DCIT 7(3), MUMBAI V. TRACSTAR INVESTMENT P. LTD, MUMBAI

ITA 6073/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 0956 (ITAT-MUMBAI)
• Duration Of Justice: 8 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-07-2010
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: E
• Assessment Year: 2005-2006
• Appeal Filed On: 17-11-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A K NAYAK
• Keywords: Question of law; Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL 'E' BENCH, MUMBAI BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH, ACCOUNTANT MEMBER ITA NO. 6073/MUM/2009 (ASSESSMENT YEAR: 2005-06) DCIT 7(3) M/S. TRACSTAR INVESTMENT PVT. LTD. ROOM NO. 615, 6TH FLOOR LAMINGATON CHAMBERS AAYAKAR BHAVAN, M.K. ROAD VS. 394/C, GROUND FLLOR, LAMINGATON ROAD, MUMBAI 400004 PAN - AAACT 5220 G APPELLANT RESPONDENT APPELLANT BY: SHRI A.K. NAYAK RESPONDENT BY: SHRI K.P. DEWANI O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL BY THE REVENUE IS AGAINST THE ORDER OF THE CIT(A) VII, MUMBAI DATED 19.08.2009. 2. THE ISSUE IN THE APPEAL IS WITH REFERENCE TO ESTIMA TION OF NOTIONAL INCOME AT 12% ON INTEREST FREE DEPOSIT RECEIVED BY THE ASSESSEE ON THE PROPERTY LEASED OUT AT NCPA, NARIMAN POINT. THE ASS ESSEE HAS RECEIVED AN AMOUNT OF RS.4.80 LAKHS AS ANNUAL RENT AND A DEPOSI T OF RS.3 CRORES/- FOR LETTING OUT THE HOUSE PROPERTY. THE AO CONSIDERED 12% OF THE INTEREST FEE DEPOSIT AS PART OF INCOME OF THE HOUSE TOWARDS RENT AND HE WORKED OUT THE ANNUAL VALUE AS IN EARLIER YEARS AS UNDER: - ANNUAL VALUE RS.40,80,000/- LESS: 30% REPAIRS RS.12,24,000/- INCOME FROM HOUSE PROPERTY RS.28,56,000/- LESS: INCOME FROM HOUSE PROPERTY OFFERED IN THE RETURN OF INCOME RS. 3,36,000/- RS.25,20,000 ============= 3. THE CIT(A), FOLLOWING THE ORDER OF THE ITAT IN THE IMMEDIATELY PRECEDING YEAR, DELETED THE ADDITION SO MADE. ITA NO. 6073/MUM/2009 M/S. TRACSTAR INVESTMENT PVT. LTD. 2 4. AT THE OUTSET THE LEARNED COUNSEL SUBMITTED THAT TH IS ISSUE WAS FINALISED BY THE JUDGEMENT OF THE HON'BLE BOMBAY HI GH COURT IN THE CASE OF CIT VS. STANDARD DISTILLERIES & BRAVERIES P. LTD. I N ITA NO. 1252 OF 2009 WHEREIN THE HON'BLE HIGH COURT HAS HELD AS UNDER: - 2. THE QUESTION SOUGHT TO BE RAISED IN THIS APPEAL IS COVERED BY THE JUDGEMENT OF THIS COURT IN THE CASE OF J.K. INVESTO RS LTD. V. C.I.T. REPORTED IN 248 ITR 723 (BOM.). IN THIS VIEW OF THE MATTER, WE SEE NO SUBSTANTIAL QUESTION OF LAW INVOLVED IN THIS APPEAL . APPEAL IS, THEREFORE, DISMISSED IN LIMINE WITH NO ORDER AS TO COSTS. 5. RESPECTFULLY FOLLOWING THE JURISDICTIONAL HIGH COUR T JUDGEMENT WE HOLD THAT NOTIONAL INTEREST ON INTEREST FREE DEPOSIT CAN NOT BE TREATED AS PART OF INCOME FOR COMPUTING ANNUAL LETTING VALUE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. ACCORDINGLY THE GROUNDS OF THE REV ENUE ON THIS ARE REJECTED. 6. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 30TH JULY 201 0. SD/- SD/- (N.V. VASUDEVAN) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 30 TH JULY 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) VII, MUMBAI 4. THE CIT VII, MUMBAI CITY 5. THE DR, E BENCH, ITAT, MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI N.P.