ITO 6(2)(1), MUMBAI V. CHAWLA BROTHERS .P. LTD, MUMBAI

ITA 5108/MUM/2017

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3885 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 5 month(s) 28 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-01-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Assessment Year: 2014-2015
• Appeal Filed On: 01-08-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABI RAMA KARTIKEYAN
• Assessee Lawyers: MAHESH O RAJORA
• Keywords: Depreciation; Fair market value

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH C , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI G. MANJUNATHA , HON'BLE ACCOUNTANT MEMBER ITA NO S . 5108 /MUM/201 7 (A.Y: 201 4 - 15) INCOME TAX OFFICER 6 (2)(1) ROOM NO. 51 0 , 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 V. M/S. CHAWLA BROTHERS PVT. LTD., POORAM ASHA B UILDING, 1ST, 317 NARSI NATHA STREET, MASJID BUNDER STATION, MUMBAI 400 009 PAN: AAACC 5084 F (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI MAHESH O. RAJORA DEPARTMENT BY : SHRI ABI RAMA KARTIK E YAN DATE OF HEARING : 1 4 .11.2018 DATE OF PRONOUNCEMENT : 30 .01.2019 O R D E R PER C. N. PRASAD (JM) 1. THIS APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 12, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 01.05.2017 FOR THE ASSESSMENT YEAR 2014 - 15. 2. THE REVENUE HAS RAISED THE FOLLOWING GROUNDS IN ITS APPEAL: - 1. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE LD. CIT(A) ERRED IN DELETING DISALLOWANCE OF RS. 14,14,695/ - ON ACCOUNT OF RENTAL INCOME MADE BY THE ASSESSING OFFICER BY COMPUTING ALV @ 8% OF FAIR MARKET VALUE OF THE PROPERTY ON THE BASIS OF STAMP DUTY RATE WITHOUT APPRECIATING THE FACT THAT AS PER THE PROVISION OF SECTION 23(1) THE ALV IS REQUIRED TO BE TAKEN HIGHER OF REASONABLE EXPECTED RENT OR ACTUAL RECEIPT BY THE ASSESSEE'. 2 ITA NOS. 5108/MUM/2017 (A.Y: 201 4 - 15) M/S. CHAWLA BROTHERS PVT. LTD., 2. 'ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD. CIT(A) ERRED IN DELETIN G DISALLOWANCE OF RS. 62,68,241/ - MADE BY THE ASSESSING OFFICER U/S 80IA(4)(IV) OF THE INCOME TAX ACT, WITHOUT APPRECIATION THE FACT THAT AFTER SETTING OF ALL EXPENSES AND DEPRECIATION, THE ASSESSEE DID NOT HAVE ANY ELIGIBL E PROFIT TO CLAIM DEDUCTION FROM ELIGIBLE BUSINESS.' 3. LD. COUNSEL FOR THE ASSESSEE, AT THE OUTSET SUBMITS THAT SIMILAR GROUNDS OF APPEAL HAVE BEEN DECIDED BY THE COORDINATE BENCH IN ASSESSEES OWN CASE FOR THE EARLIER ASSESSMENT YEARS. LD. COUNSEL FOR THE ASSESSEE IN SO FAR AS GROUND NO.1 IS CONCERNED REFERRED TO THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2013 - 14 WHICH IS PLACED AT PAGE NO. 49 OF THE PAPER BOOK AND SUBMITS THAT THE TRIBUNAL FOLLOWING ITS EARLIER YEARS ORDERS FOR THE A . YS. 2009 - 10 TO 2012 - 13 DIRECTED THE ASSESSING OFFICER TO COMPUTE THE ALV AT 8% OF THE COST AS RECORDED IN THE BO OKS OF ACCOUNTS OF THE ASSESSEE COMPANY FOR THE PURPOSE OF ASSESSING THE SAME UNDER THE HEAD FROM THE HOUSE PROPERTY. 4. LD. DR VEHEMENTLY SUPPOR TED THE ORDERS OF THE ASSESSING OFFICER. 5. ON A PERUSAL OF THE ORDER OF THE COORDINATE BENCH, WE FIND THAT THAT THE ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE WHEREIN THE COORDINATE BENCH FOLLOWING ITS EARLIER YEAR ORDERS FOR THE A .YS. 2009 - 10 TO 20 12 - 13 HELD THAT ALV OF THE PROPERTY GIVEN BY THE ASSESSEE TO SISTERS CONCERN SHOULD BE COMPUTED AT 8% OF THE COST AS RECORDED IN THE BOOKS OF ACCOUNTS OBSERVING AS UNDER: - 7. WE HAVE HEARD THE RIVAL SUBMISSION AND ALSO PERUSED THE MATERIAL ON RECORD. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE FIRST GROUND OF APPEAL IS COVERED BY THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL RENDERED IN THE ASSESSEES OWN CASE FOR THE A.YS. 2009 - 10, 2010 - 11 AND 2011 - 12. THE LD. CIT (A) HAS 3 ITA NOS. 5108/MUM/2017 (A.Y: 201 4 - 15) M/S. CHAWLA BROTHERS PVT. LTD., DECIDED THE IDENTICA L ISSUE IN THE PRESENT CASE BY FOLLOWING THE DECISION OF HIS PREDECESSOR IN THE ASSESSEES OWN CASE FOR THE A.Y. 2009 - 10, 2010 - 11, 2011 - 12 AND 2012 - 13. THE RELEVANT PARA OF THE ORDER PASSED BY THE LD. CIT (A) READS AS UNDER: - RESPECTFULLY FOLLOWING MY PR EDECESSOR CIT (A)S ORDERS FOR THE A.YRS. 2009 - 10, 2010 - 11, 2011 - 12 & 2012 - 13 WHEREIN CIT (A) HAS DIRECTED THE A.O TO COMPUTE THE ANNUAL LETTING VALUE OF THE PROPERTY @ 8% ON COST OF LAND AND BUILDING TO THE APPELLANT, IT IS SEEN THAT THE SAME ISSUE IS ALS O THEREIN THIS YEAR. SINCE FOR THIS A.Y THE ACTUAL RENT OF RS. 9,00,000/ - RECEIVED BY THE APPELLANT FROM M/S KAMANI OIL INDUSTRIES PVT. LTD. IS HIGHER THAN THE ANNUAL LETTING VALUE OF THE PROPERTY AT 8% OF COST OF LAND AND BUILDING, THE ADDITION BY THE A.O . IS DIRECTED TO BE DELETED. THE DEPARTMENTS APPEAL FOR THE A.Y. 2009 - 10 HAS ALSO BEEN DISMISSED BY THE HONBLE ITAT MUMBAI VIDE ORDER DT. 4.6.2014 IN ITA NO. 5490/MUM/2012 WHEREIN THE HONBLE ITAT HAS UPHELD THE CIT (A)S ORDER FOR THE A.Y. 2009 - 10 AND A LSO FOR A.Y. 2010 - 11 IN ITA NO. 6736(MUM) 2013 AND ITA NO. 6037(MUM)/2013 DT. 4.11.2015. THEREFORE, RESPECTFULLY FOLLOWING THE HONBLE MUMBAI ITAT ORDERS AND MY PREDECESSOR CIT (A)S ORDERS, GROUND OF APPEAL NO. 2 IS ALLOWED. 8. WE FURTHER NOTICE THAT THE PREDECESSOR OF LD. CIT (A) HAS DECIDED THIS ISSUE IN FAVOUR OF THE AASSESSEE BY FOLLOWING THE ORDERS OF THE COORDINATE BENCH RENDERED IN THE ASSESSEES OWN CASE FOR THE A.YS. 2009 - 10 AND 2010 - 11 REFERRED ABOVE. WE FURTHER NOTICE THAT THE COORDINATE BENCH HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE ITA NO. 5755/MUM/2014 BY FOLLOWING THE ORDERS OF THE COORDINATE BENCH IN THE ASSESSEES OWN CASE PERTAINING TO THE EARLIER YEARS AND DIRECTED THE AO TO COMPUTE THE ALV @ 8 % OF THE COST AS RECORDED IN THE BOOKS OF ACCOUNT OF THE ASSESSEE COMPANY. 9. SINCE, THE FINDINGS OF THE LD. CIT (A) ARE BASED ON THE ORDERS OF THE COORDINATE BENCH RENDERED IN THE ASSESSEES OWN CASE FOR THE A.YS. 2009 - 10, 2010 - 11 AND 2011 - 12, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE FINDINGS OF THE LD. CIT (A). HENCE, WE UPHOLD THE ORDER PASSED BY THE LD. CIT (A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 6. SINCE THE FACTS AND CIRCUMSTANCES BEING IDENTICAL, WE DO NOT FIND ANY REASON TO INTER FERE WITH THE ORDER OF THE LD.CIT(A) , HENCE THE GROUND RAISED BY THE REVENUE IS REJECT ED. 7. COMING TO GROUND NO. 2 I.E. DELETION OF DISALLOWANCE MADE U/S. 80IA (4)(IV) OF THE ACT, THE LD. COUNSEL FOR THE ASSESSEE REFERRED TO THE VERY SAME ORDER OF THE TRIBUNA L IN PARA NOS . 10 & 11 FOR THE ASSESSMENT YEAR 2013 - 14 AND SUBMITTED THAT THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. 4 ITA NOS. 5108/MUM/2017 (A.Y: 201 4 - 15) M/S. CHAWLA BROTHERS PVT. LTD., 8. ON A PERUSAL OF THE ORDER OF THE COORDINATE BENCH, WE FIND THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE WHEREIN THE TRIBUNAL ALLOWED THE CLAIM OF THE ASSESSEE U/S. 80IA OBSERVING AS UNDER: - 10. GROUND NO. 2 PERTAINS TO GRIEVANCE OF THE R EVENUE THAT THE LD. CIT (A) HAS ERRED IN DELETING THE DISALLOWANCE OF RS. 65,31,408/ - MADE BY THE AO U/S 80IA(4)(V) OF THE ACT. AS POINTED OUT BY THE LD. COUNSEL FOR THE ASSESSEE THIS GROUND IS COVERED BY THE DECISION OF THE COORDINATE BENCH RENDERED IN TH E ASSESSEES OWN CASES FOR THE A.YS. 2009 - 10, 2010 - 11 AND 2011 - 12. THE LD. CIT(A) HAS DECIDED THIS GROUND OF APPEAL IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE DECISIONS OF THE COORDINATE BENCH IN THE ASSESSEES OWN CASE FOR THE A.YS. 2009 - 10, 2010 - 11 AND 2 011 - 12 AND THE ORDER OF HIS PREDECESSOR PASSED IN ASSESSEES OWN CASE FOR THE ASSESSMENT YEARS 2011 - 12 AND 2012 - 13 AND THE CBDT CIRCULAR NO1/2016 DATED 15.02.2016. THE OBSERVATIONS OF THE LD. CIT(A) AS UNDER: RESPECTFULLY FOLLOWING THE HONBLE MUMBAI ITAT S ORDERS IN FAVOUR OF THE APPELLANT FOR THE A.Y. 2009 - 10 AND 2010 - 11 AND ALSO MY PREDECESSOR CIT (A)S ORDERS FOR THE A.YRS. 2011 - 12 AND 2012 - 13 ON THE SAME ISSUE, THE ADDITION MADE BY THE A.O. IS DELETED. THE ISSUE HAS NOW ALSO BEEN CLARIFIED BY THE CBDT IN ITS CIRCULAR NO. 1/2016 DT. 15.2.2016. THE HONBLE ITAT AND CIT (A) HAVE HELD THAT THE INITIAL ASSESSMENT YEAR IS A.Y. 2009 - 10. GROUND OF APPEAL NO. 3 IS ALLOWED IN THE LIGHT OF THE DISCUSSION HERE. 11. WE FURTHER NOTICE THAT THE COORDINATE BENCH OF THE TRIBUNAL HAS DECIDED THE IDENTICAL ISSUE IN FAVOUR OF THE ASSESSEE BY FOLLOWING THE ORDERS OF THE TRIBUNAL PASSED IN THE ASSESSEES CASE PERTAINING TO THE EARLIER YEARS. SINCE, THE FINDINGS OF THE LD. CIT(A) ARE BASED ON THE ORDERS OF THE COORDINATE B ENCH, WE DO NOT FIND ANY REASON TO INTERFERE WITH THE SAME. HENCE, WE UPHOLD THE FINDINGS OF THE CIT(A) AND DISMISS THIS GROUND OF APPEAL OF THE REVENUE. 9. FACTS BEING IDENTICAL , WE DO NOT SEE ANY REASON TO INTERFERE WITH THE ORDER OF THE LD.CIT(A). GROUND RAISED BY THE REVENUE IS REJECTED. 10. IN THE RESULT, APPEA L OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 30 TH JANUARY, 2019 SD/ - SD/ - ( G. MANJUNATHA ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 30 / 0 1/2019 GIRIDHAR , S R. PS 5 ITA NOS. 5108/MUM/2017 (A.Y: 201 4 - 15) M/S. CHAWLA BROTHERS PVT. LTD., COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM