ITO 12(3)(4), MUMBAI V. RACHNATRUST, MUMBAI

ITA 3567/MUM/2009

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 49371 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 20-06-2011
• Assessment Year: 2004-2005
• Appeal Filed On: 01-06-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: C G K NAIR
• Keywords: Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI R.S.SYAL, AM AN D SHRI R.S.PADVEKAR, JM ITA NOS.3567 & 3568/MUM/2009 : ASST.YEARS 2004-2005 & 2005-2006 THE INCOME TAX OFFICER WARD 12(3)(4) MUMBAI. VS. M/S.RACHANA TRUST 601 COMMERCE HOUSE N.M.ROAD, FORT MUMBAI 400 001. PAN : AAATR0025J. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI C.G.K.NAIR RESPONDENT BY : --- NONE --- O R D E R PER R.S.SYAL (AM) : THESE TWO APPEALS BY THE REVENUE ARIS E OUT OF THE ORDERS PASSED BY THE COMMISSIONER OF INCOME-TAX (APPEALS) ON 20.03.2009 IN RELATI ON TO THE ASSESSMENT YEARS 2004-2006 AND 2005-2006. SINCE BOTH TH E APPEALS ARE BASED ON IDENTICAL FACTS AND COMMON GROUNDS OF APPEAL, WE ARE, TH EREFORE, DISPOSING THEM OFF BY THIS CONSOLIDATED ORDER FOR TH E SAKE OF CONVENIENCE. 2. THE ONLY EFFECTIVE GROUND TAKEN IN BOTH THE APPEALS IS AS UNDER:- ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A) HAS ERRED IN DIRECTING THE ASSESSING OFFICER TO DETERMINE THE ANNUAL LETTING VALUE ON THE BASIS OF THE STANDARD RENT AND IN THE ABSENCE OF STANDARD RENT, TO TAKE TH E MUNICIPAL RETEABLE VALUE FOR THE PURPOSE OF COMPUTING THE INCOME FR OM HOUSE PROPERTY, HOLDING THAT THE ASSESSING OFFICER CANNOT TAKE 15% OF THE DEPOSIT OF RS.2.5 CRORES RECEIVED BY THE ASSESSEE FROM TH E PURCHASERS TO DETERMINE THE ANNUAL LETTING VALUE OF THE PROPERTY. 3. FILTERING OUT UNNECESSARY DETAILS IT IS SEEN THAT THE ASSESSING OFFICER COMPUTED INCOME FROM HOUSE PROPERTY BY ENHANCING ANNUAL LETTING VALUE (ALV) ITA NOS.3567 & 3568/MUM/2009 M/S.RACHANA TRUST. 2 WITH THE NOTIONAL INTEREST ON SECURITY DEPOS IT OF RS.2.5 CRORES. THE LEARNED CIT(A) OVERTURNED THE ASSESSMENT ORDER ON THIS ISSUE. 4. WE HAVE HEARD THE LEARNED DEPART MENTAL REPRESENTATIVE AND PERUSED THE RELEVANT MATERIAL ON RECORD . THERE IS NO APPEARANCE FRO M THE SIDE OF THE ASSESSEE DESPITE NOTICE. IT IS FOUND THAT THE QUESTI ON RAISED IN THESE AP PEALS, AS REPRODUCED THROUGH THE GROUND NOTICED A BOVE, 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 C OURT IN THE CASE OF CIT VS. J.K.INVESTORS (BOMBAY) LTD. [(2001) 248 ITR 723 (BOM.)] HAS HELD THAT IN CASE OF INTEREST FREE DEPOSIT FROM LANDLORD, THE ALV CANNOT INCLUDE HYPOTHE TICAL INTEREST. IN VIEW OF THESE JUDGEMENTS IT BECOMES CLEAR THAT THE VIEW TAKEN BY THE LEARNED CIT(A) DOES NOT CALL FOR ANY INTERFERENCE. WE, THEREFORE, UPHOLD THE SAME. 5. IN THE RESULT, BOTH THE APPEALS STAND DISMISSED. ORDER PRONOUNCED ON THIS 24 TH DAY OF JUNE, 2011. SD/- SD/- ( R.S.PADVEKAR ) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI : 24 TH JUNE, 2011. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A) -XII, MUMBAI. 5. THE DR/ITAT, MUMBAI. ITA NOS.3567 & 3568/MUM/2009 M/S.RACHANA TRUST. 3 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR, ITAT, MUMBAI.