M/s. MAFATLAL INDUSTRIES LTD., MUMBAI V. DCIT SPL. Rg. - 20, MUMBAI

ITA 4596/MUM/2005

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8333 (ITAT-MUMBAI)
• Duration Of Justice: 9 year(s) 2 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 22-08-2014
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: I
• Next Hearing Date: 25-06-2014
• Assessment Year: 1998-1999
• Appeal Filed On: 21-06-2005
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Revenue expenditure
• Section: 143(3); 37(1)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH I, MUMBAI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 4596/MUM/2005 ASSESSMENT YEAR: 1998-99 MAFATLAL INDUSTRIES LTD. MAFATLAL HOUSE 1 ST FLOOR, BACKBAY RECLAMATION MUMBAI- 400 020 PAN: AAACM 2813 L VS. DCIT SR-20, 5 TH FLOOR, AAYAKAR BHAVAN MUMBAI- 400 020 (APPELLANT) (RESPONDENT) ITA NO. 4339/MUM/2005 ASSESSMENT YEAR: 1998-99 DCIT CIR. 6(3) 5 TH FLOOR, ROOM NO. 522 AAYAKAR BHAVAN MUMBAI-20 VS. MAFATLAL INDUSTRIES LTD. MAFATLAL HOUSE 1 ST FLOOR, BACKBAY RECLAMATION MUMBAI- 400 020 PAN: AAACM 2813 L (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI GIRISH DAVE REVENUE BY : SHRI SANTOSH KUMAR DATE OF HEARING : 25.06.2014 DATE OF PRONOUNCEMENT : 22.08.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THESE CROSS APPEALS FILED BY THE ASSESSEE AND THE REVENUE ARE DIRECTED AGAINST THE COMMON ORDER OF THE LD.CIT(A)-26, MUMBA I DATED 29.03.2005 FOR THE ASSESSMENT YEAR 1998-99. ASSESSEES APPEAL-ITA NO. 4596/MUM/2005 2. GROUNDS NO. 1 TO 6 RAISED IN THE APPEAL FILED BY THE ASSESSEE RELATE TO THE ISSUE OF DISALLOWANCE OF INTEREST OF RS.1,53,12,764 /- BEING ESTIMATED INTEREST @ 15 PERCENT ON THE ADVANCES MADE TO VARIOUS COMPANIES/O THER CONCERNS. IN THE ASSESSMENT FRAMED U/S 143(3) OF THE INCOME TAX ACT, THE AO MADE DISALLOWANCE OF ESTIMATED INTEREST OF RS.1,53,12,764/- IN RESPECT O F ADVANCES MADE TO FIVE PARTIES ITA NO. 4596/MUM/2005 ITA NO. 4339/MUM/2005 MAFATLAL INDUSTRIES LTD. ASSESSMENT YEAR: 1998-99 2 NAMELY SILVIA APPAREL LTD., MAFATLAL S.A. INTEX LTD ., MAFATLAL V.K. INTEX LTD. AND MEIL. ON APPEAL, THE LD.CIT(A) CONFIRMED THE DISALL OWANCE BASED ON HER PREDECESSORS DECISION IN THE ASSESSEES OWN CASE F OR THE A.Y. 1993-94 AND 1997-98. AGGRIEVED BY THE IMPUGNED DECISION, THE ASSESSEE HA S RAISED THIS GROUND IN THE APPEAL BEFORE US. 2.1 AT THE OUTSET IT IS OBSERVED THAT THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 1993-94 SET ASIDE THE ORDER OF THE LD.CIT( A) AND REMITTED A SIMILAR/IDENTICAL ISSUE BACK TO THE FILE OF THE AO FOR FRESH ADJUDICA TION. FURTHER, THE TRIBUNAL, FOR THE A.Y. 1997-98, ON A SIMILAR ISSUE, BY FOLLOWING THE TRIBUNALS ORDER FOR THE A.Y. 1992- 93, REMITTED THE MATTER BACK TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN THE LIGHT OF EARLIER DECISIONS OF THE TRIBUNAL AS WELL AS THE JUDGMENTS OF THE HONBLE APEX COURT IN THE CASE OF S.A. BUILDERS VS. CIT (2007) 288 ITR 1 (SC) . IN VIEW OF THE FACT THAT THE ORDERS OF THE THEN CIT(A) RELIED ON BY THE LD.CIT(A) FOR THE IMPUGNED DECISION HAS BEEN SET ASIDE BY THE TRIBUNAL, WE ARE OF THE CONSIDERED VIEW THAT IT IS JUST AND PROPER THAT THIS ISSUE IS ALSO SET ASIDE T O THE FILE OF THE AO FOR FRESH ADJUDICATION WITH THE SIMILAR DIRECTIONS OF THE TRI BUNAL IN THE ASSESSEES OWN CASES FOR THE A.YS. 1993-94 & 1997-98. WE DIRECT AND ORDE R ACCORDINGLY. THUS, GROUNDS NO. 1 TO 6 ARE ALLOWED FOR STATISTICAL PURPOSE . 3. GROUNDS NO. 7 TO 9 RELATE TO THE ISSUE OF DISALL OWANCE OF DEDUCTION OF EXPENSES AMOUNTING TO RS.7,83,29,790/- ON ACCOUNT O F DEFERRED REVENUE EXPENDITURE. 3.1 IN THE ASSESSMENT ORDER, THE AO TREATED THE EXP ENSES ON ACCOUNT OF RETRENCHMENT COMPENSATION, RETRENCHMENT COMPENSATIO N (EX-GRATIA), VOLUNTARY RETIREMENT COMPENSATION & PROFESSIONAL FEES FOR MAN AGEMENT CONSULTANCY AS CAPITAL IN NATURE AND DISALLOWED THE SAME. ON APPEAL, THE L D.CIT(A) WAS OF THE OPINION THAT THE BENEFIT OF THE SAID EXPENDITURE COULD BE SAID T O HAVE ACCRUED FOR MORE THAN ONE YEAR AND HELD THAT 1/5 TH OF THE EXPENDITURE SHOULD BE ALLOWED AS DEDUCTION IN THIS YEAR AND THE BALANCE 4/5 TH SHALL BE ALLOWED IN THE NEXT FOUR YEARS IN ACCORDA NCE WITH THE PROVISIONS OF SECTION 35DDA OF THE INCOME TAX A CT. 3.2 HAVING HEARD BOTH THE SIDES AND PERUSED THE MAT ERIAL ON RECORD IT IS PERTINENT TO MENTION THAT BEFORE THE INTRODUCTION OF SECTION 35DDA, THE LEGAL DICTUM IS VERY ITA NO. 4596/MUM/2005 ITA NO. 4339/MUM/2005 MAFATLAL INDUSTRIES LTD. ASSESSMENT YEAR: 1998-99 3 CLEAR THAT THE ASSESSEE CAN CLAIM THE EXPENDITURE I NCURRED ON ACCOUNT PAYMENT MADE FOR THE VRS WHICH ARE IN THE NATURE OF BUSINES S EXPENDITURE AND ARE DEDUCTIBLE U/S.37. THEREFORE, TILL THE INTRODUCTION OF NEW PROVISIONS UNDER SECTION 35 DDA, THE ASSESSEE CAN CLAIM SUCH EXPENDITURE AS REV ENUE EXPENDITURE. THIS PROPOSITION IS SUPPORTED BY VARIOUS DECISIONS OF TH E TRIBUNAL AND HIGH COURTS. IT IS PERTINENT TO MENTION THAT THE DECISION OF THE TRIBU NAL IN THE CASE OF G.E.MEDICAL SYSTEMS INDIA (P) LTD (ITA NO 1073/PN/2003) IS DIRE CTLY APPLICABLE TO THE FACTS OF THE ASSESSEE IN THE CONTEXT OF SIMILAR FACTS INVOLV ED IN BOTH THE CASES WHEREIN THE TRIBUNAL HAS ALLOWED THE CLAIM OF THE ASSESSEE THAT THE IMPUGNED EXPENDITURE IS FOR THE PURPOSE OF THE BUSINESS AND DEDUCTIBLE U/S.37 O F THE ACT. THE TRIBUNAL, IN THE SAID CASE HAS TAKEN NOTE OF THE DECISIONS OF THE BO MBAY HIGH COURT IN THE CASE OF CIT VS. BHOR INDUSTRIES LTD (2003) 264 ITR 180 AND MADRAS HIGH COURT IN THE CASE OF MADURA COATS VS DCIT 273 ITR 32. IN VIEW OF THE AFOREMENTIONED DISCUSSION, WE DIRECT THE AO TO ALLOW THE EXPENDITURE AS REVENUE E XPENDITURE, ELIGIBLE FOR DEDUCTION U/S 37(1) OF THE ACT, AFTER VERIFICATION OF THE DET AILS OF EXPENDITURE CLAIMED BY THE ASSESSEE. ACCORDINGLY, GROUNDS NO 7-9 ARE ALLOWED. 4. IN GROUND NO. 10, THE ASSESSEE HAS AGITATED THE DECISION OF THE LD.CIT(A) CONFIRMING THE ADDITION OF ESTIMATED AMOUNT OF RS.2 5,00,000/- ON ACCOUNT OF VALUATION OF CLOSING STOCK OF FINISHED GOODS. ACCOR DING TO THE AO, THE VALUATION OF CLOSING STOCKS OF FINISHED GOODS IN RESPECT OF TEXT ILE DIVISION OF ERSTWHILE MAFATLAL FINE SPG & MFG CO LTD., WAS TO BE AT MARKET VALUE W HICH INCLUDES SELLING PRICE PLUS EXCISE DUTY. ACCORDINGLY, THE AO INCLUDED AN AMOUNT OF RS.25,00,000/- ON ACCOUNT OF EXCISE DUTY VALUATION OF CLOSING STOCK OF FINISH ED GOODS. ON APPEAL, THE LD.CIT(A) CONFIRMED THE SAID DISALLOWANCE/ADDITION BASED ON H ER PREDECESSORS DECISION FOR THE A.Y. 1992-93 AND THE DECISION OF TRIBUNAL FOR THE A .Y. 1987-88. AT THE OUTSET, IT IS OBSERVED THAT THE TRIBUNAL IN THE ASSESSEES OWN CA SE FOR THE A.Y. 1994-95, 1995- 96, 1997-98 & 2003-04 HAS DECIDED AN IDENTICAL AND SIMILAR GROUND AGAINST THE ASSESSEE. HOWEVER, ALTERNATE CLAIM FOR ADDITION TO THE OPENING STOCK HAS BEEN ALLOWED BY THE TRIBUNAL. FOLLOWING THE SAID ORDERS OF THE TRIBUNAL, WE DIRECT THE AO TO RE-COMPUTE THE VALUE OF CLOSING STOCK IN LINE WI TH THE PRINCIPLES LAID DOWN BY THE TRIBUNAL IN THE SAID ORDERS. THUS, WE SET ASIDE THI S MATTER TO THE FILE OF THE AO FOR ITA NO. 4596/MUM/2005 ITA NO. 4339/MUM/2005 MAFATLAL INDUSTRIES LTD. ASSESSMENT YEAR: 1998-99 4 THE LIMITED PURPOSE OF FOLLOWING THE GUIDELINES GIV EN IN THE EARLIER YEARS. GROUND NO 10 IS ALLOWED FOR STATISTICAL PURPOSE. 5. GROUNDS NO. 11 TO 16 ARE NOT PRESSED BY THE ASSE SSEE AND HENCE THE SAME DO NOT REQUIRE ADJUDICATION. 6. GROUND NO. 17 RELATES TO THE DECISION OF THE LD. CIT(A) CONFIRMING THE ACTION OF THE AO IN BRINGING TO TAX A SUM OF RS.15,584/- A S INTEREST ON GOVERNMENT SECURITIES. IT IS OBSERVED THAT SIMILAR ADDITIONS H AVE BEEN CONFIRMED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.YS. 1991-92, 1 993-94, 1994-95, 1995-96 & 1997-98. IN THE ABSENCE OF ANY DISTINGUISHING FACTS BROUGHT BY THE PARTIES, FOLLOWING THE SAID ORDERS OF THE TRIBUNAL, THE IMPUGNED ADDIT ION CONFIRMED BY THE LD.CIT(A) IS UPHELD. THUS, GROUND NO. 17 IS DISMISSED . 7. IN GROUND NO. 18, THE ASSESSEE HAS AGITATED THE DECISION OF THE LD.CIT(A) CONFIRMING THE INCLUSION IN THE INCOME OF THE ESTIM ATED IMPORT DUTY BENEFIT OF RS.394.51 LAKHS. IT IS OBSERVED THAT THE TRIBUNAL V IDE ORDER DATED 16.04.2008 FOR THE A.Y. 1997-98 HAS DECIDED A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE TRIBUNAL IN THE CASE OF JAMSHRI RAN JITSINGHJI SPINNING AND WEAVING MILLS V. INSPECTING ASSISTANT COMMISSIONER [1992] 4 1 ITD 142 (MUM), WHEREIN IT HAS BEEN HELD THAT THE IMPORT ENTITLEMENT RECEIVABLE BY THE ASSESSEE DO NOT CONSTITUTE THE INCOME OF THE ASSESSEE IN THE YEAR UNDER APPEAL AS NEITHER THE INCOME ACCRUED NOR ARISEN DURING THE YEAR OF ACCOUNTING. FOLLOWING THE SAID ORDER OF THE TRIBUNAL DATED 16.04.2008 FOR THE A.Y. 1997-98 IN THE ASSESS EES OWN CASE, WE DIRECT THE AO TO EXCLUDE THE IMPORT DUTY ENTITLEMENT FROM THE TOT AL INCOME OF THE ASSESSEE FOR THE YEAR UNDER APPEAL. THUS, GROUND NO. 18 IS ALLOWED. 8. IN GROUNDS NO. 19 AND 20, THE ASSESSEE HAS AGITA TED THE DECISION OF THE LD.CIT(A) IN CONFIRMING THE DISALLOWANCE MADE BY TH E AO IN RESPECT OF POOJA EXPENSES OF RS.2,82,289/-. IT IS OBSERVED THAT THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE A.Y. 1997-98 AND 2003-04 HAS DECIDED A SIMILAR ISSUE IN FAVOUR OF THE ASSESSEE. FOLLOWING THE SAID ORDERS OF THE TRIBUNAL , WE DIRECT THE AO TO ALLOW THE CLAIM OF THE ASSESSEE IN RESPECT OF POOJA EXPENSES OF RS.2,82,289/-. THUS GROUND NOS. 19 AND 20 ARE ALLOWED. ITA NO. 4596/MUM/2005 ITA NO. 4339/MUM/2005 MAFATLAL INDUSTRIES LTD. ASSESSMENT YEAR: 1998-99 5 9. IN GROUNDS NO. 21 TO 23, THE ASSESSEE HAS AGITAT ED THE DECISION OF THE LD.CIT(A) IN NOT ALLOWING THE ASSESSEES CLAIM IN R ESPECT OF AN AMOUNT OF RS.1,63,888/- BEING PAYMENT MADE TO RELATIVES OF DE CEASED EMPLOYEES. IT IS OBSERVED THAT THE TRIBUNAL IN THE ASSESSEES OWN CA SE FOR THE A.YS. 1994-95, 1995- 96, 1997-98 AND 2003-04 HAS DECIDED SIMILAR ISSUE I N FAVOUR OF THE ASSESSEE. FOLLOWING THE SAID DECISIONS, WE DIRECT THE AO TO A LLOW THE CLAIM OF THE ASSESSEE IN RESPECT OF PAYMENTS MADE TO RELATIVES OF DECEASED E MPLOYEES. RESULTANTLY, GROUNDS NO. 21 TO 23 ARE ALLOWED. 10. IN GROUND NO. 24, THE ASSESSEE HAS AGITATED THE DECISION OF THE LD.CIT(A) CONFIRMING THE DISALLOWANCE OF A SUM OF 19,98,000/- IN COMPUTING THE INCOME FROM CAPITAL GAINS BEING PROFESSIONAL FEES PAID IN CONNE CTION WITH THE SALE OF SHARES. 10.1 BRIEFLY STATED, IN COMPUTING THE INCOME BY WAY OF CAPITAL GAINS ON THE SALE OF SHARES, THE ASSESSEE HAD CLAIMED DEDUCTION OF RS.21 ,34,500/- REPRESENTING LEGAL AND PROFESSIONAL CHARGES. THE SAID SUM INCLUDED A SUM O F RS.19,98,000/- PAID TO J.M. FINANCIAL AND INVESTMENT CONSULTANCY SERVICES LTD. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSEE VIDE LETTER DATED MARCH 1 5, 2001 SUBMITTED THAT THE AMOUNT WAS PAID TO J.M. FINANCIAL AND INVESTMENT CO NSULTANCY SERVICES LTD. FOR IDENTIFYING A BUYER FOR THE PURCHASE OF SHARES OF G UJARAT GAS CO. LTD. AND TO FETCH THE HIGHEST PRICE ON SALE OF THE SAID SHARES. THE F EE PAYABLE TO J.M. FINANCIAL AND INVESTMENT CONSULTANCY SERVICES LTD. WAS FIXED AT 2 % OF THE SALE CONSIDERATION RECEIVABLE ON THE SALE OF SHARES. THE ASSESEE, FURT HER SUBMITTED THE COPY OF AGREEMENT WITH BRITISH GAS ASIA PACIFIC HOLDINGS PV T. LTD. FOR THE SALE OF SHARES OF SHARE OF GUJARAT GAS COMPANY LIMITED TOGETHER WITH THE COPY OF THE INVOICE OF J.M. FINANCIAL & INVESTMENT CONSULTANCY SERVICES LTD. TH E AO, HOWEVER, HELD THAT THE SHARES OF GUJARAT GAS CO. LTD. WERE SOLD BY THE ASS ESSEE TO BRITISH GAS ASIA PACIFIC HOLDING PVT. LTD. AS A PART OF TAKEOVER STRATEGY PU RSUANT TO AN AGREEMENT AND THEREFORE THERE WAS NO SCOPE FOR J.M. FINANCIAL AND INVESTMENT CONSULTANCY SERVICES LTD. TO RENDER ANY SERVICE. 10.2 HAVING HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD, IT IS PERTINENT TO MENTION THAT THE PERUSAL OF THE RECORD S SUGGESTS THAT J.M. FINANCIAL AND ITA NO. 4596/MUM/2005 ITA NO. 4339/MUM/2005 MAFATLAL INDUSTRIES LTD. ASSESSMENT YEAR: 1998-99 6 INVESTMENT CONSULTANCY SERVICES LTD. HELPED THE ASS ESSEE COMPANY TO IDENTIFY BRITISH GAS ASIA PACIFIC HOLDING PVT. LTD AND THE A SSESSEE HAS BEEN IN A POSITION TO BARGAIN FOR THE BEST PRICE FOR THE SALE OF THE SHAR ES. IT IS FURTHER RELEVANT TO STATE THAT THE PAYMENT HAS BEEN LEGITIMATE AND ALSO THE S AME HAS BEEN INCURRED IN CONNECTION WITH THE SALE OF THE SHARES WHICH ARE NO T DISPUTED. WHEN THE FACTS ARE BEING SO, THE AUTHORITIES BELOW ARE NOT JUSTIFIED I N DISALLOWING THE CLAIM OF DEDUCTION. THEREFORE, WE DIRECT THE AO TO ALLOW A SUM OF RS.19 ,98,000/- AS DEDUCTION IN COMPUTING THE INCOME UNDER THE HEAD CAPITAL GAINS AS CLAIMED BY THE ASSESSEE. GROUND NO 24 IS ALLOWED. 11. IN GROUND NO. 25, THE ASSESSEE HAS AGITATED THE DECISION OF THE LD.CIT(A) CONFIRMING THE ACTION OF THE AO IN RESTRICTING THE ASSESSEES CLAIM FOR DEDUCTION ON ACCOUNT OF REPAIRS AND MAINTENANCE AT RS.20,50,301/ - AS AGAINST RS.31,12,063/- CLAIMED IN THE RETURN OF INCOME IN COMPUTING THE IN COME UNDER THE HEAD HOUSE PROPERTY. 11.1 IT HAS SUBMITTED THAT THE LETTING OUT OF PROPE RTY IS ONE OF THE BUSINESS OF THE ASSESSEE AND THEREFORE, MAINTENANCE CHARGES INCURRE D ON LIFTS, LIFTMAN, SWEEPER, SECURITY ETC, ARE NORMAL EXPENSES IN RELATION TO TH E PROPERTY AND THE SAME ARE TO BE ALLOWED AS AN EXPENDITURE WHILE COMPUTING THE INCOM E UNDER THE HEAD HOUSE PROPERTY. FOR THE SAID PROPOSITION THE COUNSEL FOR THE ASSESSEE HAS RELIED ON THE DECISIONS IN THE CASES OF VERMA FAMILY TRUST VS. ITO 7 ITD 392 AND VASWANI CHAMBERS (AOP) VS. DCIT. 11.2 HAVING HEARD BOTH THE SIDES AND PERUSED THE MA TERIAL ON RECORD, IT IS RELEVANT TO MENTION THAT THE THE ITAT IN THE CASE OF PICCADI LY HOLIDAY RESORTS LTD VS DCIT REPORTED IN (2005) 94 ITD 267 (DEL) IN A DETAILED D ISCUSSION, IN THE CONTEXT OF THE SIMILAR CONTENTIONS PREFERRED BY THE LD.AR, HAS HEL D THAT IN THE ABSENCE OF A CLEAR PROVISION IN THE INCOME TAX ACT, COMMISSION PAID BY THE ASSESSEE TO THE PROPERTY AGENT IS NOT DEDUCTIBLE IN COMPUTING ITS INCOME CHA RGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IN THE SAID ORDER, THE ITAT H AS RELIED ON THE JUDGEMENT OF THE DELHI HIGH COURT IN THE CASE OF CIT V. H.G. GUPTA & SONS (1984) 149 ITR 253 WHEREIN IT HAS BEEN HELD THAT DEDUCTION OF EXPENDIT URE INCURRED ON STAMP DUTY AND ITA NO. 4596/MUM/2005 ITA NO. 4339/MUM/2005 MAFATLAL INDUSTRIES LTD. ASSESSMENT YEAR: 1998-99 7 REGISTRATION IN CONNECTION WITH EXECUTION OF LEASE DEED IS NOT ALLOWABLE AS NEITHER SECTION 23 NOR SECTION 24 PROVIDES FOR SUCH DEDUCTI ON. IN THE SAID CASE THE DELHI HIGH COURT HAS OBSERVED THAT USE OF THE WORD NAMEL Y IN SECTION 24 SHOWS THAT HEADS OF EXPENDITURE WHEREOF DEDUCTION CAN BE CLAIM ED IN THE COMPUTATION OF INCOME FROM HOUSE PROPERTY ARE EXHAUSTIVE. THE ITAT HAS ALSO RELIED ON THE DECISION OF THE CALCUTTA HIGH COURT IN THE CASE OF INDIAN CI TY PROPERTIES V. CIT (1965) 55 ITR 262 WHEREIN IT HAS BEEN HELD THAT DEDUCTION SPECIFI ED IN SECTION 24(1) ARE EXHAUSTIVE AND IN ORDER THAT A PARTICULAR EXPENDITU RE MAY BE CLAIMED AS PERMISSIBLE DEDUCTION, IT SHOULD COME WITHIN THE AMBIT OF ONE O F THE CLAUSES OF SECTION 24(1). IT HAS ALSO BEEN HELD BY THE HON'BLE CALCUTTA HIGH COU RT THAT DEDUCTION CANNOT BE CLAIMED UNDER ANY GENERAL PRINCIPLE OF LAW OR ON TH E CONSIDERATIONS OF EQUITY. IT IS PERTINENT TO MENTION THAT THE CALCUTTA HIGH COURT I N THE CASE OF CIT VS SREELEKHA BANERJEE (1989) 179 ITR 46 (CAL), WHILE DECIDING TH E ISSUE WHETHER THE SALARY PAID TO THE CARETAKER IS AN ADMISSIBLE DEDUCTION FROM TH E ANNUAL RENT TO DETERMINE THE ANNUAL VALUE OF THE PROPERTY UNDER SECTION 23 OF TH E ACT, HAS HELD THAT IN DETERMINING THE ANNUAL VALUE, THE SALARY PAID TO TH E CARETAKER CANNOT BE TAKEN INTO ACCOUNT AS THERE IS NO SPECIFIC ITEM FOR DEDUCTION OF THE SALARY OF A CARETAKER FROM THE ANNUAL VALUE OF THE PROPERTY WHICH IS LET OUT A ND IT DOES NOT, IN ANY WAY, AFFECT THE DETERMINATION OF THE ANNUAL VALUE. THE AFOREMEN TIONED DECISIONS OF THE HIGH COURTS FORTIFIES THE LEGAL POSITION THAT AS PER THE PROVISIONS OF SECTIONS 23 & 24 OF THE ACT, INCOME CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY SHALL BE COMPUTED AFTER MAKING THE DEDUCTIONS OF MUNICIPAL T AXES PAID BY THE OWNER, A SUM EQUAL TO THIRTY PER CENT OF ANNUAL VALUE AND THE AM OUNT OF INTEREST PAYABLE ON BORROWED CAPITAL WHERE THE PROPERTY HAS BEEN CONSTR UCTED, REPAIRED, RENEWED OR RE- CONSTRUCTED WITH BORROWED CAPITAL. ACCORDINGLY, AN ASSESSEE IS ENTITLED ONLY TO THE DEDUCTIONS IN RESPECT OF THE SAID EXPENDITURE IN TH E COMPUTATION OF THE INCOME UNDER THE HEAD OF INCOME. THEREFORE, IT IS NOT LEGA LLY PERMISSIBLE TO ALLOW THE DEDUCTION ON ACCOUNT OF MAINTENANCE CHARGES INCURRE D ON LIFTS, LIFTMAN, SWEEPER, SECURITY ETC UNDER THE HEAD INCOME FROM HOUSE PROP ERTY. THUS, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE DECISION O F THE LD.CIT(A) ON THIS COUNT AND THE SAME IS UPHELD. GROUND NO 25 IS DISMISSED. ITA NO. 4596/MUM/2005 ITA NO. 4339/MUM/2005 MAFATLAL INDUSTRIES LTD. ASSESSMENT YEAR: 1998-99 8 12. GROUND NO. 26 IS NOT PRESSED BY THE ASSESSEE AN D GROUNDS NO 27 AND 28 ARE GENERAL IN NATURE AND HENCE THE SAME DO NOT REQUIRE ANY ADJUDICATION. REVENUES APPEAL - ITA NO. 4339/MUM/2005 13. THE REVENUE, IN THEIR APPEAL, HAS AGITATED THE DECISION OF THE LD.CIT(A) DIRECTING THE AO TO ALLOW THE DEDUCTION OF RS.3,05, 54,000/- AS FOREIGN EXCHANGE LOSS ON THE BASIS OF FOREIGN EXCHANGE RATE AT THE END OF THE ACCOUNTING YEAR. 13.1 IT IS OBSERVED THAT THAT THE LD.CIT(A) VIDE OR DER DATED 29.03.2005 FOR THE A.Y. 1999-2000 HAS OBSERVED THAT THE ASSESSEE IN AL L OTHER EARLIER YEARS KEPT ON CLAIMING THE FOREIGN EXCHANGE LOSS ON GOODS TRADED AS EXPENDITURE AND THE SAME HAS ALSO BEEN ALLOWED IN THOSE YEARS AND THEREBY UP HELD THE ACTION OF THE AO IN INCLUDING THE FOREIGN EXCHANGE GAIN AS TAXABLE INCO ME. IN VIEW OF THE FACT THAT THE LOSS CLAIMED IN THE EARLIER YEARS HAS BEEN ALLOWED IN THOSE YEARS, SUBSEQUENTLY IN THE A.Y. 1999-2000 THE GAIN ALSO HAS BEEN ADDED TO THE TOTAL TAXABLE INCOME OF THE ASSESSEE AS HELD BY THE LD.CIT(A). THEREFORE, IT IS APPROPRIATE THAT THE TRADING LOSS IS TO BE ALLOWED AS A DEDUCTION WHILE COMPUTING THE INCOME. IN VIEW OF THAT MATTER, WE DO NOT FIND ANY INFIRMITY IN THE DECISION OF THE LD.CIT(A) DIRECTING THE AO TO ALLOW THE CLAIM OF THE ASSESSEE WHILE COMPUTING THE INCOM E OF THE ASSESSEE. 14. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS PARTLY ALLOWED AND THAT THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 22TH DA Y OF AUGUST, 2014. SD/- SD/- (N.K. BILLAIYA) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 22.08.2014 *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR I BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.