ACIT 19(3), MUMBAI V. VAISHNAV S. PURI (HUF), MUMBAI

ITA 426/MUM/2013

• Counselvise Citation: 42619914 RSA 2013
• Duration Of Justice: 1 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-06-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2008-2009
• Appeal Filed On: 14-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: CPT PRADIP SHAURYA ARYA
• Assessee Lawyers: AASIFA KHAN
• Keywords: Notional interest

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI - F BENCH. . , !'# !'# !'# !'# !$%&' !$%&' !$%&' !$%&' , %! %! %! %! () () () () BEFORE S/SH.D.MANMOHAN, VICE-PRESI DENT & RAJENDRA,ACCOUNTANT MEMBER /. ITA NO.426/MUM/2013, ! ! ! ! * * * * / ASSESSMENT YEAR-2008-09 ACIT 19(3) R.NO.305, 3 RD FLOOR, PIRAMAL CHAMBERS, PARELMUMBAI-400012 V/S. VAISHNAV S PURI(HUF), (PROP KAKS INTERNATION) NCL BLDG. 8 TH FLOOR, BANDRA KURLA COMPLEX BANDRA(EAST),MUMBAI-50 PAN:AACHP9479P ( !+, / APPELLANT) ( -.+, / RESPONDENT) !$) / 0 % / REVENUE BY : CPT. PRADIP SHAURYA ARYA !12 !12 !12 !12 0 0 0 0 % %% % / ASSESSEE BY : MS. AASIFA KHAN ! ! ! ! / // / 2! 2! 2! 2! / DATE OF HEARING : 26-06-2014 3* ! / 2! / DATE OF PRONOUNCEMENT : 26-06-2014 , 1961 / // / !! !! !! !! 254 )1( % %% % &242 &242 &242 &242 (%5 (%5 (%5 (%5 ORDER U/S.254(1)OF THE INCOME-TAX ACT,1961(ACT) PER RAJENDRA,AM %! %! %! %! () () () () !$%&' !$%&' !$%&' !$%&' % %% % ! ! ! ! : CHALLENGING THE ORDER DATED 27.11.2012 OF THE CIT(A )-18, MUMBAI ASSESSING OFFICER(AO) HAS RAISED FOLLOWING GROUNDS OF APPEAL: (1)ON THE FACT AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LEARNED CIT(A) HAS ERRED IN DELETING THE ADDITION IN ANNUAL VALUE OF THE RENTED PROPERTIES ON ACCOUNT OF NOTIONAL INTEREST ON SECURITY DEPOSIT WITHOUT APPRECIATING THE DECISION OF SUPREME COURT IN THE CASE OF BHAGWADAS JAM VS. UNION OF INDIA REPORTED IN 128 ITR 315 AND DECISION OF THE HONBLE ITAT IN THE CASE OF TIVOLI INVESTMENT AND TRADING CO. PVT. LTD., REPORT ED IN 90 ITD 163 MUMBAI. (2)ON THE FACT AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED CIT(A) HAS ERRED IN FOLLOWING THE DECISION OF HONBLE HIGH COURT IN ASS ESSEES OWN CASE FOR A.Y. 2003-04 TO 2005-06 WITHOUT APPRECIATING THE FACTS THAT DECISION OF THE HONBLE HIGH COURT HAS NOT BEEN ACCEPTED BY THE DEPARTMENT. (3)THE APPELLANT PRAYS THAT THE ORDER OF THE CIT(A) ON THE ABOVE GROUND BE SET SIDE AND THAT OF THE AO BE RESTORED. (4)THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 2. ASSESSEE-HUF,ENGAGED IN THE BUSINESS OF RUNNING A B USINESS CENTRE ALONG WITH INFRASTRUCTURE FACILITIES,HAD FILED ITS RETURN OF INCOME ON 09.09. 2008 DECLARING TOTAL INCOME AT RS. 81.74 LAKHS. AO FINALISED THE ASSESSMENT U/S.143(3) OF THE ACT,O N 25.11.2010,DETERMINING THE INCOME OF THE ASSESSEE AT RS.1,34,38,520/-.DURING THE ASSESSMENT PROCEEDINGS,THE AO FOUND THAT THE ASSESSEE HAD RECEIVED SECURITY DEPOSITS OF RS. 1.55 CRORES F ROM THE DIFFERENT PERSONS WHOM PROPERTY WAS RENTED OUT.HE ISSUED A SHOW CAUSE NOTICE TO THE ASS ESSEE TO EXPLAIN AS TO WHY NOTIONAL INTEREST ON SECURITY DEPOSITS RECEIVED BY IT SHOULD NOT BE CHAR GED FOR COMPUTING THE ANNUAL LETTING VALUE (ALV)OF THE PROPERTY.AFTER CONSIDERING THE SUBMISSI ON OF THE ASSESSEE,THE AO HELD THAT ADDITION OF NOTIONAL INTEREST ON THE INTEREST FREE DEPOSIT H AD TO BE TAKEN FOR DETERMINING THE ALV OF THE PROPERTY.HE REFERRED TO THE DECISIONS OF SATYA & CO . AND J.K. INVESTORS. HE ADDED 10% OF THE SECURITY DEPOSITS TO THE INCOME OF THE ASSESSEE AND MADE AN ADDITION OF RS. 15,21,375/-. 2 ITA NO. 426/MUM/2013 VAISHNAV S PURI (HUF) 3. AGGRIEVED BY THE ORDER OF THE AO,THE ASSESSEE PREFE RRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA).IT WAS STATED BEFORE HIM THAT THE T RIBUNAL;VIDE ITS ORDER DATED 12.11.2011 IN ASSESSEES OWN CASE FOR THE AYS 2003-04 TO 2005-06; HAD DECIDED THE ISSUE IN ITS FAVOUR,THAT THE APPEAL FILED BY THE DEPARTMENT BEFORE THE JURISDICT IONAL HIGH COURT AGAINST THE ORDER OF THE TRIBUNAL WAS DISMISSED VIDE ITS ORDER DATED 04.07.2 012.FOLLOWING THE ORDER OF THE HONBLE BOMBAY HIGH COURT,FAA HELD THAT NOTIONAL INTEREST C OULD NOT BE TAKEN INTO ACCOUNT FOR COMPUTING THE ALV OF THE PROPERTY.HE ALLOWED THE AP PEAL FILED BY THE ASSESSEE-HUF. 4. BEFORE US,DEPARTMENTAL REPRESENTATIVE(DR)FAIRLY CON CEDED THAT IN THE JURISDICTIONAL HIGH COURT HAD DECIDED THE ISSUE AGAINST REVENUE.AUTHORISED RE PRESENTATIVE (AR) REFERRED TO THE ORDER OF THE HONBLE JURISDICTIONAL HIGH COURT. WE FIND THAT HON BLE BOMBAY HIGH COURT HAS, IN ASSESSEES OWN CASE HAD DISMISSED THE APPEAL FILED BEFORE THE CIT(A)-19 MUMBAI WHERE THE IDENTICAL ISSUE HAD ARISEN IN EARLIER YEARS. RESPECTFULLY, FOLLOWIN G THE ORDER OF THE HONBLE HIGH COURT, WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE A O. AS A RESULT, APP EAL FILED BY THE AO STANDS DISMISSED. 26 !12 ! 8!! (!9 / 4 ):2 / $!2 ; . ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH ,JUNE, 2014 . (%5 / 3* ! % &!! < =(! 26 $> , 201 4 / 4 ? SD/- SD/- ( . / D.MANMOHAN) ( !$%&' !$%&' !$%&' !$%&' / RAJENDRA) !'# / VICE PRESIDENT %! %! %! %! () () () () /ACCOUNTANT MEMBER / MUMBAI, =(! /DATE:26.06.2014. SK (%5 (%5 (%5 (%5 / // / -2@ -2@ -2@ -2@ A%@*2 A%@*2 A%@*2 A%@*2 / COPY OF THE ORDER FORWARDED TO : 1. ASSESSEE / !+, 2. RESPONDENT / -.+, 3. THE CONCERNED CIT(A)/ B C , 4. THE CONCERNED CIT / B C 5. DR F BENCH, ITAT, MUMBAI / @D!4 -2 , . . &!! . 6. GUARD FILE/ 4! ! .!@2 .!@2 .!@2 .!@2 -2 -2-2 -2 //TRUE COPY// (%5!! / BY ORDER, / ! $! DY./ASST. REGISTRAR , /ITAT, MUMBAI