ACIT (OSD) -I CEN RG 7, MUMBAI V. VIDHI DARSH RUIA, MUMBAI

ITA 5171/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8202 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Next Hearing Date: 30-07-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 06-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: N K MEHTA
• Assessee Lawyers: AJIT SHETTY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI BEFORE SHRI D. MANMOHAN, VICE PRESIDENT AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO. 5171/MUM/2011 ASSESSMENT YEAR 2008-09 ACIT (OSD)-I, CENTRAL RANGE-7, ROOM NO. 413, 4 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. VS. SMT. VIDHI DARSH RUIA, 6A, SAMUDRA GAURAV APARTMENT, ABDUL GAFARKHAN ROAD, WORLI, MUMBAI 400 025. PAN: AAUPR 4091 A (APPELLANT) (RESPONDENT) REVENUE BY : SHRI N.K. MEHTA ASSESSEE BY : SHRI AJIT SHETTY DATE OF HEARING : 30-07-2012 DATE OF PRONOUNCEMENT : 01-08-2012 ORDER PER RAJENDRA, A.M. CHALLENGING THE ORDER DATED 28.04.2011 OF THE CIT(A )-40, MUMBAI ASSESSING OFFICER (AO) HAS FILED FOLLOWING GROUND OF APPEALS: 1.(A) ON THE FACTS & IN THE CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD.CIT(A) ERRED IN DELETING THE ADDITION OF RS.24,68,160/- MA DE IN RESPECT OF THE CONCESSION RECEIVED BY THE ASSESSEE (DIRECTOR) BEING 50% OF TH E ANNUAL RENT OF THE PROPERTY LET OUT BY M/S. RAMGOPAL GANPATRAI & SONS PVT. LTD. (B) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LD.CIT (A) ERRED IN NOT APPRECIATING THE FACT THAT THE SAID CO NCESSION IS SQUARELY COVERED BY SECTION 2(24)(IV) OF THE INCOME TAX ACT, 1961. ITA NO. 5171/MUM/2011 SMT. VIDHI DARSH RUIA, 2 2. THE APPELLANT CRAVES TO LEAVE TO ADD, TO AMEND AND / OR TO ALTER ANY OF THE GROUNDS OF APPEAL, IF NEED BE. 3. THE APPELLANT THEREFORE PRAYS THAT ON THE GROUN DS STATED ABOVE, THE ORDER OF THE CIT(A)-40 MUMBAI MAY BE SET ASIDE AND THAT OF THE ASSESSING OFFICER RESTORED. 2. THE ASSESSEE, AN INDIVIDUAL, FILED HER RETURN OF IN COME ON31.03.2009 DECLARING TOTAL INCOME OF 3.37 LAKHS. DURING THE YEAR UNDER C ONSIDERATION ASSESSEE DERIVED INCOME FROM SALARIES, SHORT TERM CAPITAL GAIN AND I NCOME FROM OTHER SOURCES. ASSESSMENT WAS FINALISED ON 16.11.2010 DETERMINING TOTAL INCOME AT RS.28.06 LAKHS. 3. IN THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y.200 5-06 IN THE CASE OF ONE M/S. RAMGOPAL GANPATRAI AND SONS (P) LTD. (RGS), THE AO OF THE RSG NOTICED THAT THE ASSESSEE WAS IN OCCUPATION OF A FLAT AT WORLI, MUM BAI. THE ASSESSEE WAS PAYING ANNUAL RENT OF RS.30,000/- AND WAS A ONE OF THE DIR ECTORS OF RGS. ACCORDING TO THE AO RENT CHARGED BY THE RGS WAS VERY LOW AND BY CHAR GING OF SUCH LOW RENT, RGS HAS BEEN OBLIGING ITS DIRECTOR I.E. THE ASSESSEE. HE HE LD THAT THE ASSESSEE WAS GETTING BENEFIT IN THE FORM OF PERQUISITES-THE BENEFIT OF C ONCESSIONAL RENT. HE WAS OF THE OPINION THAT SAME WAS TAXABLE U/S. 17(2)(III)(A) OF THE ACT. THE AO IN THE CASE OF RGS DETERMINED ANNUAL LETTING VALUE OF THE FLAT AT RS.49,36,320/-.THE AO OF THE ASSESSEE AFTER MAKING A REFERENCE TO THE ABOVE ASSE SSMENT IN THE HANDS OF RSG, TREATED 50% OF THE AFORESAID VALUE DETERMINED BY TH E AO OF RSG AS PERQUISITES IN THE HANDS OF THE ASSESSEE.ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPELLATE AUTHORITY (FAA) WHO HELD THAT THERE WAS NO EMPLOYER -EMPLOYEE RELATIONSHIP BETWEEN THE ASSESSEE AND RGS, THAT PROVISIONS OF SECTION 17 (2)(III)(A) WERE NOT ATTRACTED IN THE ASSESSEES CASE, THAT THE ASSESSEE WAS NOT WHOLE TI ME EMPLOYEE OR DIRECTOR OF THE RGS. ADDITION MADE IN THE HANDS OF THE ASSESSEE WAS DELETED BY THE FAA. 4. BEFORE US, AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT THE ISSUE WAS COVERED IN FAVOUR OF THE ASSESSEE, THAT F BENCH OF ITAT, MUMBAI HAD HELD IN THE CASE OF THE ASSESSEE THAT ADDITION MADE BY THE AO IN THE HANDS OF THE ASSESSEE COULD NOT BE SUSTAINED. HE REFERRED TO ITA NO.1059/MUM/2009-AY. 2005-06, DATED 20.03.2010. DEPARTMENTAL REPRESENTATIVE (DR) CONCEDED THAT THE MATTER WAS DECIDED AGAINST THE REVENUE. 4.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND T HAT TRIBUNAL HAS ALREADY DELIBERATED UPON THE ISSUE AND HAS DECIDED THE SAME AS UNDER: AT THE TIME OF HEARING OF THIS APPEAL, IT WAS BRO UGHT TO OUR NOTICE THAT IN THE CASE OF THE RGS ANNUAL VALUE DETERMINED BY THE ASSESSING OF FICER HAD COME UP FOR CONSIDERATION BEFORE THE TRIBUNAL IN ITA NO. 696/MU M/2009 AND THIS TRIBUNAL HELD THAT RENT PAID WAS MORE THAN THE STANDARD RENT OR M UNICIPAL RATEABLE VALUE; AND THEREFORE THE ASSESSING OFFICER HAD TO DETERMINE ANNUAL VALUE U/S. 23(L)(B) OF THE ACT AND THUS ANNUAL VALUE WAS DIRECTED BE DETERMINED AT RS. 30,000/-. IN VIEW OF THE ABOVE DECISIONS IN THE CASE OF RGS, WE ARE OF THE V IEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE ASSESSEE CANN OT BE SUSTAINED. WE ARE ALSO OF THE VIEW THAT THERE WAS NEITHER A BENEFIT NOR PERQUISIT E OBTAINED BY THE ASSESSEE FROM RGS, THEREFORE PROVISIONS OF SECTION 2(24)(IV) OF THE ACT WILL ALSO NOT APPLY. W E FIND ITA NO. 5171/MUM/2011 SMT. VIDHI DARSH RUIA, 3 NO MERITS IN THIS APPEAL BY THE REVENUE, CONSEQUENT LY THE SAME IS DISMISSED. 4.2 RESPECTFULLY FOLLOWING THE DECISION OF THE COORDIN ATING BENCH, WE DECIDE THE MATTER AGAINST THE REVENUE. APPEAL FILED BY THE AO STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 1 ST AUGUST, 2012. SD/- SD/- (D. MANMOHAN) (RAJENDRA) VICE PRESIDENT ACCOUNTANT MEMBER MUMBAI, DATE 1 ST AUGUST, 2012 TNMM COPY TO: 1. APPELLANT 2. RESPONDENT 3. THE CONCERNED CIT (A) 4. THE CONCERNED CIT 5. DR F BENCH, ITAT, MUMBAI 6. GUARD FILE (TRUE COPY) BY ORDER ASST. REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI