SANGHI MOTORS ( BOMBAY) P.LTD, MUMBAI V. ACIT 7(2), MUMBAI

ITA 513/MUM/2012

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 8237 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 9 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-10-2014
• Appeal Filed By: Assessee
• Bench Allotted: H
• Next Hearing Date: 02-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 24-01-2012
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Opportunity of being heard; Principle of natural justice; Tangible material
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H , MUMBAI BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER ITA NO.8206/M/2011 (AY 2006 - 2007) ITA NO.8207/M/2011 (AY 2005 - 2006) ITA NO.5684/M/2010 (AY 20 07 - 2008) ITA NO.513/M/2 012 (AY 2008 - 2009) ITA NO.6699/M/2 012 (AY 2009 - 2010) SANGHI MOTORS (BOM) P. LTD., 1 TURF V IEW SETH MOTILAL G SANGHI MAR, WORLI, MUMBAI 400 018. VS. ACIT - 7(2), R.NO.624, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. PAN: AABCS5977Q (APPELLANT) (RESPONDENT) ITA NO.55 85/M/2010 (AY 2007 - 2008) ACIT - 7(2), R.NO.624, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 20. PAN: AABCS5977Q VS. SANGHI MOTORS (BOM) P. LTD., 1 TURF VIEW SETH MOTILAL G SANGHI MAR, WORLI, MUMBAI 400 018. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI FARROKH IRANI REVENUE BY : SHRI JITENDRA KUMAR, DR DATE OF HEARING: 21 .10.2014 DATE OF ORDER: 31 .10.2014 O R D E R PER BENCH : THERE ARE 6 APPEALS UNDER CONSIDERATION. OUT OF THEM, 5 APPEALS FILED BY THE ASSESSEE AND ONE APPEAL FILED BY THE REVENUE INVOL VING AYS 2005 - 2006 TO 2009 - 2010. R EVENUE FILED THE APPEAL FOR AY 2007 - 2008. SINCE, THE ISSUES RAISED IN ALL THESE APPEALS ARE CONNECTED , THEREFORE, FOR THE SAKE OF CONVENIENCE, THEY ARE CLUBBED, HEARD COMBINEDLY AND DISPOSED OF IN THIS CONSOLIDATED ORDER. CONSIDERING THE FACT THAT THE ASSESSEE RAISED LEGAL ISSUE QU ESTIONING THE VALIDITY OF THE REASSESSMENT S , TO BEGIN WITH ASSESSEES APPEALS FOR THE AYS 2005 - 06 AND 2006 - 07 2 ARE BEING ADJUDICATED SEPARATELY. APPEAL WISE ADJUDICATION IS GIVEN IN THE FOLLOWING PARAS OF THIS ORDER. ITA NO.8206/M/2011 (AY 2006 - 2007) (BY A SSESSEE) ITA NO.8207/M/2011 (AY 2005 - 2006) (BY ASSESSEE) 2. THESE TWO APPEALS ARE FILED BY THE ASSESSEE AGAINST THE ORDER OF THE CIT (A) - 13, MUMBAI COMMONLY DATED 24/8/2011. IN THESE TWO APPEALS, ASSESSEE RAISED THE IDENTICAL GROUNDS AND THE ONLY DIFFER ENCE IS IN FIGURES, THEREFORE, FOR THE SAKE OF REFERENCE AND ADJUDICATION PURPOSE, THE GROUNDS RAISED FOR THE AY 2005 - 06 ARE REPRODUCED WHICH READ AS UNDER: 1. THE LEARNED C . I . T(APPEALS} ERRED ON FACTS AND I N LAW IN I SSUING REASSESSMENT PROCEEDING U/S148 IS BAD I N LAW AND SET ASIDE THE NOTICE I SSUED U/S148 OF THE INCOME TAX ACT,1961 AS SAME HAD BEEN ISSUED WHERE CONTRARY VIEW I S POSSIBLE. 2. THE LEARNED C . I . T(APPEALS} ER R ED ON FACTS AND IN LAW I N HOLD I NG THAT LICENCE FEE S / RENTAL AND SERVICE CHARGES RECEIVED BY THE APPELLANT FROM COMMERCIAL PROPERTIES SUCH AS VEHICLE SHOW ROOM/ VEHICLE REPAIR WORKSHOP WAS NOT ASSESSABLE UNDER THE HEAD 'PROFIT AND GA I NS ON BUSINESS' 3. THE LEARNED C . I . T(APPEALS} ERRED, ON FACTS AND I N L AW, IN HOLDING THAT THE APPELLANT WAS NOT ENTITLED TO DEPRECIATION OF RS.17,86,891/ - . CLAIMED BY IT ON 'HUGHES ROAD SHOW ROOM'. 4. THE LEARNED C . I . T(APPEALS} ERRED ON FACTS AND I N LAW, IN HOLDING APPELLANT WAS NOT ENTITLED TO CLAIM LEGAL AND PROFESSION CHARGES O F RS. 3 , 26 , 424/ - INCURRED FOR LITIGATION ON COMMERCIAL PROPERTIES OF THE APPELLANT. 5. THE LEARNED C . I . T(APPEALS} ERRED ON FACTS AND IN LAW, IN INVOKING THE PROVISIONS OF SECTION 2(22}(E} ON DEPOSIT OF RS. 64,00,000/ - 6. THE LEARNED C . I . T(APPEALS} ERRED IN RELYING UPON DEC I S I ONS WHICH HAD NO APPLICATION TO THE FACT OF THE APPELLANT. 3. BRIEFLY STATED RELEVANT FACTS OF THESE CASES ARE THAT THE ASSESSMENTS WERE COMPLETED ORIGINALLY U/S 143(3) OF THE ACT ON 8.3.2007 FOR AY 2005 - 06 AND 31.12.2008 FOR AY 2006 - 07. SUBSEQUENTLY, AO RECORDED THE REASONS FOR REOPENING OF THE SAID ASSESSMENTS AND THE SA ME ARE EXTRACTED IN PARA 2.1 OF THE IMPUGNED ORDER. THE REASON FOR REOPENING OF THE ASSESSMENTS FOR BOTH THE YEARS IS STATED TO BE THE TRANSACTIONS ALLEGED COVERED BY THE PROVISIONS OF SECTION 2(22)(E) FO THE ACT. 3 NOTICE U/S 148 WAS ISSUED ON 30.3.2010 A ND THE SAME WAS SERVED ON ASSESSEE ON 31.3.2010. 4. DURING THE PROCEEDINGS BEFORE US, ASSESSEE FILED THE REVISED GROUND NO.1 AND THE SAME READS AS UNDER: THE LD CIT (A) ERRED ON FACTS AND IN LAW IN NOT HOLDING THAT REASSESSMENT PROCEEDING U/S 148 OF THE A CT WAS BAD IN LAW ILLEGAL, WITHOUT JURISDICTION AND ERRONEOUS. 5. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO THE CONTENTS OF PARA 2.1 RELATING TO REASONS FOR REOPENING OF THE ASSESSMENT U/S 148 OF THE ACT AND MENTIONED THAT THE AO EXPRESSLY STA TED IN THE OPENING LINES OF THE REASONS AS FOLLOWS. ON SCRUTINY OF THE ASSESSMENT FOLDER. RELYING ON THIS, LD COUNSEL FOR THE ASSESSEE ARGUED STATING THAT THE SOURCE OF INFORMATION FOR REOPENING OF THE ASSESSMENT IS THE ASSESSMENT FOLDER ITSELF, WHICH WAS AVAILABLE WITH HIM DURING THE SCRUTINY ASESSMENT U/S 143(3) OF THE ACT. GOING INTO THE MERITS OF THE ADDITION, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ASSESSEE TOOK THE LOAN OF RS. 64 LAKHS FROM ANOTHER CONCERN NAMED M/S. SURYA INVESTMENT PVT LTD AND ASSESSEE DOES NOT HOLD ANY SHARE IN THE SAID COMPANY. ADMITTEDLY, THE ASSESSEE AND THE LENDING COMPANY HAVE COMMON SHAREHOLDERS NAMED SHRI MAHENDRA K SANGHI AND SMT. MANJU M SANGHI. CO NSIDERING THE SAID COMMON SHARE HOLDERS, ON BOTH THE COMPA NIES IE ASSESSEE AND THE LENDING COMPANY, AO INVOKED THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE SETTLED LEGAL PROPOSITION BY VIRTUE OF THE BINDING JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT VS. UNIVERSAL MEDICARE PRIVATE LIMITED [2010] 324 ITR 263 (BOM.) FOR THE PROPOSITION THAT THAT SUCH ADDITIONS MADE U/S 2(22)(E) OF THE ACT ARE NOT SUSTAINABLE WHEN THE A SSESSEE IS NOT DIRECTLY A SHARE HOLDER. FURTHER, HE ALSO BROUGHT OUR ATTENTION TO THE SPECIAL BENCH DECISION IN THE CASE OF ACIT VS. BHAUMIK COLOUR P. LTD [2009] 313 ITR (AT) 146 (MUMBAI) (SB). 6. ON THE OTHER HAND, LD DR RELIED ON THE ORDERS OF THE REVENUE AUTHORITIES. 7. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE SAID ORDERS OF THE TRIBUNAL AS WELL AS THE HIGHER JUDICIARY WHICH ARE RELEVANT FOR THE PROPOSITION THAT BENEFICIAL SHAREHOLDERS ARE NOT TO BE BROUGHT INTO THE AMBIT OF THE PROVISIONS OF SECTION 2(22)(E) OF THE ACT WHICH IS BINDING ON THE TRIBUNAL. CONSIDERING THE SETTLED NATURE OF THE ISSUE, WE ARE OF THE OPINION THAT THE REASONS , FOR WHICH THE 4 ASSESSMENTS WERE REOPENED, ARE NOT LEGALLY SUSTAINABLE. IT IS AN UNDISPUTED FACT THAT THE SPECIAL BENCH DECISI ON IN THE CASE OF BHAUMIK COLOUR P. LTD (SUPRA) AS WELL AS THE BINDING JUDGMENT OF THE BOMBAY HIGH COURT IN THE CASE OF UNIVERSAL MEDICARE PRIVATE LIMITED (SUPRA) ARE ALREADY AVAILABLE IN PUBLIC KNOWLEDGE ON THE DAY NOTICE U/S 148 DATED 30.3.2010 WAS ISSUE D. AS SUCH, THE AO HAS NOT OBTAINED ANY TANGIBLE MATERIAL TO DEMONSTRATE THAT THERE IS A CONCEALMENT OF INCOME FOR WHICH NOTICE U/S 148 IS REQUIRED TO BE ISSUED. AO MERELY RELIED ON THE DOCUMENTS AVAILABLE IN THE ASSESSMENT FOLDER. CONSIDERING THE ABOVE FACTS AS WELL AS THE SETTLED NATURE OF THE LEGAL ISSUE, WE ARE OF THE OPINION THAT THE NOTICE ISSUED U/S 148 OF THE ACT FOR THE AYS 2005 - 06 AND 2006 - 07 ARE NOT VALID. ACCORDINGLY, THE LEGAL ISSUE RAISED IN BOTH THE APPEALS IS ALLOWED. 8. THE OTHER GROUNDS RAISED BY THE ASSESSEE ARE CONSEQUENTIAL IN NATURE. CONSIDERING THE CONSEQUENTIAL NATURE OF THE REMAINING GROUNDS, THE ADJUDICATION OF THE SAME BECOMES ACADEMIC. ACCORDINGLY, THEY ARE DISMISSED AS ACADEMIC. 9. IN THE RESULT, TWO APPEALS FILED BY THE A SSESSEE ARE PARTLY ALLOWED. ITA NO.5684/M/2010 (AY 2007 - 2008) (BY ASSESSEE) ITA NO.513/M/2012 (AY 2008 - 2009) (BY ASSESSEE) ITA NO.6699/M/2012 (AY 2009 - 2010) (BY ASSESSEE) 10. THESE THREE APPEALS ARE FILED BY THE ASSESSEE AGAINST THE DIFFERENT ORDERS OF TH E CIT (A) - 13, MUMBAI. 11. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THE ADJUDICATION OF THE GROUNDS RAISED IN APPEAL ITA NO.5684/M/2010 FOR THE AY 2007 - 2008 WOULD HELP IN ADJUDICATION OF THE REST OF THE GROUNDS RAISED IN THE LATER YEARS. I N THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO THE GROUND NO.1 OF THE SAID APPEAL FOR THE AY 2007 - 2008 AND MENTIONED THAT THE ASSETS INVOLVED ARE COMMERCIAL ASSETS AND THERE IS NO DISPUTE ON THIS FACT. ASSESSEE EARNED RENTAL INCOME BY WAY OF SERVICE C HARGES FROM THE TENANTS, THE DETAILS OF WHICH ARE PLACED AT PAGE NO.69 OF THE PAPER BOOK (ANNEXURE - C) , AND SOME OF THEM ARE SISTER CONCERNS OF THE ASSESSEE. IT IS AN UNDISPUTED FACT THAT ASSESSEE WAS NOT UTILIZING THESE PROPERTIES FOR ANYONE OF ITS ACTIV ITIES. ASSESSEE EARNED RENTAL INCOME AND OFFERED THE SAME AS BUSINESS INCOME AND CLAIMED DEPRECIATION ON THESE BUSINESS ASSETS. DURING THE ASSESSMENT PROCEEDINGS, ON FINDING THAT THE ASSESSEE IS NOT UTILIZING THESE ASSETS FOR ITS BUSINESS ACTIVITIES AND THE OTHER PROPERTIES ARE LET OUT FOR THE PURPOSE OF EARNING OF THE RENTAL 5 INCOME WHICH IS NOT THE BUSINESS ACTIVITY OF THE ASSESSEE, AO HELD THAT SUCH INCOME SHOULD BE CHARGED TO TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ALLOWED THE ELIGIBLE DEDUCI TON U/S 24 OF THE ACT. LD COUNSEL ALSO BROUGHT OUR ATTENTION THE EVIDENCE TO SHOW THAT FOR THE AYS 2005 - 06 AND 2006 - 07, THE REVENUE HAS BEEN CONSISTENTLY ACCEPTING THE CLAIM OF THE ASSESSEE AS BUSINESS INCOME. HOWEVER, HE MENTIONED THAT THE CIT (A) CONFI RMED THE VIEWS OF THE ASSESSEE HOLDING THAT THE INCOME IS BUSINESS IN NATURE AND RELIED ON VARIOUS BINDING JUDGMENTS IE HONBLE SUPREME COURT DECISION IN THE CASE OF SHAMBHU INVESTMENTS PVT LTD 249 ITR 47; M/S. SUPREME FLASK P LTD VS. CIT AND GUNTOOR MERCH ANT COTTON VS. CIT 237 ITR 454; EAST INDIA HOUSING AND LAND DEVELOPMENT TRUST V. CIT (1961) 42 ITR 49 (SC); CIT VS. CHUGMDAS & CO (1965) 55 ITR 17 (SC); S.G. MERCANTILE CORPN (P) LTD VS. CIT (1972) 83 ITR 700 (SC); BOMBAY HIGH COURT JUDGMENT IN THE CASE OF CIT VS. M/S. BHAKTAWAR CONSTRUCTION P. LTD, 162 ITR 452; CALCUTTA HIGH COURT JUDGMENT IN THE CASE OF S.B. (HOUSE & LAND) PVT LTD VS. CIT (1979) 119 ITR 785 (CAL.); KARNATAKA HIGH COURT JUDGMENT IN THE CASE OF D.R. PUTTANNA SONS (P) LTD VS. CIT 162 ITR 466 (KAR.) AND MADRAS HIGH COURT JUDGMENT IN THE CASE OF CIT VS. CENTRAL STUDIOS PVT LTD 88 ITR 298 (MAD.) CIT (A) CONFIRMED THE DECISION OF THE AO AND THE CONTENTS OF PARA 1, WHICH ARE COMMONLY DISCUSSED VARIOUS OTHER ASPECTS BUT THE GIST OF THE DECISION OF THE CIT (A) IS THAT SUCH INCOME IS REQUIRED TO BE TAXED UNDER THE HEAD INCOME FROM HOUSE PROPERTY. CIT (A) HEAVILY RELIED ON THE JUDGMENT OF THE HONBLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENTS PVT LTD (SUPRA). THE GIST OF THE CONCLUSIONS DRAW N BY THE CIT (A) IS EXTRACTED AS UNDER: PLETHORA OF ABOVE JUDGMENTS CLEARLY ESTABLISH THAT THE OBJECT OF THE ASSESSEE IS NOT AT ALL RELEVANT TO CONSIDER WHERE THE INCOME FROM LET OUT HOUSE PROPERTY IS CHARGEABLE AS INCOME FROM HOUSE PROPERTY U/S 22 OR INCOME FROM BUSINESS. EVEN, IF THE OBJECT OF THE ASSESSEE IS TO PURCHASE BUILDINGS AND LET THEM OUT ON HIRE, INCOME IS CHARGEABLE UNDER THE HEAD HOUSE PROPERTY AND NOT UNDER THE HEAD PROFITS AND GAINS OF BUSINESS. ACCORDINGLY, IT IS HELD THAT IRRESPECTIV E OF THE FACT OF THE OBJECTS OF ASSESSEE COMPANY, INCOME FROM LETTING OUT BUILDING HAS TO BE CHARGED AS INCOME FROM HOUSE PROPERTY. IN THE LIGHT OF THE ABOVE DECISIONS, THE RENT RECEIPTS OF THE ASSESSEE IS TREATED AS INCOME FROM HOUSE PROPERTY. 12. AFTER HEARING THE LD DR AND ON PERUSING THE PLETHORA OF BINDING JUDGMENTS CITED BY THE AO / CIT (A) IN THEIR ORDERS, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.1 RAISED BY THE ASSESSEE IS DISMISSED. 6 13. GROUND NO.2 RELATES TO THE ALLOWABILITY OF DEPRECIATION AND THE SAME IS EXPRESSLY STATED TO BE CONSEQUENTIAL TO THE GROUND NO.1. ACCORDINGLY, AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE RELEVANT PORTI ONS OF THE IMPUGNED ORDER, WE FIND THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.2 RAISED BY THE ASSESSEE IS DISMISSED. 14. GROUND NO.3 RELATES TO THE ALLOWABLITY OF THE LEGAL AND PROFESS IONAL CHARGES. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO PAGE 70 OF THE PAPER BOOK AND MENTIONED THAT THE SAID EXPENSES WERE INCURRED NOT ONLY IN CONNECTION WITH THE PROPERTY LOCATED AT MUMBAI AND NEW DELHI BUT ALSO RELATES TO TH E INCOME TAX MATTERS AND VARIOUS OTHER LITIGATIONS. SO, AOS DECISION IN CONSIDERING THE WHOLE OF THE EXPENDITURE RELATES TO THE SAID PROPERTY NARRATED AT PAGE 69 OF THE PAPER BOOK IS NOT BASED ON CORRECT FACTS. IN ALL FAIRNESS, BOTH THE PARTIES CONCURRE D TO THE PROPOSAL THAT THIS ISSUE SHOULD BE REMANDED TO THE FILE OF THE AO FOR FRESH EXAMINATION OF THE FACTS AND DECISION IN THIS REGARD IN ACCORDANCE WITH LAW. WE ORDER ACCORDINGLY. AO SHALL GRANT A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE AS PER THE SET PRINCIPLES OF THE NATURAL JUSTICE. ACCORDINGLY, GROUND NO.3 IS ALLOWED FOR STATISTICAL PURPOSES. 15. GROUND NO.4 RELATES TO INVOKING OF THE PROVISIONS OF SECTION 145A OF THE ACT BY THE AO WHEN THERE ARE NO TAX IMPLICATIONS OF ANY KIND. ON HEARING BOTH THE PARTIES ON THIS ISSUE, WE REMAND THIS MATTER TO THE FILE OF THE AO TO DECIDE THE ISSUE AS PER THE LAW LAID DOWN BY THE BINDING JUDGMENT IN THE CASE OF CIT VS. MAHALAXMI GLASS WORKS P LTD, 318 ITR 116 AND ALSO THE ALLAHABAD HIGH COURT JUD GMENT IN THE CASE OF MAHENDRA KUMAR AGGARWAL VS. CIT [2005] 277 ITR 77. AO SHALL DECIDE THIS ISSUE AFRESH IN ACCORDANCE WITH THE SAID DECISIONS AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUND NO.4 RAISED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 16. IN THE RESULT, APPEAL OF THE ASSESSEE FOR THE AY 2007 - 2008 IS PARTLY ALLOWED. 17. FURTHER, IT IS NOTICED THAT GROUNDS RAISED IN AYS 2008 - 2009 (ITA NO.513/M/2012) AND 2009 - 2010 (ITA NO.6699/M/2012) ARE IDEN TICAL TO THE ISSUES RAISED AND ADJUDICATED ABOVE IN CONNECTION WITH THE ASSESSEES APPEAL FOR THE AY 2007 - 2008. ACCORDINGLY, AO IS DIRECTED TO FOLLOW THE SAME AND COMPUTE THE INCOME AS PER THE LAW AFTER GRANTING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ACCORDINGLY, GROUNDS RAISED BY THE ASSESSEE FOR THE AYS 2008 - 2009 AND 7 2009 - 2010 STAND COVERED BY OUR DECISION NARRATED ABOVE. ACCORDINGLY, THE APPEAL FOR THE AYS 2008 - 09 AND 2009 - 2010 ARE PARTLY ALLOWED. ITA NO.5 5 85/M/2010 (AY 2007 - 2008) ( BY REVENUE) 18. THIS APPEAL FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A) - 13, MUMBAI DATED 3.3.2010. IN THIS APPEAL, REVENUE RAISED THE FOLLOWING GROUNDS WHICH READ AS UNDER: 1. ON THE FACTS A ND IN THE CIRCUMSTANCES OF THE CA S E A ND IN LAW , T H E LD . CI T (A) HAS ERRED IN DIRECTING TO ADOPT THE ANNUAL LETTING VA LU E OF TH E HOUSE PRO P E R TY AT R S . 60 LAKHS AS CLAIMED B Y THE ASSESSEE INSTEAD OF RS.2 , 16 , 00 , 000/ - IGNO R I N G THAT THE PROPERT Y HAS FETCHED MORE RE N T IN THE SPIRIT OF LAW AN D IN TER MS O F SEC . 23( 1 )( A) OF T H E ACT W HI C H P ROV ID ES, 'T H E SUM FOR W H IC H THE PRO P ERTY MI G HT RE ASO N A BL Y B E L ET O U T FR O M YEAR TO YEAR' . 2 . ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW , THE LD . C IT (A) HAS ERRED IN HOLDING THAT T H E AMOUNT RECEI V ED FROM M / S . SARAYU INVES TM ENT PVT . LTD. OF RS . 62 LAKHS WAS IN THE NATURE OF D E POSIT IGNORING THAT T HE A S SESSEE IN T H E TAX A UD IT R E P ORT HAS SHOWN T H AT M/S . SARA Y U INVEST M ENT P V T . LTD. H A D G I V EN L OA N T O T H E ASSESSEE AN D T H E D IRECTORS OF T H E L EN D I N G COMPA N Y HOLDING M ORE THA N 1 0 % SHARE H OLDING AND THER E FORE , SECTION 2(22)(E) R . W. EXPLANATION 3 IS SQUAREL Y AP P LICABLE TO THIS CASE. 19. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE GROUND NO.1 AND MENTIONED THAT THE SAID ISSUE CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL FOR THE AYS 2001 - 2002, 2004 - 2005 AND 2005 - 2006 AND THE SAME WAS ADJUDICATED IN FAVOUR OF THE ASSESSEE. IN THIS REGARD, LD COUNSEL BROUGHT OUR ATTENTION TO THE COPY OF THE ORDER OF THE TRIBUNAL VIDE ITA NO.9086/M/2004 (AY 2001 - 2002), DA TED 17.1.2006 PLACED AT PAGE 54 OF THE PAPER BOOK AND ANOTHER ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE AY 2004 - 05 AND 2005 - 06 VIDE ITA NOS. 7292 AND 7293/M/2007, DATED 20.4.2010. LD COUNSEL BROUGHT OUR ATTENTION TO THE FACTS OF THE CASE AND RE AD OUT THE CONTENTS OF PARA 8 ONWARDS AND MENTIONED THAT THE IDENTICAL ISSUE CAME UP FOR ADJUDICATION IE IF THE AO IS CORRECT IN ADOPTING THE ALV OF THE PROPERTY AT 2.86 CRS AGAIST RS. 60 LAKHS OFFERED BY THE ASSESSEE. THE ISSUE WAS ADJUDICATED IN ASSESSE ES FAVOUR AND THE RS. 60 LAKHS IS DECIDED TO BE THE ALV OF THE PROPERTY. PARA 10 IS RELEVANT IN THIS REGARD. 20. AFTER HEARING BOTH THE PARTIES, WE HAVE PERUSED THE SAID ORDER OF THE TRIBUNAL DATED 20.4.2010 (SUPRA) AND FIND THE PARA 10 IS RELEVANT IN TH IS REGARD WHICH READS AS UNDER: 10. IN THE CASE BEFORE US, IT IS NOT THE CASE OF THE REVENUE THAT THE ACTUAL RENT RECEIVED OR RECEIVABLE IS IN EXCESS OF THE ALV IE MORE THAN RS. 60.00 LACS AS DETERMINED BY THE TRIBUNAL IN ITS ORDERS FOR THE ASSESSMENT YEARS 2001 - 02 AND 2002 - 03, THEREFORE, IN THE CASE OF THE ASSESSMENT IT REMAINS SAME IE RS. 60 LACS. IN THIS 8 VIEW OF THE MATTER AND KEEPING IN VIEW THE RATIO OF DECISION IN RADHASOAMI SATSANG VS. CIT (1992) 193 ITR 321 (SC) WHEREIN IT HAS BEEN HELD THAT IN THE ABSENCE OF ANY MATERIAL CHANGE J USTIFYING THE DEPARTMENT TO TAKE DIFFERENT VIEW FROM THAT TAKEN IN THE EARLIER PROCEEDINGS.. , WE ARE OF THE VIEW THAT THE CIT (A) WAS NOT JUSTIFIED IN DIRECTING THE AO TO ADOPT RS. 21,12,61,507/ - AS ALV OF THE PROPERTY FOR THE YEAR UNDER CONSIDERATION AS AGAINST THE ASSESSEES CLAIM THAT THE ALV OF THE PROPERTY SHOULD BE TAKEN AT RS. 60.00 LACS ONLY. THE GROUNDS TAKEN BY THE ASSESSEE ARE THEREFORE ALLOWED. 21. CONSIDERING THE ABOVE, WE ARE OF THE OPINION THAT THE DECISION TAKEN BY THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.1 IS DISMISSED. 22. IN CONNECTION WITH GROUND NO.2, LD DR MENTIONED THAT THE ASSESSEE RECEIVED A SUM OF RS. 62 LAKHS FROM M/S. SARAYU INVESTMENT PVT LTD AND THESE TWO COMPAN IES ARE HAVING COMMON SHAREHOLDERS AND THE ASSESSEE DOES NOT HAVE ANY SHARES IN THE LENDING COMPANY AND THERE IS NO DISPUTE ON THESE FACTS. AFTER HEARING BOTH THE PARTIES ON THIS ISSUE, WE FIND THE CIT (A) HAS RIGHTLY RELIED ON THE ABOVE CITED JUDGMENTS I N THE CASE OF UNIVERSAL MEDICARE PRIVATE LIMITED (SUPRA) AND BHAUMIK COLOUR P. LTD (SUPRA). CONSIDERING THE SETTLED NATURE OF THE ISSUE, WE ARE OF THE OPINION THAT THE ORDER OF THE CIT (A) IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY, GROUND NO.2 IS DISMISSED. 23. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. 24. CONCLUSIVELY, ALL THE ASSESSEES APPEALS FOR THE AYS 2005 - 06 TO 2009 - 10 ARE PARTLY ALLOWED AND REVENUES APPEALS FOR THE AY 2007 - 2008 IS DISMISSED. ORDER PRON OU NCED IN THE OPEN COURT ON 31 ST OCTOBER, 2014. SD/ - SD/ - (VIJAY PAL RAO) (D. KARUNAKARA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER DATE: 31 .10.2014. AT :MUMBAI OKK COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR H, BENCH, ITAT, MUMBAI. 6. GUARD FILE. // TRUE COPY// 9 BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI