JYEMKO, MUMBAI V. ASST CIT CEN CIR 17 & 28, MUMBAI

ITA 5008/MUM/2013

• Counselvise Citation: [2015] 120 COUNSELVISE.COM (IT) 9327 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-03-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: J
• Next Hearing Date: 27-11-2014
• Assessment Year: 2010-2011
• Appeal Filed On: 03-07-2013
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: AKHILENDRA YADAV
• Assessee Lawyers: PRATIK VORA
• Section: 143(3)

Judgement Text

J IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUMBAI BEFORE SHRI I.P. BANSAL, JUDICIAL MEMBER AND SHRI R.C. SHARMA, ACCOUNTANT MEMBER ./ I.T.A. NO.5008 /MUM/2013 ( / ASSESSMENT YEAR : 2010-2011 M/S JYEMKO, 301, DESTINATION BUILDING, M.G. ROAD, NEXT TO SHOPPERS STOP, CHEMBUR, MUMBAI 400 089. / VS. ASSTT. COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 17 & 28, 466, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400020. ./ PAN :AAAFJ1075C ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SHRI PRATIK VORA R E SPONDENT BY : SHRI AKHILENDRA YADAV / DATE OF HEARING : 11-03-2015 / DATE OF PRONOUNCEMENT : 13-03-2015 [ !' / O R D E R PER R.C. SHARMA, A.M . : THIS IS AN APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE LD. CIT(A) - 39, MUMBAI DATED 30-05-2 013 FOR THE A.Y. 2010-11 IN THE MATTER OF ORDER PASSED U/S 143(3) OF THE INC OME TAX ACT, 1961. 2. OUT OF THE FOUR GROUNDS RAISED BY THE ASSESSEE IN THIS APPEAL, THE LD. A.R. DID NOT PRESS GROUND NO. 1 & 3, THEREFORE, GRO UND NO. 1 & 3 ARE DISMISSED AS NOT PRESSED. 3. GROUND NO. 2 & 4 AS PRESSED BY THE LD. A.R. READ S AS UNDER:- ITA 5008/M/13 2 GR. NO. 2. WITHOUT PREJUDICE TO THE ABOVE, THE LEA RNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF IN THE ASSESSING OFFICER TAXING RS. 56,71,824/- BEING THE AMOUNT REC EIVED FROM LIFE INSURANCE CORPORATION OF INDIA AS INCOME FROM OTHER SOURCES AND THEREBY DENYING DEDUCTION OF 30% OF THE ANNUAL VALU E UNDER SECTION 24 OF THE INCOME TAX ACT. GR. NO. 4. WITHOUT PREJUDICE TO THE ABOVE, THE LEAR NED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF IN THE ASSESSING OFFICER TAXING RS.4,76,1 00/- BEING THE AMOUNT RECE IVED FROM ANKUR DEVELOPERS AS INCOME FROM OTHER SOURCES AND THEREBY DENYING DEDUCTION OF 30% UNDER SECTION 24 OF THE INCOME TAX ACT, 1961. 4. THE LD. A.R. PLACED ON RECORD THE ORDER OF THE T RIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2007-08 AND 2008-09 O RDER DATED 14-3-2014 WHEREIN BOTH THE ABOVE GROUNDS HAVE BEEN DEALT WITH BY THE TRIBUNAL. 5. GROUND NO. 2 IS WITH REGARD TO TAXING THE AMOUNT OF RS. 56,71,824/- RECEIVED FROM LIFE INSURANCE CORPORATION OF INDIA W HICH HAS BEEN TAXED BY THE A.O. AS INCOME FROM OTHER SOURCES IN PLACE OF INCOME FROM HOUSE PROPERTY HAS BEEN DECIDED BY THE TRIBUNAL IN ASSES SEES FAVOUR. PRECISE OBSERVATION OF THE TRIBUNAL IS AS UNDER:- IT IS CLEAR FROM THE ABOVE FACTS RECORDED BY THE CI T(A) THAT THE AMOUNT OF RS. 39,52,341/- WAS STATED TO BE RECEIVED FROM L IC. HOWEVER, WHILE GIVING THE FINDING ON THE ISSUE THE CIT(A) HAS ASSU MED THAT THIS AMOUNT WAS RECEIVED FROM M/S ATONEMENT PROPERTIES P VT. LTD. AS COMPENSATION FOR LOSS OF RENT. THE ASSESSEE HAS RE CEIVED THIS AMOUNT AS RENT AS PER LEASE AGREEMENT WITH THE LIC. FURTH ER THE TRANSIT ACCOMMODATION TO THE LIC WAS GIVEN ONLY BY VIRTUE O F ASSESSEE BEING THE OWNER OF THE EXISTING OFFICES IN THE BUILDING T O BE DEMOLISHED AND REDEVELOPED. THEREFORE, THE ALTERNATIVE ACCOMMODAT ION PROVIDED TO THE LIC WAS ONLY ON THE BEHEST TO THE ASSESSEE. THEREF ORE THE AMOUNT RECEIVED FROM THE LIC IS IN THE PURSUANT TO THE LEA SE AGREEMENT AS WELL AS TRIPARTITE AGREEMENT BETWEEN THE PARTIES WHEREBY THEY AGREED FOR REDEVELOPMENT PLAN AND SHIFTING TO THE TRANSIT ACCO MMODATION TO FACILITATE THE DEMOLITION AND RECONSTRUCTION OF THE OLD PREMISES IN QUESTION. ACCORDINGLY THE RENT PAID BY THE LIC CAN NOT BE CATEGORIZED OTHER THAN THE INCOME FROM THE HOUSE PROPERTY AS TH ERE IS A DIRECT NEXUS BETWEEN THE OLD PROPERTY AND TRANSIT ACCOMMOD ATION AND NEW ACCOMMODATION IN WHICH THE LIC HAS A RIGHT TO OCCUP Y. ITA 5008/M/13 3 6. AS THE FACTS AND CIRCUMSTANCES OF THE ISSUE DURI NG THE YEAR UNDER CONSIDERATION ARE SIMILAR, RESPECTFULLY FOLLOWING T HE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE HOLD THAT THE AMOUNT RECEIV ED FROM LIC IS LIABLE TO BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY A ND NOT AS INCOME FROM OTHER SOURCES. ACCORDINGLY THE ASSESSEE IS ELIGIB LE FOR NECESSARY DEDUCTION WITH RESPECT TO INCOME FROM HOUSE PROPERTY. WE DIRE CT ACCORDINGLY. 7. WITH REGARD TO GROUND NO. 4, THE LD. A.R. FAIR LY CONCEDED THAT THE ISSUE REGARDING TAXING THE AMOUNT RECEIVED FROM ANKUR DEV ELOPERS AS INCOME FROM OTHER SOURCES HAS BEEN DECIDED BY THE TRIBUNAL IN ASSESSEES OWN CASE AGAINST THE ASSESSEE. THE PRECISE OBSERVATION OF T HE TRIBUNAL IN ITS ORDER DATED 14-03-2014 IS AS UNDER:- WE HAVE HEARD LD. A.R. AS WELL AS LD. D.R. AND CON SIDERED THE RELEVANT MATERIAL ON RECORD. THERE IS NO DISPUTE THAT THIS S UM OF RS. 17,18,100/- RECEIVED BY THE ASSESSEE FROM M/S ANKUR DEVELOPERS BEING COMPENSATION AGAINST THE LOSS OF RENT ON DEMOLITION OF THE BUILDING FOR RECONSTRUCTION. THIS AMOUNT IS REGARDING THE LOSS OF RENT IN RESPECT OF THE PREMISES OWNED BY THE ASSESSEE IN THE SAID SOCI ETY AND WAS GIVEN ON LEAVE AND LICENCE TO ARVIND BRANDS LTD. ON DEMO LITION THE TENANT IN RESPECT OF THE PREMISES VACATED AND THE BUILDER HAS COMPENSATED THE ASSESSEE AGAINST THE LOSS OF RENT. THEREFORE THIS AMOUNT HAS BEEN RECEIVED BY THE ASSESSEE BEING COMPENSATION FOR LO SS OF RENTAL INCOME AND NOT AS A RENTAL INCOME AS IT WAS NOT RECEIVED F ROM THE TENANT AND FURTHER THE TENANT WAS NO MORE IN OCCUPATION OF THE ASSESSEES PREMISES OR ALTERNATIVE PREMISES. ACCORDINGLY WE D O NOT FIND ANY ERROR OR ILLEGALITY IN THE ORDERS OF THE AUTHORITIES BELO W QUA THIS ISSUE. 8. AS THE FACTS AND CIRCUMSTANCES OF THE ISSUE DURI NG THE YEAR UNDER CONSIDERATION ARE SIMILAR, RESPECTFULLY FOLLOWING T HE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE, WE HOLD THAT THE AMOUNT RECEIV ED FROM M/S ANKUR DEVELOPERS HAS BEEN CORRECTLY TAXED BY THE A.O. AS INCOME FROM OTHER SOURCES. ITA 5008/M/13 4 9. IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART. ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH MARCH, 2015. !' # $% &! ' 13-03-3015 ( ) SD/- SD/- (I.P. BANSAL) (R.C. SHARMA) JUDICIAL MEMBER ACCOUNTANT MEMBER $ 5 MUMBAI ; &! DATED 13-03-2015 [ .6../ RK , SR. PS ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 7 () / THE CIT(A) 39,, MUMBAI 4. 7 / CIT CENT. II MUMBAI 5. :;( 66<= , <= , $ 5 / DR, ITAT, MUMBAI J BENCH 6. (?@ A / GUARD FILE. ' / BY ORDER, : 6 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) , $ 5 / ITAT, MUMBAI