DCIT (OSD) I CEN RG 7, MUMBAI V. RAMGOPAL GANPATRAI & SONS P.LTD, MUMBAI

ITA 3273/MUM/2013

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83481 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-08-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 29-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: TRIPURA SUNDARI J K GARG
• Assessee Lawyers: AJIT SHETTY
• Section: 56

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - D BENCH. , . .. . ' ' ' ' . .. .# # # # . .. . ' ' ' ' . .. .$ $ $ $ , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & DR. S.T.M . PAVALAN,JUDICIAL MEMBER /. ITA NO.3273/MUM/2013, $ $ $ $ % % % % / ASSESSMENT YEAR-2010-11 DCIT (OSD)-I, ROOM NO. 413, 4TH FLOOR, AAYAKAR BHAVAN, M.K.MARG, MUMBAI-4007020 VS RAMGOPAL GANPATRAI & SONS P. LTD. PLOT NO.7, CHANDIVALI FARMS ROAD, CHANDIVALI, MUMBAI-400072 PAN:AAACR7642G ( &' / APPELLANT) ( ()&' / RESPONDENT) /. ITA NO.3274/MUM/2013, $ $ $ $ % % % % / ASSESSMENT YEAR-2010-11 DCIT (OSD) - I, CENTRAL RANGE-7,ROOM NO. 413, 4TH FLOOR, AAYAKAR BHAVAN, M.K.MARG, MUMBAI-4007020 VS M/S RAMRIKHDAS BALKISON & SONS P. LTD., PLOT NO.7, CHANDIVALI FARMS ROAD, CHANDIVALI, MUMBAI-400072 PAN:AAECR3690L ( &' / APPELLANT) ( ()&' / RESPONDENT) + , / REVENUE BY : SMT. TRIPURA SUNDARI J.K.GARG $-. + , / ASSESSEE BY : SHRI AJIT SHETTY $ $ $ $ + ++ + . . . . / DATE OF HEARING : 04-08-2014 /0% + . / DATE OF PRONOUNCEMENT : 04-08-2014 $ $ $ $ , + ++ + 254(1) .1. .1. .1. .1. 2 2 2 2 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM $ $ $ $ : CHALLENGING THE ORDERS OF THE CIT(A)-40,MUMBAI,FOLL OWING GROUNDS OF APPEAL HAVE BEEN RAISED BY THE ASSESSING OFFICERS (AO.S.): 1. ON THE FACTS & IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING THE ADDITION OF RS. 65,70,242/- MADE IN RESPECT OF THE INCOME FROM HOUSE PROPERTY AND ALSO DIRECTED TO ALLOW EXPENSES CLAIMED ON THE SAME. 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN ALLOWING THE CLAIM OF EXPENSES AGGREGATING TO RS. 19,212/- ON AC COUNT OF PROFESSIONAL TAX OF RS. 1700/- BANK CHARGES OF RS. 494/-, ROC CHARGES OF RS. 11,400/- A ND AUDIT FEES OF RS. 5,618/- WHICH ARE NOT ALLOWABLE AS EXPENSES U/SS. 24 OF THE I.T. ACT, 196 1. 3. THE APPELLANT CRAVES TO LEAVE TO ADD, TO AMEND AND/ OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 4. THE APPELLANT, THEREFORE, PRAYS THAT ON THE GROUNDS STATED ABOVE, THE ORDER OF THE CIT(A)-40, MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING O FFICER RESTORED. 2. AS THE IDENTICAL GROUNDS OF APPEAL HAVE BEEN RAISED BY THE AO.S IN BOTH THE CASES, THEREFORE, FOR THE SAKE OF CONVENIENCE,WE ARE DECIDING THE APPEALS BY A SINGLE COMMON ORDER.THE DETAILS OF 2 ITA NO.3273 & 3274/MUM/2013 RAMGOPAL GANPATRAI & SON S P. LTD. & ORS. DATES OF FILING OF RETURNS,INCOMES RETURNED,DATES O F ASSESSMENT,ASSESSED INCOMES, DATES OF ORDERS OF THE CIT(A)CAN BE SUMMARISED AS UNDER: ASSESSEE RETURN FILED ON RETURNED INCOME ASSESSMENT DATE ASSESSED INCOME DT.OF CIT(A) ORDER RAMGOPAL GANPATRAI & SONS P. LTD. 15.10.2010 23,734/- 26.12.2012 45,99,170/- 13.02.20 13 M/SRAMRIKHDAS BALKISON & SONS P. LTD. 15.10.2010 3,82,029/- 26.12.2012 22,54,860/- 13.02. 2013 ITA NO.3273/MUM/2013-ASSESSMENT YEAR-2010-11: 3. OUT OF THE FOUR GROUNDS OF APPEAL, THE EFFECTIVE GR OUND OF APPEAL IS ABOUT DELETING THE ADDITION MADE IN RESPECT OF THE INCOME FROM HOUSE PROPERTY A ND DIRECTION GIVEN TO ALLOW THE EXPENSES CLAIMED.DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT THE ASSESSEE HAD ACQUIRED TWO CLASS A SHARES OF THE COMPANY M/S SAMUDRA GAURAV APARTMENT PVT. LTD. IN THE YEAR 1980, THAT BY VIRTUE OF THOSE SHARES,IT WAS ENTITLED TO USE AND OCCUPY T WO FLATS, THAT THOSE FLATS WERE ORIGINALLY RENTED OUT BY THE ASSESSEE TO B.R. RUIA FOR A MONTHLY RENT OF RS. 2500 PER MONTH PER FLAT, THAT AFTER THE DEATH OF D. RUIA RENTAL RIGHT IN THE ABOVE FLATS CA ME TO BE VESTED WITH ASHA T. RUIA AND VIDHI D. RUIA BY VIRTUE OF THE WILL OF B.R. RUIA,THAT DURING THE RELEVANT PERIOD, THOSE FLATS WERE LET OUT TO TWO LADY MEMBERS OF RUIA FAMILY AT THE ORIGINAL REN T OF RS. 2500/- PER MONTH PAR FLAT. LOOKING INTO SIZE OF THE FLATS,THEIR LOCATION AND OTHER FAC ILITIES AVAILABLE, THE AO FOUND THAT THE RENT WAS T OO LOW.ACCORDINGLY,HE ASKED THE ASSESSEE TO EXPLAIN AS TO WHY THE ANNUAL LETTING VALUE (ALV) OF THE FLATS SHOULD NOT BE DETERMINED WITHIN THE MEANI NG OF SECTION 23(1) OF THE ACT.IN RESPONSE, IT WAS ARGUED THAT THE PROPERTIES BEING OWNED UNDER TH E MAHARASHTRA RENT CONTROL ACT, ALV COULD NOT BE VESTED IN EXCESS OF STANDARD RENT.AO REJECTE D THE ARGUMENT AND FOLLOWING THE ORDERS FOR THE AY.S 2005-06 AND 2006-07 DETERMINED THE ALV. 4. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).HE REFERRED TO THE ORDER OF THE ITA T MUMBAI,DELIVERED IN SSESSEE'S OWN CASE FOR THE AY 2007-08 AND 2008-09 AND DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. DEPARTMENTAL REPRESENTATIVE (DR)LEFT THE ISSUE TO T HE DISCRETION OF THE BENCH. AUTHORISED REPRES -ENTATIVE(AR)STATED THAT SIMILAR ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE TRIBUNAL IN THE AY.2005-06(ITA/696/M/2009-DATED26.03.2010),AY.2006- 07(ITA/01/MUM/20010 DATED 31.08. 2010)AND AY.2007-08(ITA/5515/MUM/2010-DATED 21.09.2 011).WE HAVE HEARD THE RIVAL SUBMISSION AND PERUSED THE MATERIAL BEFORE US.WE FI ND THAT TRIBUNAL,IN ITS ORDER DATED 26.03. 2010 (SUPRA),IN PARAGRAPH NO. 6 TO 9 HAS HELD AS UNDER: IN THIS CASE IT IS ALSO ON RECORD THAT THE PROPERT Y IS A TENANTED PROPERTY AND THE TENANT IS A PROTECTED TENANT AS PER THE ORDERS OF THE COURT. SI NCE THE RENT RECEIVED BY THE ASSESSEE IS MORE THAN THE STANDARD RENT/MUNICIPAL RATEABLE VALUE THE A.O. HAS NO OPTION THAN TO ACCEPT THE RENT RECEIVED AS PER THE EXISTING JUDICIAL PRINCIPLE ON THIS ISSUE. IN VIEW OF THIS WE ARE NOT IN AGREEMENT WITH THE ORDERS OF THE A.O. AND CIT(A) AND DIRECT H IM TO ACCEPT THE RENT OFFERED BY THE ASSESSEE. IN VIEW OF THIS GROUND NO.1 IS ALLOWED. GROUND NO.2 PERTAINS TO THE ALLOWANCE OF ESTABLISHM ENT AND STATUTORY EXPENSES NOT ALLOWED BY THE A.O. WHILE REDETERMINING THE ANNUAL LETTERING VALUE . IT IS SEEN FROM THE RECORD THAT THE ASSESSEE HAS BE EN CALMING THESE EXPENSES AS PART OF COMPUTATION OF HOUSE PROPERTY INCOME. AS SEEN FROM THE RECORD A .O. IN A.Y. 2004-05 HAS ALLOWED THE 3 ITA NO.3273 & 3274/MUM/2013 RAMGOPAL GANPATRAI & SON S P. LTD. & ORS. EXPENDITURE AND ALSO IN EARLIER YEARS. IN VIEW OF T HIS THE A.O. IS DIRECTED TO ALLOW THE EXPENSES AS CLAIMED, GROUND IS CONSIDERED ALLOWED. SIMILAR FACTS EXIST IN ITA NO. 696/MUM/2009 AND HER E ALSO THE TWO PROPERTIES OWNED BY THE ASSESSEE COMPANY ARE SUBJECTED TO PROTECTED TENANCY UNDER THE MAHARASHTRA RENT CONTROL ACT, 1999 BEING DEVOLVED ON MR. T.B. RUIA AND MRS. ASHA RUIA AND MRS. VIDHI D. RUIA AFTER THE DEATH OF M. T.B. RUIA. HERE ALSO THE PROPERTY WAS LET OUT FROM 01.10.1987 AND THE DEPARTMENT HAS BEEN ACCEPTING THE SAME IN ALL THE EARLIER YEARS. FOR TH E REASONS DISCUSSED IN ITA NO. 697/MUM/2009 WE DIRECT THE A.O. TO ACCEPT THE RENT RECEIVED UNDE R THE PROVISIONS OF SECTION 23(1) AND REDETERMINE THE HOUSE PROPERTY INCOME ACCORDINGLY. A.O. ALSO IS DIRECTED TO ALLOW THE ESTABLISHMENT AND STATUTORY EXPENSES WHICH ARE BEIN G ALLOWED IN EARLIER YEARS. ACCORDINGLY THE GROUNDS ARE CONSIDERED ALLOWED. RESPECTFULLY, FOLLOWING THE SAME, WE DECIDE THE EFF ECTIVE GROUND OF APPEAL AGAINST THE AO. ITA NO.3274/MUM/2013 THE FACTS OF THE CASE ARE IDENTICAL TO THE FACTS OF THE EARLIER APPEAL THE ONLY DIFFERENCE IS OF AMOUN T INVOLVED. FOLLOWING THE ABOVE,WE REJECT THE EFFECTI VE GROUND OF APPEAL FILED BY THE AO IN THE CASE OF M/S.RAMRIKHDAS BALKISON & SONS P. LTD. AS A RESULT,APPEALS FILED BY THE AO.S IN BOTH THE ABOVE CASES STAND DISMISSED. 3.4$-. VF/KDKJH 5 6 + 1 NKSUKSA SA UK 7 + . 89. ORDER PRONOUNCED IN THE OPEN COURT ON 4 TH AUGUST,2014 . 2 + /0% : ;$ 4 VXLR , 201 4 0 + 1 < SD/- SD/- ( . .. . ' ' ' ' . .. .# # # # . .. . ' ' ' ' . .. .$ $ $ $ / DR. S.T.M.PAVALAN) ( / RAJENDRA) / JUDICIAL MEMBER /ACCOUNTANT MEMBER / MUMBAI, ;$ /DATE: 04.08.2014. SK 2 2 2 2 + ++ + (.= (.= (.= (.= > > > >=%. =%.=%. =%. / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / &' 2. RESPONDENT / ()&' 22 3. THE CONCERNED CIT(A)/ ? @ , 4. THE CONCERNED CIT / ? @ 5. DR D BENCH, ITAT, MUMBAI / =A1 (.$ MH MHMH MH , . . . 6. GUARD FILE/ 1 3 )=. )=. )=. )=. (. (.(. (. //TRUE COPY// 2$ / BY ORDER, B / 8 DY./ASST. REGISTRAR , /ITAT, MUMBAI