TARU LALVANI FAMILY HOLDING, MUMBAI V. ITO-12(3)(4), MUMBAI

ITA 3796/MUM/2010

• Counselvise Citation: [2011] 119 COUNSELVISE.COM (IT) 6693 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-07-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: E
• Assessment Year: 2006-2007
• Appeal Filed On: 11-05-2010
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: VASANTI B PATEL
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER ITA NO. 3796/MUM./2010 (ASSESSMENT YEAR : 2006-07 ) DATE OF HEARING 22.6.2011 TARU LALVANI FAMILY HOLDINGS 4 TH FLOOR, KAMANWALA CHAMBERS SIR P.M. ROAD, FORT MUMBAI 400 001 PAN AAAFT4513F .. APPELLANT V/S INCOME TAX OFFICER WARD-12(3)(4), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... RESPONDENT REVENUE BY : MR. R.K. GUPTA ASSESSEE BY : MS. VASANTI B. PATEL O R D E R PER J. SUDHAKAR REDDY, A.M. THIS APPEAL PREFERRED BY THE ASSESSEE, IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 2 ND FEBRUARY 2010, PASSED BY THE COMMISSIONER (APPEALS)-XXIII, MUMBAI, FOR ASSESSMENT YEAR 2006-0 7. 2. WE HAVE HEARD LEARNED COUNSEL, MS. VASANTI B. PATEL , APPEARING ON BEHALF OF THE ASSESSEE AND LEARNED DEPARTMENTAL REP RESENTATIVE, MR. R.K. GUPTA, APPEARING ON BEHALF OF THE REVENUE. ON A CAR EFUL CONSIDERATION OF THE TARU LALVANI FAMILY HOLDINGS ITA NO.3796/M/2010 2 FACTS AND CIRCUMSTANCES OF THE CASE AND ON PERUSAL OF THE PAPERS ON RECORD, AS WELL AS THE CASE LAWS CITED BEFORE US, WE HOLD A S FOLLOWS:- 3. GROUNDS NO.1 TO 11 ARE ON THE ISSUE OF DISALLOWANCE OF EXPENDITURE UNDER SECTION 14A OF THE INCOME TAX ACT, 1961 (FOR SHORT 'THE ACT' ). THE FIRST APPELLATE AUTHORITY HAS FOLLOWED THE DECISION OF MUMBAI SPECIAL BENCH OF THE TRIBUNAL IN ITO V/S DAGA CAPITAL MANAGEMENT P. LTD., (2008) 119 TTJ (MUM.) 289 (SB). THE HON'BLE JURISDICTIONAL HIGH CO URT IN GODREJ & BOYCE MFG. CO. LTD. V/S DCIT, (2010), 328 ITR 081 (BOM.) , HAS PARTLY REVERSED THE DECISION OF MUMBAI SPECIAL BENCH OF THE TRIBUNAL IN DAGA CAPITA L MANAGEMENT P. LTD. (SUPRA). UNDER THESE CIRCUMSTANCES, WE DEEM IT APPR OPRIATE TO SET ASIDE THE ISSUE TO THE FILE OF ASSESSING OFFICER FOR DENOVO A DJUDICATION IN LINE WITH THE PROPOSITIONS LAID DOWN BY THE HONBLE JURISDICTIONA L HIGH COURT IN GODREJ (SUPRA). ACCORDINGLY, THESE GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 4. GROUNDS NO.12 TO 15, ARE ON THE ISSUE OF TAXABILITY OF COMPENSATION RECEIVED UNDER THE HEAD INCOME FROM HOUSE PROPERTY . THE ASSESSEE HAD RECEIVED COMPENSATION OF ` 6,90,000 FROM TELLABS CHEMICALS PVT. LTD., FOR BEING ALLOWED TO HOUSE A PART OF OFFICE PREMISES TO CONDUCT ITS BUSINESS. TELLABS CHEMICALS PVT. LTD. WAS ALLOWED ACCESS TO O NLY A PORTION OF TOTAL PREMISES, WHICH WAS IN POSSESSION OF THE ASSESSEE A ND THAT TOO ONLY DURING OFFICE HOURS. THE KEYS OF THE OFFICE PREMISES WERE IN THE POSSESSION OF THE ASSESSEE AND TELLABS CHEMICALS PVT. LTD. HAD NO UNH INDERED ACCESS. ON THESE FACTS, WE ARE OF THE CONSIDERED OPINION THAT THE INCOME IN QUESTION WAS RIGHTLY OFFERED TO TAX BY THE ASSESSEE UNDER TH E HEAD INCOME FROM BUSINESS . IT IS ALSO SEEN THAT THE REVENUE HAS BEEN CONSIST ENTLY ACCEPTING THE CLAIM OF THE ASSESSEE THAT THE INCOME IN QUESTI ON IS INCOME FROM BUSINESS AND PROFESSION IN ALL THE OTHER ASSESSMENT YEARS. UNDER THESE CIRCUMSTANCES, WE ALLOW THE CLAIM OF THE ASSESSEE A ND DIRECT THE ASSESSING OFFICER TO ASSESSEE THE SAID INCOME UNDER THE HEAD INCOME FROM BUSINESS . THUS, GROUNDS NO.12 TO 15 ARE ALLOWED. TARU LALVANI FAMILY HOLDINGS ITA NO.3796/M/2010 3 5. IN THE RESULT, ASSESSEES APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 22.7.2011 SD/- D.K. AGARWAL JUDICIAL MEMBER SD/- J. SUDHAKAR REDDY ACCOUNTANT MEMBER MUMBAI, DATED: 22.7.2011 COPY TO : (1) THE ASSESSEE; (2) THE RESPONDENT; (3) THE CIT(A), MUMBAI, CONCERNED; (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, E BENCH, ITAT, MUMBAI. TRUE COPY BY ORDER PRADEEP J. CHOWDHURY ASSISTANT REGISTRAR SR. PRIVATE SECRETARY ITAT, MUMBAI BENCHES, MUMBAI