MURLIDHAR T. TILWANI, MUMBAI V. ACIT 19(3), MUMBAI

ITA 395/MUM/2012

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3271 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 4 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 07-05-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 17-01-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANANDA DUBE
• Assessee Lawyers: M SUBRAMANIAN
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI BEFORE SHRI MAHAVIR SINGH, JUDICIAL MEMBER & SHRI RAJESH KUMAR, ACCOUNTANT MEMBER ITA NO.395/MUM/2012 ASSESSMENT YEAR : 2006-07 MURLIDHAR T TILWANI 21 VEENA BEENA, GR. FLOOR, OPP BANDRA RLY STATION, BANDRA (W) MUMBAI- 400 050 PAN AADPT6134H VS. ACIT 19(3) MUMBAI (APPELLANT) RESPONDENT) APPELLANT BY : SHRI M SUBRAMANIAN RESPONDENT BY : SHRI SACHIDANANDA DUBE DATE OF HEARING : 01 .0 6 .201 6 DATE OF PRONOUNCEMENT : 08 .0 6 . 201 6 O R D E R PER MAHAVIR SINGH, JUDICIAL MEMBER THIS APPEAL BY ASSESSEE IS ARISING OUT OF THE ORDE R OF THE CIT(A) 30, MUMBAI, IN APPEAL NO.CIT(A)-30/ACIT-19(3)/IT-396/09 -10 DATED 17.10.2011. THE ASSESSMENT WAS FRAMED BY THE ACIT 19(3), MUMBAI, FO R A.Y. 2006-07 VIDE HIS ORDER DATED 26.12.2008 U/S. 143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT). TWO INTERCONNECTED ISSUES IN THIS AP PEAL OF THE ASSESSEE ARE AS REGARDS TO THE ORDER OF THE CIT(A) CONFIRMING THE A DDITION OF RENTAL INCOME AT RS.6 LACS AND CONSEQUENTIAL DISALLOWANCE OF INTERES T EXPENSES OF RS.5,19,746/-. 2. WE HAVE HEARD THE RIVAL CONTENTIONS AND HAVE GON E THROUGH THE FACTS AND CIRCUMSTANCES OF THE CASE. FACTS OF THE CASE ARE T HAT THE ASSESSEE HAS SHOWN ITA NO.395/MUM/2012 SHRI MURLIDHAR T TILWANI 2 INCOME FROM HOUSE PROPERTY AT RS 6 LACS I.E. RENT F ROM GODOWN PREMISES AT 132, SV ROAD, KHAR (W). THIS PROPERTY IS RENTED OUT BY THE ASSESSEE TO HIS WIFE. DURING THE COURSE OF ASSESSEES WIFES ASSESSMENT, HER COUNSEL VIDE LETTER DATED 1.12.2008 SUBMITTED THAT THE ASSESSEE HAS NOT RECEIVED ANY IN TEREST FROM HER HUSBAND ON THE AMOUNTS ADVANCED AND REASON FOR NOT CHARGING INTERE ST WAS ALSO THAT THE RENT FROM THE GODOWN PREMISES IS CHARGED AT RS. 6 LACS AS AGA INST THE ACTUAL RENT OF RS.12 LACS. THE RELEVANT PORTION OF THE LETTER IS PRODUC ED IN THE ASSESSMENT ORDER, THE SAME IS AGAIN REPRODUCED BELOW FOR THE SAKE OF CLAR ITY:- ASSESSEE HAS NOT RECEIVED ANY INTEREST FROM HER HU SBAND MR. MURLIDHAR T TILWANI OR ANY OTHER PARTY. BUT MAJORITY OF THE LOAN IS GIVEN TO ASSESSEES HUSBAND. THIS IS BECAUSE ASSESSEES HUS BAND HAS GIVEN THE GODOWN PREMISES AT 132, S V ROAD, KHAR (W), MUMBAI - 400 052, TO THE ASSESSEE AND TAKES THE RENT AT RS.6,00,000/-. NORM ALLY, THE RENT SHOULD HAVE BEEN APPROXIMATELY RS.12,00,000/- BUT ASSESSEE HAS GIVEN RS.6,00,000/- AND ALSO MUTUALLY AGREED WITH HER HUS BAND THAT SHE WILL NOT CHARGE INTEREST FOR LOAN GIVEN. HENCE, THE ASS ESSEE HAS NOT RECEIVED INTEREST FROM HER HUSBAND MR. MURLIDHAR T TILWANI. THE AO GOING BY THESE FACTS MADE ADDITION TO THE IN COME FROM HOUSE PROPERTY AMOUNTING TO RS. 6 LACS BY TREATING THE TOTAL RENT AS 12 LACS FOR THE AFORESAID PREMISES. 3. SIMILARLY, THE AO HAS NOT ALLOWED THE CLAIM OF D EDUCTION OF INTEREST AMOUNTING TO RS.5,19,746/-. THE CIT(A) ALSO CONFIR MED THE ACTION OF THE AO BY STATING THE REASON THAT THE ASSESSEE HAS DISCLOSED LESS RENTAL INCOME BY A SUM OF RS.6 LACS AND HE HAS ALSO NOT ALLOWED ANY CONSEQUEN TIAL DEDUCTION U/S. 24 OF THE ACT. FURTHER, THE INTEREST DISALLOWANCE WAS SET AS IDE TO THE FILE OF THE AO FOR VERIFICATION OF FACTS FROM RECORDS. AGGRIEVED AGAI NST THE ACTION OF THE LOWER AUTHORITIES THE ASSESSEE HAS COME IN SECOND APPEAL BEFORE THE TRIBUNAL. ITA NO.395/MUM/2012 SHRI MURLIDHAR T TILWANI 3 4. BEFORE US NOW THE LEARNED COUNSEL FOR THE ASSESS EE HAS CONCEDED THE ADDITION OF RENTAL INCOME IN THE HANDS OF THE ASSES SEE AMOUNTING TO RS.6 LACS BUT HE REQUESTED FOR CONSEQUENTIAL DEDUCTION U/S. 24 OF THE ACT. ON QUERY FROM THE BENCH, THE LEARNED SR. DR FAIRLY CONCEDED THAT YES THE ASSESSEE IS ENTITLED FOR DEDUCTIONS U/S. 24 OF THE ACT ON THE ABOVE ADDITION BECAUSE INCOME IS ASSESSED AS RENT. IN VIEW OF THE ABOVE CONCESSION GIVEN BY BOT H THE SIDES, WE DIRECT THE AO TO ALLOW DEDUCTION U/S. 24 OF THE ACT ON THE RENTAL IN COME AND ALSO CONSIDER THE CLAIM OF DEDUCTION OF INTEREST FROM HOUSE PROPERTY AFTER VERIFYING THE EVIDENCES. THE AO IS DIRECTED ACCORDINGLY. 5. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 8 TH JUNE 2016. SD/- SD/- (RAJESH KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED : 8 TH JUNE, 2016. SA COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE C I T(A), MUMBAI. 4. THE C I T 5. THE DR, B BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// (ASSISTANT REGISTRAR) INCOME TAX APPELLATE TRIBUNAL, MUMBAI