SAI FRESH LIFE PVT.LTD., MUMBAI V. ITO-10(3)(3), MUMBAI

ITA 3343/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4250 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-07-2013
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 26-06-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 27-04-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JOTNILAKSHMI NAYAK
• Assessee Lawyers: SUBODH L RATNAPARTHI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, M UMBAI . . , . . '# '# '# '# , $ $ $ $ % % % % BEFORE SHRI R.K. GUPTA, JM, AND SHRI N. K. BILLAIYA , AM /. I.T.A. NO.3343/MUM/2011 ( & & & & '& '& '& '& / ASSESSMENT YEAR: 2008-2009) SAI FRESH LIFE PVT. LTD. B-1003, RUNWAL TOWERS, L.B.S. MARG, MULUND (WEST), MUMBAI 400080. / VS. INCOME TAX OFFICER- 10(3) (3), AAYAKAR BHAVAN, MUMBAI. ( $ /. ) * /. PAN/GIR NO. : ABDFS9469F ( (+ / APPELLANT ) : ( ,-(+ / RESPONDENT ) (+ . / APPELLANT BY : SHRI SUBODH L. RATNAPARTHI ,-(+ . / RESPONDENT BY : SHRI JOTNILAKSHMI NAYAK 0$ / DATE OF HEARING : 26.06. 2013 23' 0$ /DATE OF PRONOUNCEMENT : 10.07.2013 4 4 4 4 / O R D E R PER : R.K. GUPTA, JM THIS APPEAL FILED BY THE ASSESSEE AGAINST THE ORDE R OF LD. CIT(A) -22, MUMBAI, DATED 15.02.2011, RELATING TO THE ASSESSMENT YEAR 2008-09. 2 ITA 3343(AY 2008-09) SAI FRESH LIFE VS. ITO 2. THE ASSESSEE HAS RAISED FIVE GROUNDS IN ITS APPE AL ORIGINALLY THEREAFTER, COPY OF THE CONCISE GROUND HAS ALSO BEEN FILED. 3. THE AR HAS REQUESTED THAT INSTEAD OF ORIGINAL GR OUND, CONCISE GROUND BE TAKEN FOR CONSIDERATION. LD. DR HAS ALSO NOT OBJECTED AS THE CONCISE GROUND ARE SIMILAR TO THE ORIGINAL GROUNDS. THEREFORE, INSTEAD OF ORIGINAL GR OUND WE WILL CONSIDER CONCISE GROUND/ MODIFIED GROUND. 4. THE ASSESSEE IS OBJECTING THROUGH ITS MODIFIED G ROUND THAT LD. CIT(A)S ORDER IN CONFIRMING THE ADDITION OF RS. 7,85,773 BY HOLDING THE CONTENTION OF THE AO THAT PROVISION OF SECTION 23(1)(C) ARE NOT APPLICABLE AS THE PROVI SION OF SECTION 23(1)(A) ARE APPLICABLE AS ANNUAL VALUE WAS REQUIRED TO BE COMPUTED IN RESPECT OF UNIT (SHOPS), INDEPENDENTLY. 5. DURING THE ASSESSMENT PROCEEDING THE AO NOTICED THAT ASSESSEE IS HAVING THE HOUSE PROPERTY INCOME FROM THE COMMERCIAL PREMISES GIVEN ON RENT. THE AO NOTED THAT ASSESSEE HAS PURCHASED INDEPENDENT UNITS AT DIFFERENT FLOORS I.E., BASEMENT (AREA BEARING NO. 1,2,3& 4), GROUND FLOOR (7 SHOPS, A-1 TO A-7) AND FIRST FL OOR SIX SHOPS. THE AO FURTHER NOTED THAT OUT OF THESE, ONLY FOUR SHOPS ON GROUND FLOOR I.E., (A-1 TO A-4) WERE LET OUT. ACCORDINGLY, THE AO INVOKED THE PROVISION OF SECTION 23(1)(A), H E CALLED FOR EXPLANATION FROM THE ASSESSEE. IN RESPONSE TO WHICH IT WAS STATED THAT T HE ASSESSEES CASE IS COVERED U/S 23(1) (C), SINCE THE ENTIRE BUILDING IS NOT LET OUT. THE AO HOWEVER WAS NOT SATISFIED. HE STATED THAT THE ASSESSEE COMPANY IS HAVING MANY INDEPENDEN T UNITS(SHOPS). SOME OF THESE ARE GIVEN ON RENT FOR SUBSTANTIAL PART OF THE YEAR AND REMAINING SHOPS WHICH ARE ALSO INDEPENDENT UNITS HAVE REMAINED VACANT FOR THE WHOL E OF THE YEAR. ACCORDINGLY, THE AO WORKED OUT RENT RECEIVABLE U/S 23 (1) (A). THE CIT( A) HAS CONFIRMED THE ACTION OF THE AO. THE CONTENTION RAISED BEFORE THE LOWER AUTHORITIES WERE REITERATED HERE BEFORE THE TRIBUNAL ON BEHALF OF ASSESSEE. IT WAS EXPLAINED THAT THE AS SESSEE HAS PURCHASED ENTIRE BUILDING WHICH HAS NO INDEPENDENT UNITS THEREFORE, PROVISION OF SECTION 23(1) (C) ARE APPLICABLE AND 3 ITA 3343(AY 2008-09) SAI FRESH LIFE VS. ITO NOT PROVISION OF SECTION 23 (1) (A). LD. DR STRONGL Y PLACED RELIANCE ON THE ORDER OF THE AO AND CIT(A). 6. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND THE ORDER OF THE AUTHORITY BELOW, WE FOUND THAT THE ASSESSEE DESERVE TO SUCCEED IN ITS A PPEAL. WE NOTED THAT SECTION 23(1)(A) AND (C) READ AS UNDER:- SECTION 23(1) FOR THE PURPOSES OF SECTION 22, THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE- (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR; OR (C )WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR AND OWING TO SUCH VACANCY THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THER EOF IS LESS THAN THE SUM REFERRED TO IN CLAUSE (A), THE AM OUNT SO RECEIVED OR RECEIVABLE: 7. AFTER GOING THROUGH THESE PROVISIONS, IT IS SEEN THAT THERE IS WORD PROPERTY NOT INDEPENDENT UNITS. THE ASSESSEE HAS PURCHASED A PR OPERTY COMPRISING BASEMENT GROUND FLOOR AND FIRST FLOOR. THOUGH, THERE ARE MANY UNITS / SHOPS BUT ASSESSEE HAS PURCHASED ENTIRE PROPERTY. PART OF THE PROPERTY HAS BEEN RENTED OUT. COPY OF PURCHASE AGREEMENT AS WELL AS LEAVE AND LICENSE AGREEMENT ARE PLACED ON RECORD. IN AGREEMENT IT IS CLEARLY SEEN THAT ASSESSEE HAS PURCHASED THE PROPERTY AND OUT OF THE PROPERTY SOME PORTION HAS BEEN LET OUT ON FIRST FLOOR. THEREFORE, IN OUR VIEW PROVISION OF SECTION 23(1)(C) ARE ATTRACTED AND NOT PROVISION OF SECTION 23(1)(A). ACCORDINGLY, WE DIRE CT THE AO TO DETERMINED THE INCOME OF THE ASSESSEE IN VIEW OF THE PROVISION OF SECTION 23 (1)(C). 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED . 06 &070 )0 8' 4 ITA 3343(AY 2008-09) SAI FRESH LIFE VS. ITO ORDER PRONOUNCED ON 10 TH DAY JULY, 2013 . 4 23' 6 10.07.2013 3 SD/- SD /- ( N. K. BILLAIYA ) ( R.K. GUPTA ) $ / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI: DATED : 10 .07.2013 . /. PRAMOD KUMAR, PS 4 4 4 4 ,0 ,0 ,0 ,0 :'0 :'0 :'0 :'0 / COPY OF THE ORDER FORWARDED TO : 1. (+ / THE APPELLANT 2. ,-(+ / THE RESPONDENT 3. ; ) ( / THE CIT(A) 4. ; / CIT - CONCERNED 5. < ,0 , , / DR, ITAT, MUMBAI 6. =& > / GUARD FILE 4 4 4 4 / BY ORDER, ? ?? ? / 8 8 8 8 ) ) ) ) (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI