ITO 3(3)(4), MUMBAI V. VAIBHAV HOLDINGS P.LTD, MUMBAI

ITA 5783/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101265 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: F
• Assessment Year: 2005-2006
• Appeal Filed On: 25-09-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ADAGIRI

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F, MUMBAI , , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ITA NOS.5783, 5784 & 5785/MUM/2013 / ASSESSMENT YEAR: 2005-06, 2006-07 & 2007-08 ITO-3(3)(4), ROOM NO.672, 6 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400020 VS. M/S VAIBHAV HOLDINGS PVT. LTD. 212, T.V. INDUSTRIAL ESTATE, 52, S.K. AHIRE MARG, WORLI, MUMBAI-400030 ( / REVENUE) ( !' /RESPONDENT) P.A. NUMBER : AA A C V1889K /REVENUE BY : SHRI B. YADAGIRI !' /RESPONDENT BY SHRI SUNIL HIRAWAT & ' / DATE OF HEARING : 29/09 /201 5 & ' / DATE OF PRONOUNCEMENT : 29 / 09 /201 5 2 M/S VAIBHAV HOLDINGS PVT. LTD. ITA NO.5783, 5784 & 5785/MUM2013 . O R D E R PER JOGINDER SINGH, JUDICIAL MEMBER: THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDERS ALL DATED 29/04/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, FOR ASSESSMENT YEAR 2005-06 TO 2007-08 IN THE CASE OF T HE ASSESSEE ON THE GROUND WHETHER THE LD. FIRST APPELLATE AUTHO RITY WAS JUSTIFIED IN HOLDING THAT THE ANNUAL VALUE HAS TO B E DETERMINED WITH REFERENCE TO ACTUAL RENT RECEIVABLE BY THE ASS ESSEE AND NOT THE MARKET VALUE ADOPTED BY THE ASSESSING OFFICER W ITHOUT APPRECIATING THE FACT SECTION 23(1) OF THE ACT WAS INVOKED. 2. DURING HEARING OF THESE APPEALS, THE LD. COUNSE L FOR THE ASSESSEE, SHRI SUNIL HIRAWAT, AT THE OUTSET, CLAIME D THAT IMPUGNED ISSUE IS COVERED BY THE DECISION OF THE TR IBUNAL IN THE CASE OF CO-OWNER ON IDENTICAL ISSUE. THE LD. COUNS EL FURNISHED THE COPY OF THE ORDER DATED 02/01/2015 IN THE CASE OF I TO VS M/S RAJRATNA HOLDINGS PVT. LTD. (ITA NO.1742/MUM/2013). THIS FACTUAL MATRIX WAS NOT CONTRADICTED BY SHRI B. YADA GIR, LD. DR. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW OF THE AB OVE, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE A FORESAID ORDER DATED 02/01/2015 FOR READY REFERENCE:- 3 M/S VAIBHAV HOLDINGS PVT. LTD. ITA NO.5783, 5784 & 5785/MUM2013 . 2. AT THE TIME OF HEARING, SHRI AKHILENDRA YADAV, LD. DR ADVANCED HIS ARGUMENTS SUPPORTING THE ASSESSMENT ORDER BY CONTENDING THAT THE ASSESSING OFFICER MADE ENQUIRIES FROM THE AREA/MARKET AND FOUND THAT THE RENTAL IN THE AREA WAS VERY HIGH FOR MUCH SMALLER FLATS WITH SINGLE CA R PARKING. IT WAS ALSO CONTENDED THAT LD. COMMISSIONER OF INCOME TAX (APPEALS) REACHED TO A PARTICULAR CONCLUSION IGNORING THE FACTS RECORDED I N THE ASSESSMENT ORDER. 2.1. ON THE OTHER HAND, SHRI ANUJ KISNADWALA, LD. COUNSEL FOR THE ASSESSEE CONTENDED THAT THE ISSUE UNDER HAND IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF CO-OWNER OF THE PROPERTY ORDER DATED 19/12/2014 (ITA NO.9212/MUM/2010 & ITA NO.2608/MUM/2013). THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY THE REVENUE WITH THE HELP OF THE ANY POSITIVE MATERIAL. 2.2. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. BEFORE COMING TO ANY CONCLUSION, WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION OF THE ORDER DATED 19/12/2014, ITA NO.9212/MUM/2010 FOR READY REFERENCE:- 4 M/S VAIBHAV HOLDINGS PVT. LTD. ITA NO.5783, 5784 & 5785/MUM2013 . 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE BROUGHT OUR ATTENTION TO THE ISSUE RAISED IN GROUND NO.2 OF THE APPEAL AND MENTIONED THAT THE SAID ISSUE RELATES TO DETERMINATION OF ALV IN RESPECT OF THE PROPERTY WHICH IS COVERED BY THE RENT CONTROL ACT. IN THIS REGARD, LD COUNSEL FOR THE ASSESSEE FI LED A LETTER FROM THE COOPERATIVE SOCIETY WHERE THE IMPUGNED PROPERTY IS SITUATED. AS PER THE SAME, THE RATEABLE VALUE IS RS. 9,340/-. THE SAID AMOUNT IS LESSER THAN THE ACTUAL RENT RECEIVED OF RS.80,000/- PER MONTH BY FOUR PARTIES AND THE ASSESSEE S SHARE COMES TO RS. 20,000/-PER MONTH. ASSESSING OFFICER REJECTED THE SAME AND COMPUTED THE ALV AT RS.77,17,248/- RELYING ON THE FIGURES MENTIONED IN THE STAMP DUTY READY RECKONER (PARA 6 OF THE IMPUGNED ORDER IS RELEVANT). AGGRIEVED WITH THE SAME, ASSESSEE IS IN APPEAL BEFORE THE CIT (A). 4. DURING THE PROCEEDINGS BEFORE THE FIRST APPELLAT E AUTHORITY, ASSESSEE MENTIONED THAT THE ASSESSING OFFICER IS NOT FREE TO ADOPT THE FIGURES AND THE SA ME IS IN VIOLATION OF PROVISIONS OF SECTION 23(1)(B) O F THE ACT. CIT (A) CONSIDERED THE VARIOUS SUBMISSIONS OF THE ASSESSEE AND THE JUDICIAL PRONOUNCEMENTS RELIED UPON BY HIM AND DISAPPROVED THE ASSESSING OFFICER S DECISION. IN THIS REGARD, CIT (A) RELIED ON 5 M/S VAIBHAV HOLDINGS PVT. LTD. ITA NO.5783, 5784 & 5785/MUM2013 . THE JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. AKSHAY TEXTILE TRADING & AGENCY (P) LTD REPORTED IN 304 ITR 401 (BOM) AND HELD THAT ALV HAS TO BE DETERMINED ON THE BASIS OF THE ACTUAL RENT RECEIVABLE ON PROPERTYAS A RENT. PA RA 6 IS RELEVANT IN THIS REGARD. AGGRIEVED WITH THE SAME, REVENUE IS IN APPEAL WITH THIS ISSUE BEFORE THE TRIBUNAL FOR THE AYS 2007-08 AND 2009-2010 UNDER CONSIDERATION. 5. DURING THE PROCEEDINGS BEFORE US, LD COUNSEL FOR THE ASSESSEE, TO SUPPORT THE VIEWS OF THE CIT (A), FILED A COPY OF ANOTHER BINDING JUDGMENT OF THE HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. TIP TOP TYPOGRAPHY [2014] 368 ITR 330 (BOM) FOR IDENTICAL PROPOSITION IN RESPECT OF THE PROPERT Y COVERED UNDER THE RENT CONTROL ACT. ON THE OTHER HAND, LD DR RELIED ON THE ORDER OF THE ASSESSING OFFICER. AFTER HEARING BOTH THE PARTIES AND ON PERUSAL OF THE ORDERS OF THE REVENUE AUTHORITIES AS WELL AS THE RELEVANT MATERIAL PLACED BEFORE US, WE FIND, THE ORDER OF THE CIT (A) ON THIS ISSUE GIVEN IN PARA 6 OF THE IMPUGNED ORDER IS FAIR AND REASONABLE AND IT DOES NOT CALL FOR ANY INTERFERENCE. ACCORDIN GLY, GROUND NO.2 RAISED BY THE REVENUE IS DISMISSED. 6 M/S VAIBHAV HOLDINGS PVT. LTD. ITA NO.5783, 5784 & 5785/MUM2013 . 2.3. WE FIND THAT WHILE COMING TO A PARTICULAR CONCLUSION, THAT TOO IN THE CASE OF CO-OWNER OF THE IMPUGNED PROPERTY, THE TRIBUNAL, IN THE AFORESAID ORDER RELIED UPON THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS TIP TOP TYPOGRAPHY (2014) 368 ITR 330 (BOM), FOR IDENTICAL PROPOSITION, IN RESPECT OF PROPERTY COVERED UNDER T HE RENT CONTROL ACT. IN THE AFORESAID CASE, THE ASSESS EE ALSO FILED A LETTER FROM THE COOPERATIVE SOCIETY WH ERE THE IMPUGNED PROPERTY IS SITUATED AS PER WHICH THE RATEABLE VALUE IS RS.9,340/- WHICH IS LESSER THAN T HE ACTUAL RENT OF RS.8,000/- PER MONTH BY FOUR PARTIES OUT OF EACH THE SHARE OF THE ASSESSEE COMES TO RS.20,000 PER MONTH. THE LD. ASSESSING OFFICER, ON THE OTHER HAND, COMPUTED THE ALV AT RS.77,17,248/- , RELYING UPON FIGURES MENTIONED IN STAMP DUTY READY RECKONER. RELIANCE HAS ALREADY BEEN PLACED BY THE TRIBUNAL IN THE CASE OF AKSHAY TEXTILE TRADI NG & AGENCY (P.) LTD. 304 ITR 401 (BOM), WHEREIN IT WAS HELD THAT ALV HAS TO BE DETERMINED ON THE BASIS OF ACTUAL RENT RECEIVABLE. IN VIEW OF THESE FACTS, RESPECTFULLY FOLLOWING THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT AND ALSO OF THE COORDINATE BENCH OF THIS TRIBUNAL, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. 7 M/S VAIBHAV HOLDINGS PVT. LTD. ITA NO.5783, 5784 & 5785/MUM2013 . COMMISSIONER OF INCOME TAX (APPEALS), RESULTING INT O DISMISSAL OF THE APPEAL OF THE REVENUE. FINALLY, THE APPEAL OF THE REVENUE IS DISMISSED. 2.2. IF THE OBSERVATION MADE IN THE ASSESSMENT OR DER, LEADING TO ADDITION MADE TO THE TOTAL INCOME, CONCL USION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD , CONCLUSION DRAWN BY THE TRIBUNAL (ORDER DATED 02/01/2015) ASSE RTIONS MADE BY THE LD. RESPECTIVE COUNSEL, IF KEPT IN JUXT APOSITION AND ANALYZED, WE NOTE THAT IN THE AFORESAID CASE, THE I SSUE WAS IDENTICAL WHICH WAS COVERED IN THE CASE OF CO-OWNER OF THE PROPERTY ORDER DATED 19/12/2014 (ITA NO.9212/MUM/20 10 AND 2608/MUM/2013) WHICH WAS DULY CONSIDERED BY THE TRI BUNAL. IT IS ALSO NOTED THAT THE DECISION FROM HONBLE JURISD ICTIONAL HIGH COURT IN CIT VS TIP TOP TYPOGRAPHY (2014) 368 ITR 3 30 (BOM.), FOR IDENTICAL PROPOSITION, IN RESPECT OF PROPERTY C OVERED RENT CONTROL ACT WAS CONSIDERED. THE DECISION IN AKSHAY TEXTILE TRADING & AGENCY (P.) LTD. 304 ITR 401 (BOM.) HOLDI NG THAT ALV HAS TO BE DETERMINED ON THE BASIS OF ACTUAL RENT RE CEIVABLE. RESPECTFULLY FOLLOWING THE DECISION FROM HONBLE JU RISDICTIONAL HIGH COURT AND ALSO CO-ORDINATE BENCH OF THIS TRIBU NAL, WE FIND NO INFIRMITY IN THE CONCLUSION DRAWN BY THE LD. COM MISSIONER OF INCOME TAX (APPEALS), THEREFORE, THE APPEALS OF THE REVENUE ARE DISMISSED. 8 M/S VAIBHAV HOLDINGS PVT. LTD. ITA NO.5783, 5784 & 5785/MUM2013 . FINALLY, THE APPEALS OF THE REVENUE ARE DISMISSED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 29/09/2015. SD/ - (RAMIT KOCHAR) SD/ - (JOGINDER SINGH) '#$ / ACCOUNTANT MEMBER #$ / JUDICIAL MEMBER MUMBAI ; - DATED : 29/09/2015 F{X~{T? P.S/. .. #%&'()*)' / COPY OF THE ORDER FORWARDED TO : 1. 01!' / THE APPELLANT 2. !' / THE RESPONDENT. 3. B B C ( 01 ) / THE CIT, MUMBAI. 4. B B C / CIT(A) - , MUMBAI 5. PQ R , B 01' 0R , / DR, ITAT, MUMBAI 6. UV / GUARD FILE. #% / BY ORDER, P1 //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI