ACIT (OSD) -I CEN RG 7, MUMBAI V. RAMGOPAL GANPATRAI & SONS P. LTD, MUMBAI

ITA 5172/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3629 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-04-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 27-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 06-07-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K KARDA M
• Assessee Lawyers: AJIT SHETTY

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D, MUMBAI BEFORE SHRI B RAMAKOTAIAH, ACCOUNTANT MEMBER & SHRI SANJAY GARG, JUDICIAL MEMBER ITA NO.: 5172/MUM/2011 ASSESSMENT YEAR: 2008-09 ACIT (OSD)-I, VS. M/S. RAMGOPAL GANPATRAI & SONS P LTD., CENTRAL RANGE- 7, MUMBAI. PLOT NO.7, CHANDIVALI F ARMS ROAD, CHANDIVALI, MUMBAI- 400 072. PAN: AAACR7642G (APPELLANT) (RESPONDENT) APPELLANT BY : MR. A K KARDAM RESPONDENT BY : MR. AJIT SHETTY DATE OF HEARING :27.02.2013 DATE OF PRONOUNCEMENT :19.04.2013 ORDER PER SANJAY GARG, JM : THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF THE CIT(A) DATED 28.04.2011 DELETING THE ADDITION OF RS.54,29, 952 MADE TO THE INCOME OF THE ASSESSEE FROM HOUSE PROPERTY AND ALSO DIRECTING TO ALLOW EXPENSES CLAIMED ON THE SAME RELEVANT TO A.Y. 2008-09. 2. THE FACTS OF THE CASE IN BRIEF ARE THAT THE ASSE SSEE HAD ACQUIRED 2 CLASS A SHARES OF THE COMPANY M/S. SAMUDRA GAURAV APARTMENT PVT. LTD. IN THE YEAR 1980. BY VIRTUE OF HOLDING THESE SHARES, THE ASSESSEE WAS ENTITLED TO USE AND OCCUPY TWO FLATS ADMEASURING 5142 SQ. FT. THESE FLATS WERE OR IGINALLY RENTED OUT BY THE ASSESSEE TO SHRI B R RUIA, DIRECTOR FOR A MONTHLY RENT OF RS .2,500/- P.M. PER FLAT. AFTER THE ITA NO. 5172/MUM/2011 AY : 2008-09 2 DEATH OF SHRI B.R RUIA, THE RENTAL RIGHTS IN THE AB OVE FLATS CAME TO BE VESTED WITH SMT. ASHA T RUIA AND MRS. VIDHI D RUIA BY VIRTUE OF THE WILL OF SHRI B.R.RUIA. DURING THE RELEVANT PERIOD, THESE FLATS WERE LET OUT TO MR S. ASHA T RUIA AND MRS. VIDHI D RUIA, DIRECTORS OF THE COMPANY AT THE ORIGINAL RENT OF RS.2,500/- PER MONTH PER FLAT. LOOKING INTO THE SIZE OF THE FLATS, THEIR LOCATION AND OTHER FACILITIES AVAILABLE, THE ASSESSING OFFICER FOUND THE RENT TO BE LOW AND ACCO RDINGLY, THE ASSESSEE WAS ASKED TO EXPLAIN WHY THE ANNUAL LETTING VALUE (ALV) OF TH E FLATS SHOULD NOT BE DETERMINED WITHIN THE MEANING OF SECTION 23(1) OF THE ITA. IN RESPONSE, IT WAS ARGUED THAT THE PROPERTIES BEING UNDER THE MAHARASHTRA RENT CONTROL ACT, THE ANNUAL LETTING VALUE CANNOT BE FIXED IN EXCESS OF THE STANDARD RENT. TH E ASSESSING OFFICER REJECTED THIS ARGUMENT AND FOLLOWING THE ORDERS OF THE EARLIER AS SESSMENT YEARS 2005-06 & 2006- 07 WENT ON TO DETERMINE THE ALV CONSIDERING THE LOC ATION, QUALITY OF THE FLATS AND OTHER RELEVANT FACTORS. THE LEARNED CIT(A) FOLLOWI NG THE ORDERS OF THE TRIBUNAL PERTAINING TO AYS 2005-06 AND 2006-07 AND FURTHER F OLLOWING THE ORDER OF HIS PREDECESSOR FOR A.Y. 2007-08 DELETED THE ADDITIONS SO MADE BY THE AO. THE REVENUE IS THUS IN APPEAL BEFORE US AGAINST THE SAID DELETI ON. 3. AT THE OUTSET, IT MAY BE OBSERVED THAT SIMILAR D ISPUTE WAS ALSO RAISED BY THE REVENUE IN THE CASE OF THE ASSESSEE PERTAINING TO A .YS. 2005-06, 2006-07 AND 2007- 08 AND THE LEARNED CO-ORDINATE BENCHES OF THE TRIBU NAL HAVE DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THE LEARNED CO-ORDINATE BE NCH OF THE ITAT VIDE ITS CONSOLIDATED ORDER DATED 26.03.2010 IN ITA NOS. 696 & 697/MUM/2009 FOR A.Y. 2005-06 HAS DELETED THE ADDITIONS. WHILE DISPOSING OFF THE SAID APPEALS THE LEARNED TRIBUNAL HAS OBSERVED AS UNDER: 6. IN THIS CASE IT IS ALSO ON RECORD THAT THE PROP ERTY IS A TENANTED PROPERTY AND THE TENANT IS A PROTECTED TENANT AS PE R THE ORDERS OF THE COURT. SINCE THE RENT RECEIVED BY THE ASSESSEE IS MORE THAN THE STANDARD RENT/MUNICIPAL RATEABLE VALUE THE A.O. HAS NO OPTION THAN TO ACCEPT THE RENT RECEIVED AS PER THE EXISTING JUDICI AL PRINCIPLE ON THIS ISSUE. IN VIEW OF THIS WE ARE NOT IN AGREEMENT WIT H THE ORDERS OF THE ITA NO. 5172/MUM/2011 AY : 2008-09 3 A.O. AND CIT(A) AND DIRECT HIM TO ACCEPT THE RENT O FFERED BY THE ASSESSEE. IN VIEW OF THIS GROUNDNO.1 IS ALLOWED. 7. GROUND NO.2 PERTAINS TO THE ALLOWANCE OF ESTABLI SHMENT AND STATUTORY EXPENSES NOT ALLOWED BY THE A.O. WHILE RE DETERMINING THE ANNUAL LETTING VALUE. 8. IT IS SEEN FROM THE RECORD THAT THE ASSESSEE HAS BEEN CLAIMING THESE EXPENSES AS PART OF COMPUTATION OF HOUSE PROP ERTY INCOME. AS SEEN FROM THE RECORD A.O. IN A.Y. 2004-05 HAS ALLOW ED THE EXPENDITURE AND ALSO IN EARLIER YEARS. IN VIEW OF THIS THE A.O . IS DIRECTED TO ALLOW THE EXPENSES AS CLAIMED. GROUND IS CONSIDERED ALLO WED. 9. SIMILAR FACTS EXIST IN ITA 696/MUM/2009 AND HERE ALSO THE TWO PROPERTIES OWNED BY THE ASSESSEE COMPANY ARE SUBJEC TED TO PROTECTED TENANCY UNDER THE MAHARASHTRA RENT CONTROL ACT, 199 9 BEING DEVOLVED ON MR. T B RUIA AND MRS. ASHA RUIA AND MRS. VIDHI D RUIA AFTER THE DEATH OF MR. T B RUIA. HERE ALSO THE PROPERTY WAS LET OUT FROM 01.10.1987 AND THE DEPARTMENT HAS BEEN ACCEPTING TH E SAME IN ALL THE EARLIER YEARS. FOR THE REASONS DISCUSSED IN ITA 69 7/MUM/2009 WE DIRECT THE A.O. TO ACCEPT THE RENT RECEIVED UNDER T HE PROVISIONS OF SECTION 23(1) AND REDETERMINE THE HOUSE PROPERTY IN COME ACCORDINGLY. A.O. ALSO IS DIRECTED TO ALLOW THE ESTABLISHMENT AN D STATUTORY EXPENSES WHICH ARE BEING ALLOWED IN EARLIER YEARS. ACCORDIN GLY, THE GROUNDS ARE CONSIDERED ALLOWED. THE ISSUE AGAIN CAME UP FOR ADJUDICATION BEFORE THE TRIBUNAL IN THE CASE OF THE ASSESSEE ITSELF FOR A.Y. 2006-07 AND THE TRIBUNAL F OLLOWING ITS DECISION IN THE ASSESSEES OWN CASE FOR A.Y. 2005-06 AGAIN SET ASID E THE ORDER OF THE CIT(A) AND ALLOWED THE ANNUAL LETTING VALUE (ALV) DISCLOSED BY THE ASSESSEE. AGAIN THE ISSUE CAME UP FOR CONSIDERATION IN THE CASE OF THE ASSESS EE ITSELF FOR A.Y. 2007-08 AND THE TRIBUNAL VIDE ITS ORDER DATED 21.09.2011, FOLLOWING ITS ORDER FOR A.YS 2005-06, DISMISSED THE APPEAL OF THE REVENUE . 4. IN THE PRESENT APPEAL BEFORE US THE AO HAS MADE THE ADDITIONS FOLLOWING THE ORDERS OF ASSESSMENT FOR EARLIER YEARS AND NO NEW G ROUND OR ISSUE HAS BEEN RAISED. UNDER SUCH CIRCUMSTANCES, RESPECTFULLY FOLLOWING TH E ORDERS OF THE TRIBUNAL PASSED IN ITA NO. 5172/MUM/2011 AY : 2008-09 4 ITA NO. 696/M/2009 FOR A.Y. 2005-06 - DATED 26.03.2 010, ITA NO. 01/MUM/2010 FOR A.Y. 2006-07 DATED 31.08.2010 AND ITA NO. 5516/MU M2010 FOR A.Y. 2007-08 DATED 21.09.2011, WE DO NOT FIND ANY MERIT IN THE A PPEAL OF THE REVENUE AND THE SAME IS HEREBY DISMISSED. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S HEREBY DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 19 TH DAY OF APRIL, 2013. SD/- SD/- (B RAMAKOTAIAH) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DT : 19 TH APRIL, 2013 SA COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. THE C.I.T. CONCERNED MUMBAI 4. CIT (A) CONCERNED MUMBAI 5. THE DR, D - BENCH, ITAT, MUMBAI //TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI