JAYA GIRISH VADASSERY, MUMBAI V. ITO 23(2)(3), MUMBAI

ITA 5298/MUM/2014

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0898 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 21-08-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: G N MAKAWANA
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH, MUMBAI BEFORE SHRI G.S. PANNU , ACCOUNTANT MEMBER ITA NO . 5298 / MUM./ 2014 ( ASSESSMENT YEAR : 20 0 9 10 ) SMT. JAYA GIRISH VADASSERY A 1, 103 TARA TOWERS S.N. ROAD, MULUND (W) MUMBAI 400 080 PAN AFHPP1533M .. APPELLANT V/S INCOME TAX OFFICER WARD 2 3 ( 2 )(3), AAYAKAR BHAVAN 101, M.K. ROAD, MUMBAI 400 020 .... RESPONDENT ASSESSEE BY : SHRI VIPUL JOSHI REVENUE BY : SHRI G.N. MAKAWANA DATE OF HEARING 1 6 .0 7 .2015 DATE OF ORDE R 31.07.2015 O R D E R PER G.S. PANNU, ACCOUNTANT MEMBER TH E PRESENT APPEAL PREFERRED BY THE ASSESSEE IS DIRECTED AGAINST THE IMPUGNED ORDER DATED 30 TH MAY 2014 , PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) 7 , MUMBAI, FOR THE ASSESSMENT YEAR 20 0 9 10 . THE SOLE ISSUE RAISED BY THE ASSESSEE IN THIS APPEAL IS THAT THE CIT(A) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN MAKING DISALLOWANCE OF ` 2,89,777, BEING THE SHOP MAINTENANCE CHARGES PAID BY THE ASSESSEE WHILE COMPUTING THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY . SMT. JAYA GIRISH VADASSERY 2 2. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSING OFFICER NOTICED THAT THE ASSESSEE, WHILE COMPUTING THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY , HAD, INTER ALIA, CLAIMED DEDUCTION OF ` 2,29,178 , REPRESENTING SO CIETY MAINTENANCE CHARGES. THE APPELLANT IS OWNER OF A COMMERCIAL PREMISE (SHOP) LOCATED AT ETERNITY MALL, THANE, WHICH WAS LET OUT ON RENT. THE ASSESSING OFFICER WAS OF THE VIEW THAT THE CLAIM ON ACCOUNT OF SOCIETY MAINTENANCE CHARGES PAID FOR COMMERCIAL PREMISES IS NOT AN ALLOWABLE DEDUCTION WHILE COMPUTING THE INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY , AS , ACCORDING TO HIM , SECTION 23(1) OF THE ACT COVERED ONLY THE LEVIES IMPOSED BY THE LOCAL / GOVERNMENT AUTHORITIES . THE ASSESSEE, IN RESPONSE T O THE QUERY RAISED BY THE ASSESSING OFFICER, RELIED UPON THE DECISION OF THE TRIBUNAL, MUMBAI BENCH, IN BOMBAY OIL INDUSTRIES LTD . (ITA NO.550/ MUM./2000), ORDER DATED 15 TH NOVEMBER 2000 REPORTED IN (2004) 88TTJ MUMBAI , AND THE DECISION OF THE TRIBUNAL, MU MBAI BENCHES, IN SHARMILA TAGONRE V/S JCIT, 93 TTJ 483 (MUM.). THE ASSESSING OFFICER, HOWEVER, HELD THAT THE CASE LAWS RELIED UPON BY THE ASSESSEE IS DISTINGUISHABLE FROM THE FACT S OF THE PRESENT CASE AS IN THE CASE OF SHARMILA TAGORE (SUPRA), THE ISSUE RE LAT ED TO PAYMENT OF MAINTENANCE CHARGES TO CO OPERATIVE HOUSING SOCIETY WHEREAS IN THE PRESENT CASE, IT IS A COMMERCIAL PROPERTY. HE ACCORDINGLY REJECTED THE SMT. JAYA GIRISH VADASSERY 3 CLAIM OF THE ASSESSEE AND ADD ED THE SAID AMOUNT OF ` 2,89,777, AS MAINTENANCE CHARGES TO THE TOTAL INCOME OF THE ASSESSEE. 3. THE ASSESSEE, BEING AGGRIEVED BY THE ORDER SO PASSED BY THE ASSESSING OFFICER, WENT IN APPEAL BEFORE THE CIT(A) , AND REITERATED THE CONTENTIONS RAISED BEFORE THE ASSESSING OFFICER AND ALSO RELIED UPON THE CASE LAWS, AS RELIED UPO N BEFORE THE ASSESSING OFFICER. THE CIT(A) CONFIRMED THE ACTION OF THE ASSESSING OFFICER. AGGRIEVED, THE ASSESSEE IS IN FURTHER APPEAL BEFORE THE TRIBUNAL. 4. BEFORE ME , THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE PRESENT ISSUE IS COVERED BY THE DECISIONS OF THE TRIBUNAL, MUMBAI BENCHES, BOMBAY OIL INDUSTRIES LTD. (SUP RA) AND SHARMILA TAGORE (SUPRA). HE ALSO RELIED ON THE JUDGMENT OF ALOO BEJAN DEVAR IN ITA NO 2381 AND 2382 /MUMBAI/2010(MUM TRIB.) AND SAIF ALI KHAN IN ITA NO 1653/MUM/2009(MUM TRIB .) , AND THAT NO DISTINCTION CAN BE MADE BETWEEN PAYMENTS MADE FOR MAINTENANCE TO A HOUSING SOCIETY OR A NON HOUSING SOCIETY. 5. T HE LEARNED DEPARTMENTAL REPRESENTATIVE HAS RELIED UPON THE ORDERS OF THE AUTHORITIES BELOW. 6. I HAVE CONSIDERED THE RIVAL CONTENTI ONS AND PERUSED THE MATERIAL ON RECORD AND THE CASE LAWS RELIED UPON BY THE LEARNED COUNSEL FOR THE ASSESSEE. I FIND THAT THE ISSUE BEFORE ME IS IDENTICAL TO THE ISSUE SMT. JAYA GIRISH VADASSERY 4 DECIDED BY THE TRIBUNAL IN THE CASE OF BOMBAY OIL INDUSTRIES LTD. (SUPRA) AND SHARMILA T AGORE (SUPRA). C OP IES OF THESE DECISIONS HAVE BEEN PLACED ON RECORD. IN THESE DECISIONS , THE TRIBUNAL HELD THAT THE SOCIETY MAINTENANCE CHARGES ARE INCLUDED IN GROSS RENTAL INCOME RECEIVED BY THE LESSOR AND ARE PAID BY LESSOR OUT OF THE RENTAL INCOME AS PE R AGREEMENT WITH THE LESSEE , THEN THE SAID MAINTENANCE CHARGES SHALL BE DEDUCTED FROM THE RENTAL INCOME TO BE BROUGHT TO TAX AS INCOME FROM HOUSE PROPERTY BEFORE ALLOWING THE STATUTORY DEDUCTION OF 30%. IN THE PRESENT CASE, IT WOULD NEED A FACTUAL VERIFICA TION, AS TO WHETHER, AS PER THE AGREEMENT ENTERED BY THE ASSESSEE WITH THE LESSEE, THE SOCIETY MAINTENANCE CHARGES OF ` 2,89,777 ARE A PART OF OBLIGATION OF THE ASSESSEE AND ARE INCLUDED IN GROSS RENTAL S RECEIVED BY THE ASSESSEE OR NOT? SUCH A FINDING IS M ISSING IN THE ORDERS OF THE LOWER AUTHORITIES. THUS, I HEREBY SET ASIDE THE ORDER OF THE CIT(A) AND DIRECT THE ASSESSING OFFICER TO CARRY OUT THE AFORESATED VERIFICATION AND THEREAFTER DECIDE THE ISSUE ACCORDINGLY. NEEDLESS TO SAY, THE ASSESSING OFFICER SH ALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD AND THEREAFTER DECIDE THE ISSUE AFRESH AS PER LAW. 7. BEFORE PARTING, IT WOULD ALSO BE APPROPRIATE TO SAY THAT THE DISTINCTION SOUGHT TO BE DRAWN BY THE REVENUE ON THE BASIS OF THE PAYMENT BEING MADE TO A NON HOUSING (I.E., COMMERCIAL BUILDINGS) SOCIETY IS QUITE OTIOSE TO THE CONTROVERSY AND IS HEREBY REJECTED. SMT. JAYA GIRISH VADASSERY 5 8. IN THE RESULT, ASSESSEES APPEAL IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT O N 31.07.2015 SD/ - G.S. P ANNU ACCOUNTANT MEMBER MUMBAI, DATED : 31.07.2015 COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PR IVATE SECRETARY (DY./ASSTT. REGISTRAR) ITAT, MUMBAI