THE SAI D PREMISES ON OR BEFORE 31ST MARCH, 1992. THIS AGREEM ENT WAS TAKEN COGNISANCE BY THE CITY CIVIL COURT IN ITS ORDER DT. 29TH JUNE, 1993. ACCORDINGLY, THE AGREEMENT WAS NO MORE IN EXISTENCE. AFTER THE TERMINATION OF THE SAID AGR EEMENT, NEITHER THE ASSESSEE COULD LEGALLY RECOVER FROM NIH PL NOR THE NIHPL WAS LIABLE TO PAY ANY AMOUNT TO THE ASSES SEE UNDER THE TERMS OF THE SAID AGREEMENT. WHAT THE ASS ESSEE WAS ENTITLED TO WAS THE COMPENSATION AS PER CIVIL L AW AGAINST UNLAWFUL POSSESSION BY NIHPL. SINCE THE AGR EEMENT CEASED TO EXIST, NO PART OF THE SUM OF RS. 34,57,01 ,137 CAN BE SAID TO ARISE FROM THE SAID AGREEMENT. CONSEQUEN TLY, THE CONTENTION OF THE DEPARTMENTAL REPRESENTATIVE T HAT THE AFORESAID DISPUTED AMOUNT RECEIVED BY ASSESSEE REPRESENTED BUSINESS RECEIPT CHARGEABLE TO TAX UNDE R THE TERMS OF THE AGREEMENT CANNOT BE ACCEPTED. FURTHER CONTENTION THAT CONSENT DECREE DOES NOT MAKE THE COMPENSATION AS MESNE PROFIT AND THE MERE FACT THAT A PARTICULAR AMOUNT WAS CLAIMED BY THE ASSESSEE AS ME SNE PROFIT IN THE SUIT FILED BEFORE THE COURT AND THE F ACT THAT THE SAME HAS BEEN ACCEPTED BY THE DEFENDANT WOULD NOT M AKE THE COMPENSATION AS MESNE PROFIT, IS ALSO NOT SUSTA INABLE. CONSENT DECREE HAS THE SAME BINDING FORCE AS ANY OT HER DECREE. THE MESNE PROFITS HAVE BEEN DEFINED IN S. 2 (12) OF THE CPC, 1908 AS THOSE PROFITS WHICH THE PERSON IN WRONGFUL POSSESSION OF SUCH PROPERTY ACTUALLY RECEI VED OR MIGHT WITH ORDINARY DILIGENCE HAVE RECEIVED THEREFR OM, TOGETHER WITH INTEREST ON SUCH PROFITS, BUT SHALL N OT INCLUDE ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 7 PROFITS DUE TO IMPROVEMENTS MADE BY THE PERSON IN WRONGFUL POSSESSION. IN VIEW OF THIS STATUTORY DEFI NITION, IT IS NOT NECESSARY TO LOOK INTO ANY OTHER DEFINITION. THE ABOVE DEFINITION CLEARLY TAKES WITHIN ITS SCOPE ANY RECEIPT AGAINST WRONGFUL POSSESSION OF PROPERTY. IN THE PRE SENT CASE, THE AMOUNT RECEIVED UNDER THE DECREE OF THE C OURT IS RELATED TO THE WRONGFUL OR UNLAWFUL POSSESSION OF T HE PROPERTY BY NIHPL FROM 1ST APRIL, 1992 TILL HANDING OVER THE PROPERTY TO THE ASSESSEE. THEREFORE, THE SAME HAS T O BE TREATED AS MESNE PROFITS. ANANT CHUNILAL KATE VS. ITO (2004) 187 CTR (BOM) 93 : (2004) 267 ITR 482 (BOM) AND KUMAR SUDHENDEN NARAN DEB VS. MRS. RENUKA BISWAS (1992) 1 SCC 206 FOLLOWED. (PARAS 35 TO 37) THERE IS CLEAVAGE OF OPINION BETWEEN HIGH COURTS. T HE MADRAS HIGH COURT HAS HELD THAT MESNE PROFIT IS RECOMPENSE FOR DEPRIVATION OF INCOME WHICH THE OWNE R WOULD HAVE ENJOYED BUT FOR THE INTERFERENCE OF THE PERSONS IN WRONGFUL POSSESSION OF THE PROPERTY. CONSEQUENTL Y, THE SAME IS REVENUE RECEIPT CHARGEABLE TO TAX. ON THE O THER HAND THE HIGH COURTS OF ANDHRA PRADESH, CALCUTTA, K ERALA AND PATNA HAVE HELD THAT MESNE PROFIT IS IN THE NAT URE OF DAMAGES FOR DEPRIVATION FOR USE AND OCCUPATION OF T HE PROPERTY AND THEREFORE CAPITAL RECEIPT NOT CHARGEAB LE TO TAX. THERE IS NO JUDGMENT OF THE JURISDICTIONAL HIG H COURT ON THIS ISSUE. SUCH CONFLICT CAN BE RESOLVED ONLY B Y THE SUPREME COURT IN SOME APPROPRIATE CASE. IN THE ABSE NCE OF THE JUDGMENT OF THE HIGHEST COURT OF LAND OR OF THE JURISDICTIONAL HIGH COURT, THE LEGAL POSITION IS TH AT WHERE THERE ARE TWO VIEWS THEN THE VIEW FAVOURABLE TO THE SUBJECT SHOULD BE PREFERRED. THEREFORE, IT HAS TO BE HELD T HAT MESNE PROFIT RECEIVED FOR DEPRIVATION OF USE AND OC CUPATION OF PROPERTY WOULD BE CAPITAL RECEIPT NOT CHARGEABLE TO TAX. IN THE PRESENT CASE, AFTER THE TERMINATION OF LEASE , NIHPL WAS OCCUPYING AND USING THE PROPERTY UNAUTHORISEDLY AND THUS THE ASSESSEE WAS DEPRIVED OF THE USE AND OCCUP ATION OF THE PROPERTY AND THEREFORE, THE MESNE PROFIT REC EIVED BY THE ASSESSEE UNDER THE CONSENT DECREE AWARDED BY TH E APEX COURT @ RS. 10 LAKHS PER MONTH WAS ON ACCOUNT OF DAMAGES FOR DEPRIVATION OF USE AND OCCUPATION OF TH E PROFITS AND THEREFORE, THE SUM SO RECEIVED WAS CAPI TAL IN NATURE NOT CHARGEABLE TO TAX. SUSHIL KUMAR & CO. VS. JT. CIT (2003) 81 TTJ (KOL)(SB) 864 : (2004) 88 ITD 35 (KOL)(SB) OVERRULED; CIT VS. VEGETABLE PRODUCTS LTD. 1973 CTR (SC) 177 : (1973) 88 ITR 192 (SC), CIT VS. NAGA HILLS TEA CO. LTD. 1973 CTR (SC) 329 : (1973) 89 ITR 236 (SC), CIT VS. MADHO PD. JATIA 1976 CTR (SC) 438 : (1976) 105 ITR 179 (SC), CIT VS. J.K. HOSIERY FACTORY (1986) 52 CTR (SC) 142 : (1986) 159 ITR 85 (SC) AND SHASHI GUPTA VS. LIC 84 COMP CAS 436 APPLIED. ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 8 (PARAS 48 & 49) CONCLUSION: MESNE PROFITS AWARDED UNDER DECREE OF COURT BY WAY OF COMPENSATION FOR WRONGFUL POSSESSION OF PROPERTY AF TER TERMINATION OF LEAVE AND LICENCE AGREEMENT IS CAPIT AL RECEIPT NOT CHARGEABLE TO TAX. 3.4. IT IS ALSO NOTED THAT THE MUMBAI BENCH OF THE TRIBUNAL, THE CASE OF THE ASSESSEE FOR AYS 2004-05 AND 2006-07 (ITA NO.6701/MUM/2011) AND ITA NO.1190 TO 1192/MUM/2013, ORDER DATED 04/03/2015 HELD AS UNDER . THIS BUNCH OF FOUR APPEALS IS BY THE REVENUE CHALL ENGING THE RESPECTIVE IMPUGNED ORDERS DATED 08/07/2011(ASSESSMENT YEAR 2003- 04) AND 19/11/2012(ASSESSMENT YEARS 2004-05 TO 2006-07) OF THE LD. FIRST APPELLATE AUTHORITY, MUMBAI, ON THE GROUND IN DELETIN G THE ADDITION OF RS.3,00,31,873/- BEING RENTAL INCOME FROM THE PROPE RTY. THE CRUX OF ARGUMENT ADVANCED BY SHRI VIJAY KUMAR BORA, LD. DR, IS THAT THE LD. COMMISSIONER OF INCOME TAX (APPEALS) WHILE GRANTING THE RELIEF DID NOT APPRECIATE THE FACTS, AS THE ASSESSEE SUPPRESSED IT S INCOME FROM HOUSE PROPERTY BY NOT OFFERING TRUE AND CORRECT RENTAL INC OME FROM ALL TENANTS IN ITS RETURN OF INCOME FOR ASSESSMENT YEAR 2003-04, I DENTICAL ASSERTIONS WERE MADE FOR REMAINING ASSESSMENT YEARS, BY SUBMIT TING THAT THE LD. FIRST APPELLATE AUTHORITY WRONGLY DELETED THE ADDITION OF RS . 3,67,96,393/- (ASSESSMENT YEAR 2004-05), RS.3,95,69,419/- (ASSE SSMENT YEAR 2005-06) AND RS.4,26,06,757/- (ASSESSMENT YE AR 2006-07). 2. SINCE IDENTICAL GROUNDS ARE RAISED IN ALL THE APP EALS, THESE CAN BE DISPOSED OFF BY A COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. THE FACT, IN BRIEF, ARE THAT THE ASSESSEE IS OWNER OF SHOPS IN CANNAUGHT PLACE, NEW DELHI AND DECLARED RS.33,19,541/- AS RENTAL INCOME FROM THE SHOPS, WHEREAS THE LD. ASSESSING OFFICER CALCULATED T HE INCOME AT RS. 31,56,251/-. THE ASSESSEE CLAIMED IT A TYPOGRAPHIC AL ERROR/CALCULATION MISTAKE. HOWEVER, THE MATTER TRAVELLED TO THE HON BLE HIGH COURT, WHEREIN, THE RENT WAS DETERMINED AT THE RATE OF RS.1 ,42,200/- PER MONTH, PAYABLE BY BANK OF PUNJAB. HOWEVER, THE ASSESSEE C LAIMED RS.7,331/- PER MONTH, AS RENT RECEIVED. THE ASSESSING OFFICER CALC ULATED THE DEEMED RENTAL INCOME FROM THESE PROPERTIES AND THUS THE MA RKET VALUE WAS ADOPTED AT RS.15,64,201/- FOR DETERMINING THE RENTAL I NCOME IN RESPECT OF OTHER UNITS APART FROM L-40. FACT REMAINS THAT THE ENTIRE AMOUNT WAS RECEIVED IN A. Y. 2007-08 AND 2008-09 FOR THE PERIOD C OMMENCING FROM ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 9 AUGUST, 2003, THE RENT FOR PRIOR PERIOD OF FOUR MONT HS, I.E. APRIL 2003, MAY 2003, JUNE 2003 AND JULY 2003 WAS DETERMINED AT THE RA TE OF RS.1,42,2001 - ONLY. ACCORDINGLY, THE ASSESSING OFFICER WORKED OUT RENTAL INCOME OF HEMKUNT IBOP AS UNDER: DETAILS OF OFFICE/ SHOPS AS PER ASSESSEE RENT (RS) PER MONTH AS PER HONBLE HIGH COURT PER MONTH (RS.) FOR F.Y.2003-04 DEEMED VALUE PER MONTH (IN RS.) RENTAL INCOME OF BALANCE PROPERTIES (RS.24,502 RS.733) 23,769 (EXCLUDING - 733) 733=1,56,420 50,72,233 RENTAL INCOME FOR THE YEAR [RS.50,72,233X12] RS.6,08,66,796 2.1. IN VIEW OF THE ABOVE, ASSESSING OFFICER WORKE D OUT THE DEEMED RENTAL INCOME AT RS.6,08,66,796/-. A FTER ALLOWING DEDUCTION U/S.24(A) @ 30% TOTAL INCOME WAS ASSESSED AT RS.4,26,06,757/-. WE NOTE THAT, AS OBSO RBED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) ALSO T HAT THE ASSESSING OFFICER WRONGLY PROCEEDED ON THE PREMISE THAT HON'BLE DELHI HIGH COURT HAS RETROSPECTIVELY DETERM INED AND FIXED RS.1,42,000/ - AS MONTHLY RENT FOR THE PR EMISES OCCUPIED BY M/S. BANK OF PUNJAB, AND THE SAID ORDER OPERATED AS A FORMULA TO RETROSPECTIVELY ENHANCE TH E RENTS BEING PAID BY ALL THE 39 PROTECTED TENANTS OF APPEL LANT BY 19000% I.E. FROM RS. 23,769/- PER MONTH TO RS.50,72 ,233/- PER MONTH, I.E. (RS.6,08,66, 796/ - P.A.). THE REST OF THE BUILDING (OTHER THAN PREMISES ON 1ST FLOOR OCCUPIED BY BANK OF PUNJAB) IS OCCUPIED BY STATUTORY TENANTS AN D THEY WERE PAYING STATUTORY RENT FOR THE LAST 25 YEARS. IT IS ALSO NOTED THAT THE ASSESSING OFFICER UNJUSTIFIABLY ENHA NCED THE RENTAL INCOME OF THE ASSESSEE WITHOUT ANY DOCUMENTA RY EVIDENCE/PRESUMPTIVE BASIS AS THE PRESUMPTIVE RENT WAS NEVER RECEIVED/RECEIVABLE BY THE ASSESSEE. THERE I S UNCONTROVERTED FINDING IN THE IMPUGNED ORDER THAT T HE ADDITIONAL RENT CONTROL TRIBUNAL DIRECTED PUNJAB NA TIONAL BANK TO DEPOSIT THE AMOUNT OF RS.1,42,000/- (AS MES NE PROFIT/OCCUPATION CHARGES/DAMAGES) IN THE COURT AND NOT HONBLE DELHI HIGH COURT, WHICH BANK OF PUNJAB WAS PAYING TO M/S. HEMKUNT CHEMICALS VIDE ITS ORDER DATED 05/07/2003. THE HONBLE DELHI COURT IN ITS ORDER DA TED 29/07/2003 DID NOT MENTION ANY AMOUNT, OR FIX/DETERMINE ANY ENHANCED RENT FOR M/S. BANK OF PU NJAB ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 10 OR THE ASSESSEE'S 39 OTHER TENANTS AS ERRONEOUSLY A SSUMED BY THE ASSESSING OFFICER. THE SPECIAL BENCH OF THE ITAT IN THE CASE OF NARANG OVERSEAS(P)LTD. V. ACIT 111 ITD 1, HELD THAT THE AMOUNT WAS RECEIVED AGAINST WRONGFUL POSSE SSION OF THE PROPERTY AND THEREFORE THE MESNE PROFIT RECE IVED BY THE ASSESSEE UNDER THE CONSENT DECREE AWARDED BY TH E APEX COURT AT THE RATE OF RS. 10 LAKHS WAS ON ACCOU NT OF DAMAGES FOR DEPRIVATION OF USE AND OCCUPATION FOR T HE PROPERTY AND, THEREFORE, THE SUM SO RECEIVED WAS CA PITAL IN NATURE AND NOT CHARGEABLE TO TAX WAS NOT CONSIDERED BY THE ASSESSING OFFICER IN PROPER PROSPECTIVE AND HE DELI BERATELY CHOSE TO IGNORE THAT THE ASSESSEE'S 39 PROTECTED TE NANTS WERE NOT A PARTY TO THE PROCEEDING BETWEEN THE ASSE SSEE AND BANK OF PUNJAB/HEM KUNT CHEMICALS AT ANY STAGE, THUS, THE ORDERS THEREIN HAD NO, AND COULD NOT HAVE ANY APPLICATION UPON THEM. THE ANNUAL VALUE TO BE ASSES SED IN THE HANDS OF THE LANDLORD/OWNER IS A STATUTORY RENT AMOUNT ONLY AND NOT THE ENHANCED AMOUNT RECEIVED BY THE TE NANT FROM THE SUB-TENANTS/ OCCUPANT. THE ASSESSING OFFIC ER HAD COMMITTED AN ERROR IN CONSIDERING THE AMOUNT OF MON EY DEPOSITED, IN COURT, BY BANK OF PUNJAB IN THE SUBSE QUENT ASSESSMENT YEARS AS RENT DUE TO THE ASSESSEE INSTEA D OF COMPENSATION/OCCUPATION CHARGES, WHICH IS DIRECTED BY THE COURT TO BE PAID BY PARTY (IN THIS CASE BANK OF PUNJAB) AGAINST WHOM EVICTION ORDER HAD BEEN PASSED, WHICH IS IN DIRECT CONTRADICTION OF THE ASSESSING OFFICER'S OWN FINDING IN PAGE-2 OF THE ASSESSMENT ORDER, WHEREIN THE ASSE SSING OFFICER HAS ADMITTED THAT IN JULY,2003, BANK OF PUN JAB WAS DIRECTED TO PAY COMPENSATION OF RS.1,42,000/- PER M ONTH BY DELHI HIGH COURT. THIS AMOUNT (DEPOSITED BY BANK OF PUNJAB) WHICH THE ASSESSING OFFICER TREATS AS RENTA L INCOME IS IN REALITY COMPENSATION FOR WRONGFUL POSSESSION WHICH WAS DEPOSITED ONLY IN THE SUBSEQUENT ASSESSMENT YEA RS BY BANK OF PUNJAB, AND WAS RECEIVED BY THE ASSESSEE ON LY IN A.Y.2007-2008, AND A.Y.2008-09. THERE IS WRONG PRESUMPTION BY THE ASSESSING OFFICER THAT BANK OF PUNJAB AND NOT HEM KUNT CHEMICALS WAS THE ASSESSEES TENAN T WITHOUT APPRECIATING THAT AS PER SEC. 16(A) AND (B) OF THE DELHI RENT ACT NO TENANT WITHOUT THE PREVIOUS CONSE NT IN WRITING OF THE LAND LORD HAS THE RIGHT TO SUBLET OR ASSIGN THE PREMISES OCCUPIED BY HIM. ONCE EVICTION ORDERS ARE PASSED THE RELATIONSHIP OF LAND LORD/TENANT COMES TO AN EN D. ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 11 THEREAFTER, THE LAND LORD CAN BE AWARDED ONLY COMPENSATION BY THE COURT TILL POSSESSION IS HANDED BACK TO THE LAND LORD BY THE TENANT. THUS, THERE WAS A G ROSS ERROR IN THE ASSESSMENT ORDER IN INCREASING THE RENTS OF ALL THE APPELLANT'S REMAINING 39 PROTECTED TENANTS (BEING RS.23,769/- PER MONTH PAID TO THE APPELLANT BY ITS LAWFUL/ PROTECTED TENANTS) BY 19000% I.E. TO RS.50, 72,233/ - PER MONTH BECAUSE THESE LAWFUL TENANTS ARE ,PROTECTED TENANTS WHO ENJOY PROTECTION UNDER THE DELHI RENT CONTROL ACT,1958. SEC 6A OF THE DELHI RENT ACT 1958 HAS RES TRICTED THE POWER OF LAND LORDS (I.E. THE APPELLANT HEREIN) TO INCREASE RENTS BEYOND 10% AND THAT TOO ONLY AFTER E VERY 3 YEARS. 2.2. SECTION 105 AND 107 OF THE TRANSFER OF TRANSF ER OF PROPERTY ACT DOES NOT CONFER ANY RIGHT ON ANY CI VIL COURT TO FIX THE RENT OF ANY PREMISES, WHICH IS A MATTER BETWEEN THE LESSOR AND THE LESSEE SUBJECT TO PROVISIONS OF THE RENT ACT. THE APPELLANT IS EXPRESSLY BARRED FROM RECEIVI NG ANY CONSIDERATION FOR CREATION OF A SUB-TENANT OR THE T ENANTS AS PER SEE 16(4) OF THE DELHI RENT ACT. SIMILAR ISSUE WITH IDENTICAL FACTS IN ASSESSEE'S OWN CASE WAS DECIDED BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR A. Y. 2003 -04, WHEREIN, CIT(A) VIDE ORDER NO.CIT(A)-23/ITO-12(1 )(4)/IT-448/201 0-11 DATED 08/07/2011 HELD AS UNDER : 'THE ASSESSING OFFICER HAS COMPUTED INCOME FROM HOU SE PROPERTY IN RESPECT OF ALL THE TENANTED PREMISES, I NCLUDING L- 40, 1ST FLOOR PREMISES IN RESPECT OF WHICH THERE WA S A DISPUTE BEFORE THE TRIBUNAL! COURT, AND IN RESPECT OF WHICH THE APPELLANT HAS BEEN ALLOWED TO WITHDRAW MONEYS DEPOSITED UNDER COURT ORDER. THE ASSESSING OFFICER ON THE BASIS OF THE AMOUNT DETERMINED BY THE HIGH COURT IN RESPECT OF L-40 WHICH WAS IN DISPUTE, HAS TREATED T HE SAME AS RENTAL FOR THE BALANCE PROPERTIES AS RECEIVABLE AND THE DIFFERENCE AMOUNT (I. E., DIFFERENCE BETWEEN RENTAL INCOME AS PER HIGH COURT ORDER AND AS DECLARED BY THE APPELLA NT) HAS BEEN BROUGHT TO TAX. FOR THE PROPERTIES OTHER THAN L-40, DEEMED VALUE OF RENTAL OF RS.34,61 ,623 PER MONTH H AS BEEN TAKEN. WITH REGARD TO L-40 ON SIMILAR BASIS (A FTER ALLOWING FOR COST INFLATION @ 20%), AMOUNT OF RS.1, 13,600/- PER MONTH HAS BEEN TAKEN AS THE DEEMED RENTAL VALUE . IT IS FOUND, FIRSTLY THAT THE ORDER OF DELHI HIGH COURT W AS ONLY SPECIFIC TO L-40 PREMISES, WHICH WERE LET OUT TO HE MKUNT ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 12 CHEMICALS FURTHER SUBLET TO 8ANK OF PUNJAB. THE PRO PERTIES WERE UNDER THE DELHI RENT CONTROL ACT. THE ITAT MUM BAI IN ITA NO. 35241MI2008 A.Y.2002-03 IN SHRI DEEPAK VASW ANI V ITO WARD 12(2)(40 MUMBAI HAS LAID DOWN PRINCIPLES ON HOW THE DETERMINATION OF ALV IS TO BE MADE. IT HAS BEEN HELD THAT IN CASE THE PROPERTY IS COVERED BY THE RE NT CONTROL ACT, THE ANNUAL VALUE U/S 23(1) (A) CANNOT EXCEED T HE STANDARD RENT DETERMINED UNDER THE RENT CONTROL ACT BECAUSE OF THE RESTRICTION ON THE VALUE OF RENT AS HELD BY THE SUPREME COURT IN THE CASE OF SHEELA KAUSHIK (113 IT R 435). THUS WITHOUT ANY SPECIFIC ORDER IN RESPECT OF OTHER PROPERTIES, THE ASSESSING OFFICER COULD NOT HAVE EXTRAPOLATED THE RENT USING THE BASIS OF THE COURT DECISION IN RESPECT OF THE L-40 PROPERTY. THE ASSESSING OFFI CER IS THUS DIRECTED TO RESTRICT THE RENTAL INCOME IN RESP ECT OF PROPERTIES OTHER THAN L-40 TO THE STANDARD RENT DET ERMINED UNDER THE RENT CONTROL ACT. AS REGARDS THE L-40 PROPERTY (UNDER DISPUTE), PROVI SIONS OF SECTION 25AA AND 258 HAVE TO BE TAKEN INTO CONSIDER ATION. SECTION 25AA OF THE ACT PROVIDES THAT WHERE THE ASS ESSEE CAN NOT REALIZE RENT FROM A PROPERTY LET OUT TO A T ENANT, AND SUBSEQUENTLY ANY AMOUNT IN RESPECT OF SUCH RENT IS REALIZED, SUCH RECEIPT SHALL BE DEEMED TO BE CHARGE ABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' AS INCO ME OF THE PREVIOUS YEAR IN WHICH IT IS RECEIVED. SECTION 258 OF THE ACT MAKES A SPECIAL PROVISION FOR ARREARS OF RENT R ECEIVED, AND STATES THAT WHERE AN ASSESSEE HAS RECEIVED AN A MOUNT BY WAY OF ARREARS OF RENT FROM SUCH PROPERTY, WHICH IS NOT CHARGED TO TAX IN ANY PREVIOUS YEAR, THE AMOUNT SO RECEIVED SHALL BE DEEMED TO BE CHARGEABLE UNDER THE HEAD 'IN COME FROM HOUSE PROPERTY' AS INCOME OF THE PREVIOUS YEAR IN WHICH IT IS RECEIVED, WHETHER THE ASSESSEE CONTINUE S TO REMAIN THE OWNER OF SUCH PROPERTY IN THE PREVIOUS Y EAR IN WHICH ARREARS ARE RECEIVED OR NOT. (DEDUCTION OF 30 % WOULD ALSO BE ALLOWABLE AGAINST SUCH RECEIPT). IN THE PRE SENT CASE SINCE THE APPELLANT HAS NOT RECEIVED ANY AMOUNT EIT HER BY WAY OF UNREALIZED RENT OR BY WAY OF ARREARS IN AY 2 003-04, WHICH IS EVIDENT FROM THE COURT ORDERS (THE AMOUNT IS STATED TO HAVE BEEN RECEIVED AFTER DIRECTIONS OF THE COURT DATED 2910712007) AND AMOUNTS WERE RELEASED TO THE APPELL ANT FROM 2810712006. IN POINT OF FACT EVEN THE ORDER OF COURT DIRECTING DEPOSIT OF MONTHLY AMOUNT OF RS. 1,42,000 1 - IS DATED 2910712003, WHICH IS AFTER THE END OF THE PRE VIOUS YEAR RELEVANT TO AY 7003-04. THUS IN VIEW OF THE PR OVISIONS OF SECTIONS 25AA AND 258, THE INCOME (RECEIPT) IS T O BE TAXED IN THE YEAR OF RECEIPT AND CANNOT BE SUBJECTED TO T AX IN AY ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 13 2003-04. THE RENTAL INCOME FOR AY 2003-04 WOULD BE RESTRICTED TO THE STANDARD RENT DETERMINED UNDER TH E RENT CONTROL ACT. THE ADDITION MADE BY THE ASSESSING OFFICER IS THUS DELETED.' 2.3. BEFORE US, NO CONTRARY DECISION WAS BROUGHT ON RECORD BY EITHER SIDE REVERSING THE AFORESAID ORDER, THUS, ON THE RULE OF CONSISTENCY ALSO THE ASSESSEE IS HAVING A G OOD CASE, THUS, THE STAND OF THE CIT(A) DESERVES TO BE UPHELD . THE ASSESSMENT YEAR 2003-04 IS THE LEAD YEAR, WHEREIN, WE HAVE UPHELD THE STAND OF THE LD. COMMISSIONER OF IN COME TAX (APPEALS), WHEREAS, THE REMAINING ASSESSMENT YE ARS, ON IDENTICAL FACT, THE GROUND RAISED BY THE REVENUE IS THAT THE CASE OF ASSESSMENT YEAR 2003-04 IS PENDING BEFO RE THE TRIBUNAL. HOWEVER, WE HAVE UPHELD THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) FOR ASSESSMENT YEAR 2003-04, THEREFORE, THE IDENTICAL ISSUE FOR TH E LATER ASSESSMENT YEARS IS AUTOMATICALLY DISPOSED OF IN FA VOUR OF THE ASSESSEE. 3.5. DURING HEARING, THE LD. DR NEITHER CONTROVER TED THE FACTUAL FINDING RECORDED BY THE TRIBUNAL FOR AS SESSMENT YEAR 2004-05 AND 2006-07 NOR BROUGHT ON RECORD ANY CONTRARY DECISION/FACTS, THEREFORE, FOR THE SAKE OF CONSISTENCY, IT HAS TO BE FOLLOWED AND AS ON DATE T HE ORDER OF THE TRIBUNAL STANDS. 3.6. IN ANOTHER CASE, OF GOODWILL THEATERS PVT. LT D. (ITA NO.8185/MUM/2012, FOR ASSESSMENT YEAR 2008-09 ORDER DATED 09/06/2013, THE COORDINATE BENCH OF THE TRIBU NAL HELD AS UNDER:- ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 14 THIS APPEAL HAS BEEN PREFERRED BY THE DEPARTMENT A GAINST THE ORDER DATED 30-9-2011 OF LEANED CIT(A)-3, MUMBA I RELATING TO THE ASSESSMENT YEAR 2008-09. 2. THE DEPARTMENT IN GROUNDS NO.1 & 2, HAS RAISED O BJECTION IN REGARD TO HOLDING THAT THE MESNE PROFITS OF RS.1,47,18,280/- RECEIVED BY THE ASSESSEE CONSTITUT ED CAPITAL RECEIPT NOT CHARGEABLE TO TAX, IN SPITE OF THE DIRE CT DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF CIT VS . P. MARIAPPA GOUNDER, 147 ITR 676, HOLDING THE SAME TO BE REVENUE IN NATURE. 3. THE FACTS IN BRIEF ARE THAT DURING THE YEAR UNDE R CONSIDERATION THE ASSESSEE COMPANY RECEIVED MENSE P ROFIT FOR UNAUTHORISED OCCUPATION ITA NO.8185/2011 OF THE PRE MISES (NOVELTY CHAMBERS) FROM CENTRAL BANK OF INDIA WHO W AS IN POSSESSION OF THE RENTED PREMISE IN THE NOVELTY CHA MBERS. THE TENANCY OF CENTRAL BANK OF INDIA ENDED ON 1.6.2 000. AS PER THE ORDER OF THE SUPREME COURT VIDE SLP 19635 O F 2002 IN WHICH THE COURT DIRECTED THE BANK TO HAND OVER T HE POSSESSION TO THE ASSESSEE COMPANY BY 30/06/2003 DU E TO WHICH THE BANK GAVE POSSESSION TO THE ASSESSEE COMP ANY OF NOVELTY CHAMBERS ON 30/09/2003. HENCE A SUIT WAS FI LED BY THE ASSESSEE COMPANY FOR MESNE PROFIT FOR THE AFORE SAID PERIOD. THE SMALL CAUSES COURT AT MUMBAI PASSED AN ORDER DATED 28/03/2007 WHOSE COPY WAS RECEIVED BY THE ASS ESSEE COMPANY ON 13TH JUNE 2007 FOR THE T.E. AND R. SUIT NO.59/81 OF 2000 OF MISCELLANEOUS NOTICE NUMBER 275 OF 2002 FILED BY THE ASSESSEE COMPANY WHEREIN THE MESN E PROFIT WAS FIXED AT RS.8,33,474/- PER MONTH FOR THE PERIOD BETWEEN 1/06/2000 TO 30/09/2003 PLUS INTEREST THEREON. THE PERIOD WAS DECIDED ON THE BASIS OF THE FACT THAT THE TENAN CY OF CENTRAL BANK OF INDIA WAS TERMINATED ON 1/06/2000 A ND IT VACATED THE PREMISES A GIVE PEACEFUL POSSESSION TO THE ASSESSEE COMPANY ON 30/09/2003. THE TOTAL COMPENSAT ION WAS THUS FIXED AT RS.3,33,38,960/- PLUS INTEREST TH EREON AT THE RATE OF 6%. THEREAFTER, CENTRAL BANK OF INDIA F ILED AN APPLICATION TO THE SMALL CAUSES COURT AGAINST THE T .E. AND R SUIT NO.59/81 OF 2000 OF MISCELLANEOUS NOTICE NUMBE R 275 OF 2002 VIDE ITS APPEAL NUMBER 1744 OF 2007 FOR STA YING EXECUTION AND OPERATION OF THE ORDER DATED 28/03/20 07 WHICH WAS DISPOSED BY DIRECTING THE APPELLANT TO PA Y RS.1,47,28,280/-. MOREOVER, ITA NO.8185/2011 CENTRA L BANK OF INDIA HAVE ALSO PREFERRED AN APPEAL AGAINST THE SAID DETERMINATION OF MESNE PROFIT WHICH HAS BEEN ADMITT ED AND IS PENDING. THUS, IN THE MEAN TIME DURING AY 08-09, CENTRAL BANK OF INDIA PAID RS.1,47,18,280/- TO THE ASSESSEE COMPANY WHICH THE ASSESSEE COMPANY HAS DIRECTLY TAKEN TO TH E CAPITAL RESERVE WITHOUT CREDITING THE PROFIT AND LOSS ACCOU NT HOLDING ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 15 IT TO BE A CAPITOL RECEIPT EXEMPT FROM INCOME-TAX. THE APPEAL OF THE CENTRAL BANK OF INDIA VIDE ITS APPEAL NUMBER 1744 OF 2007 IS STILL PENDING FOR ADJUDICATION. 4. ASSESSEE PREFERRED APPEAL BEFORE THE CIT(A). DET AILED WRITTEN SUBMISSIONS WERE FILED BEFORE HIM. IT WAS S UBMITTED THAT MESNE PROFIT RECEIVED FOR UNAUTHORIZED OCCUPAT ION OF THE PREMISES IS A CAPITAL RECEIPT NOT CHARGEABLE TO TAX IN THE LIGHT OF THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN THE CASE OF NARANG OVERSEAS PVT. LTD. VS. ACIT, REPORTED IN 100 ITD (MUM)(SB). FURTHER RELIANCE WAS PLACED ON THE DECIS ION IN THE CASE OF CIT VS. MRS. ANNAMMA ALEXANDER, 191 ITR 551 (KER.). REGARDING THE DECISION OF THE HON'BLE MADRA S HIGH COURT RELIED UPON BY THE LEARNED AO, IT WAS SUBMITT ED THAT THE FACTS IN THAT CASE ARE DIFFERENT. THE FINDING O F THE LEARNED AO WERE EXPLAINED BEFORE THE CIT(A) THROUGH WRITTEN SUBMISSION AND IT WAS SUBMITTED THAT FINDINGS OF TH E LEARNED CIT(A) ARE NOT CORRECT. IT WAS FURTHER SUBMITTED TH AT THE DECISION OF THE HON'BLE MADRAS HIGH COURT, WHICH IS MERGED IN THE DECISION OF THE HON'BLE SUPREME COURT, HAS B EEN CONSIDERED BY THE SPECIAL BENCH AND FOUND THAT THE FACTS ARE DIFFERENT. LEARNED CIT(A) AFTER CONSIDERING THE ORD ER OF THE AO, DETAILED WRITTEN ITA NO.8185/2011 SUBMISSION FI LED ON BEHALF OF THE ASSESSEE, WHICH ARE PART OF THE ORDER OF LEARNED CIT(A) ALSO, FOUND THAT THE AO WAS NOT JUSTIFIED IN TREATING THE RECEIPTS AS REVENUE IN NATURE. LEARNED CIT(A) F OUND THAT THE DECISION OF THE HON'BLE MADRAS HIGH COURT HAS B EEN CONSIDERED BY THE SPECIAL BENCH IS SQUARELY APPLICA BLE ON THE FACTS OF THE PRESENT CASE AS THE FACTS OF THE PRESE NT CASE ARE ALSO SIMILAR TO THE FACTS BEFORE SPECIAL BENCH. ACC ORDINGLY, HE HELD THAT THE MESNE PROFIT RECEIVED BY THE ASSESSEE IS CAPITAL IN NATURE AND NOT CHARGEABLE TO TAX. AGAINST THE FI NDING OF THE LEARNED CIT(A), THE DEPARTMENT IS IN APPEAL HERE BE FORE THE TRIBUNAL 5. LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. P ART OF THE ORDER OF THE AO WAS READ ALSO. ON THE OTHER HAND, L EARNED COUNSEL OF THE ASSESSEE PLACED STRONG RELIANCE ON T HE ORDER OF LEARNED CIT(A). THE FINDINGS OF THE LEARNED CIT(A) HAVE BEEN RECORDED IN PARA 1.3 AT PAGES 17 & 18 OF HIS ORDER, ARE AS UNDER :- 'I HAVE CONSIDERED THE FACTS. IT IS SEEN THAT THE A O HAS RELIED IN THE CASE OF P. MARIAPPA GOUNDER 147 ITD 676 (MAD ) WHICH HAS BEEN AFFIRMED BY THE SUPREME COURT IN 232 ITR 2 (SC) WHEREIN THE ISSUE WAS THE YEAR OF TAXABILITY OF THE MSENE PROFIT. WHEREIN AS PER THE ORDER OF SUPREME COURT, THE TRIAL COURT HAS DETERMINE THE AMOUNT OF MESNE PORTIT PAYA BLE TO THE APPELLANT AND THE TRIAL COURT HAS DETERMINED TH E LIABILITY ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 16 AND PASSED AN ORDER ON DECEMBER 22, 1962. THEREFORE , IT WAS HELD THAT THE AMOUNT WAS ASCERTAINED ON 22.12.1962. HENCE, IT WAS LIABLE TO BE CHARGE ON THE BASIS OF MERCANTI LE SYSTEM OF ACCOUNTING IN THE AY. 1963-64. IT IS FURTHER SEEN TH AT THE APPELLANT HAS CONTESTED THAT THE ISSUE WHETHER THE MESNE PROFIT WAS CAPITAL OR REVENUE WAS NOT THE QUESTION AGITATED IN THE CASE OF P. MARIAPPA GOUNDER. THE AR RELIED IN T HE CASE OF NARANG OVERSEAS P.LTD. 111 ITD 1 MUM, (SB) WHEREIN THE HON'BLE 5 MEMBER SPECIAL BENCH HAS CONSIDERED THE D ECISION IN THE CASE OF P. MARIAPPA GOUNDER (SUPRA) AND OBSE RVED THAT THE ABOVE DECISION WAS ONLY CONCERN WITH ONE ISSUE RELATING TO YEAR OF APPLICABILITY OF MESNE PROFIT I.E. WHETH ER IT WAS TAXABLE IN THE AY. 63-64 OR A.Y. 64-65. THE ISSUE ITA NO.8185/2011 WHETHER MESNE PROFIT CONSTITUTE REVENU E RECEIPT OR CAPITAL RECEIPT WAS NOT BEFORE THE SUPRE ME COURT AS WAS APPARENT FROM THE QUESTION POSED BEFORE IT FOR ADJUDICATION. AFTER CONSIDERING THESE FACTS, THE HO N'BLE SPECIAL BENCH HAS HELD THAT MESNE PROFIT RECEIVED F ROM THE DEPREVIATION OF USE OF OCCUPATION OF PROPERTY WOULD BE CAPITAL RECEIPT NOT CHARGEABLE TO TAX. THIS DECISIO N OF SPECIAL BENCH IS ALSO TAKEN BEFORE THE JURISDICTIONAL HIGH COURT. HOWEVER, THE APPEAL AGAINST THIS DECISION WAS DISMI SSED VIDE ORDER DATED 25.6.2009 IN ITA NO. 1797 OF 2008 BY TH E HON'BLE BOMBAY HIGH COURT. IN THE LIGHT OF THESE FA CTS, THE MESNE PROFIT RECEIVED BY THE APPELLANT ON ACCOUNT O F DECREE AND DEPREVIATION OF USE OF OCCUPATION OF PROPERTY A ND THEREFORE, THE SUM SO RECEIVED WAS CAPITAL IN NATUR E NOT CHARGEABLE TO TAX. SINCE THE DECISION OF SPECIAL BE NCH IS BINDING ON THE APPELLATE AUTHORITIES WORKING UNDER ITS JURISDICTION. THEREFORE RESPECTFULLY FOLLOWING THE SAME, THE MESNE PROFIT IS RECEIVED BY THE APPELLANT IS TREATE D AS CAPITAL RECEIPT AND NOT CHARGEABLE TO TAX.' 6. AFTER GOING THROUGH THE ORDER OF AO AND THE ABOV E FINDINGS OF THE LEARNED CIT(A), WE NOTED THAT THE AO DECIDED THE ISSUE AGAINST THE ASSESSEE FOLLOWING THE DECISION OF THE HON'BLE MADRAS HIGH COURT IN THE CASE OF P. MARIAPPA GOUNDE R (SUPRA). THIS DECISION OF THE HON'BLE MADRAS HIGH C OURT AND THE DECISION OF THE HON'BLE SUPREME COURT CONFIRMIN G THE ORDER OF HON'BLE MADRAS HIGH COURT HAS BEEN CONSIDE RED BY THE SPECIAL BENCH AND FOUND THAT THE FACTS ARE DIFF ERENT. IT IS FURTHER SEEN THAT THE DECISION OF THE SPECIAL BENCH HAS BEEN CONFIRMED BY THE HON'BLE BOMBAY HIGH COURT VIDE ORD ER DATED 25-6- 2009. ALL THESE FACTS HAVE BEEN CONSIDE RED BY THE LEARNED CIT(A), WHICH REMAINED UNCONTROVERTED. THER EFORE, WITHOUT GOING INTO DETAILS FURTHER, WE SEE NO REASO N TO INTERFERE IN THE FINDINGS OF THE LEARNED CIT(A) AS THE ORDER OF THE LEARNED CIT(A) IS IN CONSONANCE WITH THE ORDER OF THE SPECIAL BENCH, WHICH HAS BEEN CONFIRMED BY THE HON' BLE ITA ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 17 NO.8185/2011 BOMBAY HIGH COURT. ACCORDINGLY, WE CON FIRM THE ORDER OF THE LEARNED CIT(A) ON THE ISSUE INVOLV ED. 7. GROUND NO.3 IS AGAINST HOLDING THAT THE MESNE PR OFITS THOUGH FORMING PART OF BOOK PROFITS UNDER SECTION 1 15JB WERE DEDUCTIBLE BEING CAPITAL RECEIPTS, IN SPITE OF THE CLEAR PROVISIONS OF THE EXPLANATION TO SECTION 115JB WHIC H DO NOT PERMIT SUCH A DEDUCTION. 8. THE NOTED THAT THE ASSESSEE HAS TREATED THE INCO ME OF RS.1,47,18,280/- AS CAPITAL RECEIPT WHICH WAS TAKEN DIRECTLY TO THE CAPITAL RESERVE ACCOUNT WITHOUT CREDITING THE P ROFIT AND LOSS ACCOUNT. THE AO HELD THAT SINCE THIS RECEIPT H AS BEEN TREATED AS REVENUE RECEIPT AND IN VIEW OF THE PROVI SION OF SECTION 115JB, NEEDS TO BE ADDED BACK TO THE BOOK P ROFIT AS THE SAME HAS BEEN CARRIED TO RESERVES OTHER THAN A RESERVE SPECIFIED UNDER SECTION 33AC OF THE ACT. ACCORDINGL Y, THE SAME WAS BROUGHT TO TAX WHILE COMPUTING THE INCOME UNDER SECTION 115JB OF THE ACT. 9. LEARNED CIT(A) DELETED THE ADDITION BY OBSERVING THAT SINCE THIS RECEIPT IS NOT REVENUE IN NATURE AS THE SAME IS CAPITAL IN NATURE, NOT CHARGEABLE TO TAX. THOUGH TH E LEARNED CIT(A) HAS DELETED THE ADDITION, HOWEVER, WHILE DEL ETING THE ADDITION, LEARNED CIT(A) HAS OBSERVED THAT SINCE TH E MESNE PROFIT IS REFLECTED IN THE PROFIT AND LOSS ACCOUNT, HENCE, IT IS RIGHTLY TAXABLE FOR COMPUTING BOOK PROFIT, HENCE, O N PRINCIPLE, THE FINDINGS OF THE AO WERE UPHELD. HOWEVER, SINCE THE MESNE PROFIT IS HELD TO BE CAPITAL IN NATURE, HENCE , NOT CHARGEABLE TO TAX, THEN IT ITA NO.8185/2011 BECOMES CONSEQUENTIAL IN NATURE. THEREFORE, THE INCOME COMP UTED UNDER SECTION 115JB WAS ALSO DELETED BY THE LEARNED CIT(A). 10. LEARNED DR PLACED RELIANCE ON THE ORDER OF AO. ON THE OTHER HAND, LEARNED COUNSEL OF THE ASSESSEE STATED THAT THE FINDINGS OF THE LEARNED CIT(A) RECORDED IN PARA 5.1 ARE PARTLY INCORRECT. IT WAS STATED THAT IT IS INCORRECT TO NO TE AT THE END OF THE LEARNED CIT(A) THAT SINCE THE MESNE PROFIT IS R EFLECTED IN PROFIT AND LOSS ACCOUNT, HENCE, IT IS RIGHTLY TAXAB LE FOR COMPUTING BOOKS PROFIT. IN THIS RESPECT, IT WAS SUB MITTED BY THE LEARNED AR THAT MESNE PROFIT WAS NOT REFLECTED IN THE PROFIT AND LOSS ACCOUNT AND THIS FACT HAS BEEN RECO RDED BY THE AO ALSO. THEREFORE, TO THIS EXTENT, THE FINDINGS OF THE LEARNED CIT(A) ARE NOT CORRECT, WHICH NEEDS TO BE RECTIFIED . FURTHER RELIANCE WAS PLACED ON THE ORDER OF CIT(A) TO THE R EMAINING PART OF HIS ORDER, WHERE THE ADDITION MADE BY THE A O WAS DELETED. ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 18 11. AFTER CONSIDERING THE SUBMISSION AND PERUSING T HE MATERIAL ON RECORD, WE FOUND THAT THE COUNSEL OF TH E ASSESSEE IS CORRECT IN OBJECTING THE FINDINGS OF THE LEARNED CIT(A) THAT THE MESNE PROFIT IS REFLECTED IN THE PROFIT AND LOS S ACCOUNT BUT WAS DIRECTLY CREDITED TO THE CAPITAL ACCOUNT IN THE BALANCE SHEET. LEARNED CIT(A) HAS HELD THAT THE MESNE PROFI T IS NOT REVENUE RECEIPT BUT CAPITAL IN NATURE BECAUSE WHILE DECIDING THE GROUND ON MERIT, THE RECEIPT HAS BEEN FOUND AS CAPITAL IN NATURE IN VIEW OF THE DECISION OF THE SPECIAL BENCH . SINCE THE MESNE PROFIT IS IN CAPITAL IN NATURE IN VIEW OF THE DECISION OF THE SPECIAL BENCH, ITA NO.8185/2011 THEREFORE, THEY CANNOT BE BROUGHT TO TAX UNDER SECTION 115JB OF THE ACT. E VEN THE EXPLANATION 2 TO SECTION 115JB SUPPORTS THE CASE OF THE ASSESSEE. THEREFORE, IN VIEW OF THE ABOVE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE REASON ING GIVEN BY THE LEARNED CIT(A), WE HOLD THAT THE LEARNED CIT (A) WAS JUSTIFIED IN DELETING THE ADDITION COMPUTED BY THE AO UNDER SECTION 115JB. ACCORDINGLY, IN THIS REGARD, THE ORD ER OF THE LEARNED CIT(A) IS CONFIRMED. 12. IN THE RESULT, APPEAL OF THE DEPARTMENT IS DISM ISSED. IN THE AFORESAID ORDER, THE TRIBUNAL HAS DULY CONSIDERED THE DECISION FROM HON'BLE MADRAS HIGH CO URT IN THE CASE OF CIT VS P. MARIAPPA GOUNDER (147 ITR 676 ) (MAD.), THE SPECIAL BENCH DECISION IN THE CASE OF N ARANG OVERSEAS PVT. LTD. (SUPRA), CIT VS M/S ANNAMMA ALEX ANDER, 191 ITR 551 (KERALA), THE DECISIONS RELIED UPON BY LD. DR AND THEREAFTER THE APPEAL OF THE REVENUE WAS DISMIS SED. IT IS NOTED THAT THIS DECISION OF THE TRIBUNAL WAS AFF IRMED BY HON'BLE JURISDICTIONAL HIGH COURT VIDE ORDER DATED 06/06/2016 (INCOME TAX APPEAL NO.2356 OF 2013). THE RELEVANT PORTION (PAGES 10-14 OF THE PAPER BOOK) IS REPRODUCED HEREUNDER:- ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 19 THIS APPEAL UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 (THE ACT), CHALLENGES THE ORDER DATED 19TH JUN E, 2013 PASSED BY THE INCOME TAX APPELLATE TRIBUNAL (THE TRIBUNAL)FOR THE ASSESSMENT YEAR 2008-09. 2 THE REVENUE URGES THE FOLLOWING QUESTIONS OF LAW FOR OUR CONSIDERATION: '(A) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE O F THE CASE AND IN LAW, THE TRIBUNAL WAS CORRECT IN HOLDING THAT MESNE PROF ITS ARE CAPITAL RECEIPTS IN THE HANDS OF THE ASSESSEE AND NOT REVENUE RECEIP TS CHARGEABLE TO TAX? (B) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCE OF THE CASE AND IN LAW, THE TRIBUNAL WAS CORRECT IN HOLDING THAT MESNE PROF ITS, CANNOT BE PART OF BOOK PROFIT U/S. 15JB, AS IT WAS HELD AS CAPITAL AS SETS ?'. 3. THE IMPUGNED ORDER OF THE TRIBUNAL HAS HELD THA T THE MESNE PROFITS RECEIVED BY THE RESPONDENT-ASSESSEE FOR THE UNAUTHORIZED OCCUPATION OF ITS PREMISES FROM CENTRA L BANK OF INDIA IS A RECEIPT OF CAPITAL NATURE AND THUS NO T TAXABLE. TO REACH THE ABOVE CONCLUSION, THE IMPUGNED ORDER P LACED RELIANCE UPON THE DECISION OF SPECIAL BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., V/SO ACIT 100 ITD (MU M)S.B. THE ISSUE BEFORE THE SPECIAL BENCH IN NARANG OVERSE AS PVT. LTD. (SUPRA) WAS WHETHER THE MESNE PROFITS RECEIVED BY AN ASSESSEE IS REVENUE OR CAPITAL IN NATURE. THE SPECI AL BENCH, IN ITS ORDER PLACED RELIANCE UPON THE DEFINITION O F MESNE PROFITS IN SECTION 2(12) OF THE CODE OF CIVIL PROC EDURE, 1908 WHICH READS AS UNDER:- ' MESNE PROFITS/OF PROPERTY MEANS THOSE 'PROFITS WHIC H THE PERSON IN WRONGFUL POSSESSION OF SUCH PROPERTY ACTUALLY RECEI VED OR MIGHT WITH ORDINARY DILIGENCE HAVE RECEIVED THE RE FROM) TOGE THER WITH INTEREST ON SUCH PROFITS) BUT SHALL NOT INCLUDE PROFITS DUE TO IMPROVEMENTS MADE BY THE PERSON IN WRONGFUL POSSESSION. ' ON THE BASIS OF ABOVE, IT HELD THAT ANY AMOUNT RECEIVED FROM A PERSON IN WRONGFUL POSSESSION OF IT S PROPERTY, WOULD BE MESNE PROFITS AND IT IS CAPITAL IN NATURE. 4. THIS APPEAL WAS ON BOARD ON 14TH JANUARY, 2016. AT THAT TIME, IT WAS POINTED OUT TO US THAT THE REVENUE HAD PREFERRED AN APPEAL AGAINST THE DECISION OF THE SPECIAL BENCH IN NARANG OVERSEAS PVT. LTD. (SUPRA) TO THIS COURT BEING INCOME TAX APPEAL (L) NO. 1791 OF 2008. HOWEVER, THE ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 20 APPEAL OF THE REVENUE WAS DISMISSED FOR NON-REMOVAL OF OFFICE OBJECTIONS ON 25TH JUNE, 2009. IN VIEW OF THE ABOVE, AT THE INSTANCE OF THE REVENUE, THE APPEAL WAS ADJOURNED TO ENABLE THE REVENUE TO FIND OUT WHETHER THE DISMISSED INCOME TAX APPEAL (L) NO.1791 OF 2008 FILED BY THE REVENUE FROM THE ORDER OF THE SPECIAL BENCH IN NARANG OVERSEAS PVT. LTD., (SUPRA), HAS BEEN RESTORED TO THE FILE OF THIS COURT. FURTHER, THE REVENUE WAS DIRECTED TO PUT ON RECORD THE REASON WHY THE REVENUE SEEKS TO CHALLENGE THE IMPUGNED ORDER IN THE FACE OF THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., (SUPRA) WHICH APPEARS TO BE UNDISTURBED. 5. TODAY, WHEN THE APPEAL WAS CALLED OUT, MR. CHHOTARAY, LEARNED COUNSEL APPEARING FOR THE REVETLUE ON INSTRUCTION STATES THAT TILL DATE NO PROCEEDINGS HAD BEEN FILED IN THIS COURT, SEEKING TO RESTORE ITS APPEAL IN THE CASE OF NARANG OVEREAS PVT. LTD., (SUPRA) DISMISSE D ON 25TH JUNE, 2009. HOWEVER, HE FURTHER STATES THAT THE REVENUE IS STILL IN THE PROCESS OF ASCERTAING THE REASON FOR NON-REMOVAL OF OFFICE OBJECTIONS IN INCOM E TAX APPEAL (L) NO: 1791 OF 2008 IN NARANG OVERSEAS PVT. LTD., (SUPRA), LEADING TO DISMISSAL ON 25TH JUNE, 2009. 6. IN SPITE OF OUR ORDER DATED 14RH JANUARY, 2016, TH E REVENUE HAS NOT TAKEN ANY STEPS TO PUT ON AFFIDAVIT THE REASONS WHY IT SEEKS TO PRESS THIS APPEAL. THIS IS PARTICULARLY SO IN THE FACE OF HAVING ACCEPTED THE OR DER OF THE SPECIAL BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., (SUPRA). 7. WE HAD IN DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) V/S CREDIT AGRICOLE INDOSUEZ ITR 102 -377- OBSERVED AS UNDER:- '(V) :-.. ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 21 IN MATTERS OF TAX, JUSTICE REQUIRES THAT THERE MUST BE CERTAINTY OF LAW WHICH PRESUPPOSES EQUAL APPLICATION OF LAW. THUS) W HERE THE ISSUE IN CONTROVERSY STANDS SETTLED BY THE DECISIONS OF THIS COURT OR THE TRIBUNAL IN ANY OTHER CASE AND THE REVENUE HAS ACCEPTED THAT DECISION THEN IN THAT EVENT, THE REVENUE OUGHT NOT TO AGITATE THE IS SUE FURTHER UNLESS THERE IS SOME COGENT JUSTIFICATION SUCH AS CHANGE I N LAW OR SOME LATER DECISION OF AN HIGHER FORUM, ETC., THEN IN SUCH CAS ES APPROPRIATELY THE APPEAL MEMO ITSELF MUST SPECIFY THE REASONS FOR PRE FERRING AN APPEAL FAILING WHICH AT LEAST BEFORE ADMISSION THE OFFICER CONCERNED SHOULD FILE AN AFFIDAVIT POINTING OUT THE REASONS FOR FILING TH E APPEAL. IT IS ONLY WHEN THE COURT IS SATISFIED WITH THE REASONS GIVEN, THAT THE MERITS OF THE ISSUE NEED BE EXAMINED OF PURPOSES FOR ADMISSION (PLEASE SEE I.T.A. NO.37 OF 2013 CIT V. PROCTOR AND GAMBLE HOME PRODUCTS LTD., DATED JANUARY 19,2015 [2015J 377 ITR 66 (BOM); I.TA. NO.269 OF 20 13 CIT V. SBI DATED FEBRUARY 4, 2015 [2015]375 ITR 20(BOM); I.TA. NO. 330 OF 2013 DIT V. CITIBANK N. A. DATED MARCH 11, 2015 - [2015] 377 ITR 69 (BOM).) FILING OF APPEAL UNDER SECTION 260A OF THE ACT IS S ERIOUS ISSUE. THE PARTIES WHO SEEK TO FILE SUCH APPEALS (WHICH ARE NO RMALLY AFTER TWO TIERS OF APPEAL BEFORE THE AUTHORITIES UNDER THE ACT) MUS T DO SO AFTER DUE APPLICATION OF MIND AND NOT RAISE FRIVOLOUS / CONCL UDED ISSUES. THIS IS CERTAINLY EXPECTED OF THE STATE .. ' 8 THUS, ON THE ABOVE GROUND ALONE, WE SEE NO REASON TO ENTERTAIN THE PRESENT APPEAL. 9 HOWEVER, MR. CHHOTARAY, LEARNED COUNSEL APPEARING FOR THE REVENUE, SUBMITTED THAT DECISION OF THE SPECIA L BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., (SUPRA) WILL NOT APPLY AS THE FACTS IN THIS CASE ARE DIFFERENT. MR. CHHOTARAY POINTS OUT THAT LANDLORD- TENANT RELATIONSHIP AS ARISING IN THE PRESENT CASE WAS NOT PRESENT IN NARANG OVERSEAS PVT. LTD., (SUPRA). THUS, HE SUBMITS THAT THIS APPEAL NEEDS TO BE ADMITTED. 10 WE FIND THAT THE ISSUE BEFORE THE SPECIAL BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., (SUPRA) WA S TO DETERMINE THE CHARACTER OF MESNE PROFITS BEING EITHER CAPITAL OR REVENUE IN NATURE. THE SPECIAL BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., (SUPRA) HELD THAT THE SAME IS CAPITAL IN NATURE. THERE IS NO DOUBT THAT THE ISSUE ARISING HEREIN IS ALSO WITH REGARD TO THE CHARACTER OF MESNE PROFITS RECEIVED BY THE RESPONDENT-ASSESSE. IN THIS CASE ALSO, THE AMOUNTS ARE' RECEIVED BY THE ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 22 RESPONDENT-ASSESSEE FROM A PERSON IN WRONGFUL POSSESSION OF ITS PROPERTY I.E. AFTER THE RELATIONSHIP OF LANDLORD AND TENANT HAS COME TO AN END, ONCE THE SPECIAL BENCH ORDER OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD. (SUPRA) HAS TAKEN A VIEW ON THE CHARACTER OF MESNE PROFITS, THEN UNLESS THE REVENUE CHALLENGES THE ORDER OF THE SPECIAL BENCH OF THE TRIBUNAL IT WOULD BE UNFAIR OF THE REVENUE TO PICK AND CHOOSE ASSESSEES WHERE IT WOULD FOLLOW THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., (SUPRA) THE LEAST THAT IS EXPECTED OF THE STATE WHICH PRIDES ITSELF ON RULE OF LAW IS THAT IT TWOULD EQUALLY APPLY THE LAW TO ALL ASSESSEES'S. 11 WE MAKE IT CLEAR THAT WE HAVE NOT EXAMINED THE MERITS OF THE QUESTION RAISED FOR OUR CONSIDERATION. W E ARE NOT ENTERTAINING THE PRESENT APPEAL ON THE LIMITED GROUND THAT THE REVENUE MUST ADOPT AN UNIFORM STAND IN RESPECT OF ALL ASSESSEES. THIS IS MORE SO AS THE ISSUE OF LAW IS SETTLED BY THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., (SUPRA), THE FACT THAT EVEN AFTER TH E DISMISSAL OF ITS APPEAL (L) NO.1791 OF 2008 FOR NON- REMOVAL OF OFFICE OBJECTIONS ON 25TH JUNE, 2009, NO STEPS HAVE BEEN TAKEN BY THE REVENUE TO HAVE THE APPEAL RESTORED, IS EVIDENCE ENOUGH OF THE REVENUE HAVING ACCEPTED THE DECISION OF THE SPECIAL BENCH OF THE TRIBUNAL IN NARANG OVERSEAS PVT. LTD., (SUPRA). THUS, THE QUESTION AS FRAMED IN THE PRESENT FACTS DOES NOT GIVE RISE TO ANY SUBSTANTIAL QUESTION OF LAW. 12 ACCORDINGLY, APPEAL IS DISMISSED. NO ORDER AS TO COSTS. 4. IN THE AFORESAID ORDER, THE HON'BLE JURISDICTIO NAL HIGH COURT DULY CONSIDERED THE DECISION OF THE SPEC IAL BENCH OF THE TRIBUNAL IN THE CASE OF NARANG OVERSEA S PVT. ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 23 LTD., DIT(IT) VS CREDIT AGRICOLE INDOSUEZ 102 ITR 3 77(BOM.) AND HELD THAT SINCE THE DECISION OF THE SPECIAL BEN CH OF THE TRIBUNAL IN THE CASE OF NARANG OVERSEAS PVT. LTD. I S NOT CHALLENGED BY THE REVENUE, THEREFORE, IT IS NOT ACC EPTABLE TO NOT TO FOLLOW THE DECISION OF THE SPECIAL BENCH. TH US, RESPECTFULLY FOLLOWING THE DECISION OF THE HON'BLE HIGH COURTS AND THE RATIO LAID DOWN IN THE CASES DECIDED BY THE TRIBUNAL, WHEREIN, IT WAS HELD THAT MENSE PROFIT IS NOT REVEN UE RECEIPT BUT CAPITAL IN NATURE. IDENTICAL RATIO WAS LAID DOW N IN THE CASE OF NARANG OVERSEAS AND M/S GOODWILL THEATER PV T. LTD., THUS, ON THIS GROUND, THE APPEAL OF THE ASSESSEE DE SERVES TO BE ALLOWED. THIS ORDER WILL BE APPLICABLE TO BOTH T HE YEARS UNDER CONSIDERATION, BEING ON IDENTICAL FACTS. FINALLY THE APPEALS OF THE ASSESSEE ARE PARTLY ALLO WED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 14/09/2017. SD/- (G. MANJUNATHA) SD/- (JOGINDER SINGH) ' # / ACCOUNTANT MEMBER $ # / JUDICIAL MEMBER MUMBAI; + DATED : 04/10/2017 F{X~{T? P.S/. .. , ITA NOS. 2991 & 2992/MUM/2013 SETH PROPERTIES 24 !%$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 01./ / THE RESPONDENT. 3. 2 2 3' , ( ,- ) / THE CIT, MUMBAI. 4. 2 2 3' / CIT(A)- , MUMBAI 5. 5#60' , 2 ,-&, ) , / DR, ITAT, MUMBAI 6. 7 8 / GUARD FILE. ! / BY ORDER, 15-'0' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI