SANJAY KUMAR MAINI, MUMBAI V. ITO WD 8(2)(1), MUMBAI

ITA 6378/MUM/2013

• Counselvise Citation: [2015] 121 COUNSELVISE.COM (IT) 0633 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-05-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Assessment Year: 2010-2011
• Appeal Filed On: 30-10-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Assessee Lawyers: SUNIL S JHUNJHUNWALA

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH E , MUMBAI BEFORE SHRI R.C. SHARMA , ACCOUNTANT MEMBER AND SHRI SANJAY GARG , JUDICIAL MEMBER ITA NO. 6378/M/2013 ASSESSMENT YEAR: 2010 - 11 SHRI SANJAY KUMAR MAINI, E - 109, MITTAL PARK, ARMY CLUB ROAD, NE AR RUIA PARK, JUHU, VILE PARLE (WEST), MUMBAI 400 049 PAN: ADJPM 6319 A VS. THE INCOME TAX OFFICER, WARD 8(2)(1), AAYAKAR BHAVAN, MUMBAI (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI N ITESH JOSHI, A R. & SHRI SUNIL S. JHUNJHUNWALA, A.R. REVENUE BY : SHRI NEIL PHILIP, D.R. DATE OF HEARING : 19.03 .201 5 DATE OF PRONOUNCEMENT : 27.05. 2015 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY TH E ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] DATED 17.08.2013 RELEVANT TO ASSESSMENT YEAR 2010 - 11. 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THE LEARNED COMMISSION ER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING REDUCTION OF IN EXEMPTION FOR HOUSE RENTAL ALLOWANCE BY RS. 2,40 , 000/ - U/S 10(13A) OF THE ACT. 2. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN REJECTING THE CLAIM OF THE APPELLANT OF RENT PAID OF RS. 9,00 , 000/ - FOR THE PURPOSES OF COMPUTING HRA. 3. THE APPELLANT CRAVES LEAVE TO ALTER, AMEND AND / OR ADD ANY OTHER GROUND OF APPEAL. ITA NO.6378/M/2013 SHRI SANJAY KUMAR MAINI 2 3. THE SOLE ISSUE TAKEN BY THE ASSESSEE, THROUGH HIS GROUNDS OF APPEAL, IS RELATING TO THE REDUCTION IN THE EXEMPTION CLAIMED BY THE ASSESSEE UNDER SECTION 10(13A) OF THE INCOME TAX ACT IN RELATION TO HOUSE RENT ALLOWANCE. 4. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) OBSERVED THAT THE ASSESSEE H AD CLAIMED HOUSE RENT AL LOWANCE OF RS.5,75,220/ - UNDER SECTION 10(13A). WHEN ASKED TO EXPLAIN THE ASSESSEE SUBMITTED THE WORKING OF CALCULATION OF HRA. THE AO OBSERVED THAT THE ASSESSEE HAD TAKEN TOTAL AMOUNT OF RENT PAID DURING THE YEAR AT RS.9,00,000/ - . HE, HOWEVER, OBSERVED FROM THE LEAVE AND LICENSE AGREEMENT THAT THE MONTHLY RENT PAYABLE WAS RS.55,000/ - . HE THEREFORE CALCULATED THE YEARLY RENT AT RS.6,60,000/ - AND WORKED OUT THE EXEMPTION ALLOWABLE UNDER SECTION 10(13A) ACCORDINGLY AND REDUCED THE CLAIM OF EXEMPTION BY RS .2,40,000/ - . 5. IN APPEAL, IT WAS SUBMITTED BEFORE THE LD. CIT(A) THAT THE ASSESSEE HAD PAID RENT OF RS.9 LAKHS DURING THE YEAR. THE AMOUNT OF RENT WAS DIVIDED IN TWO PARTS FOR THE CONVENIENCE OF THE OWNER. A SUM OF RS.55,000/ - WAS IN RESPECT OF PREMI SES AND RS.20,000/ - WAS IN RESPECT OF FURNITURE. THE LETTING OUT OF PROPERTY AND OF FURNITURE WAS INSEPARABLE. LD. CIT(A), HOWEVER, OBSERVED THAT AS PER THE PROVISIONS OF THE LAW , THE HOUSE RENT ALLOWANCE WAS RESTRICTED TO THE REPAYMENT OF THE RENT OF THE HOUSE AND NOT TO ANY OTHER PAYMENT AS WAS CONTENDED BY THE ASSESSEE. HE THEREFORE UPHELD THE DISALLOWANCE MADE BY THE AO. THE ASSESSEE HAS THUS COME IN APPEAL BEFORE US. 6. WE HAVE HEARD THE RIVAL CONTENTIONS OF THE LD. REPRESENTATIVES OF BOTH THE PART IES AND HAVE ALSO GONE THROUGH THE RECORDS. ADMITTEDLY, THE ASSESSEE HAD PAID A TOTAL RENT OF RS.9 LAKH DURING THE YEAR UNDER CONSIDERATION. THE TOTAL AMOUNT WAS DIVIDED IN TWO PARTS I.E. ONE PART FOR THE PREMISES AND THE OTHER FOR THE FURNITURE & FIXTUR ES. BOTH THE AGREEMENTS FOR PREMISES AS WELL AS FURNITURE & FIXTURES WERE EXECUTED SIMULTANEOUSLY AND WERE FOR THE SAME ITA NO.6378/M/2013 SHRI SANJAY KUMAR MAINI 3 PERIOD. THE AGREEMENT FOR FURNITURE & FIXTURES WAS COTERMINOUS AND CO EX TENSIVE WITH THE LEAVE AND LICENSE AGREEMENT AND IT WAS PROVIDE D THAT BOTH THE AGREEMENTS WOULD RUN CONCURRENTLY. A PERUSAL OF THE LIST OF FURNITURE & FIXTURES SHOWS THAT THE ITEMS MENTIONED THEREIN E.G. AIR CONDITIONER, FANS, FRIDGE, WASHING MACHINE, GEYSER, LIGHTS, WATER PURIFIER (ACQUAGUARD) WERE NOT INTENDED TO B E RENTED SEPARATELY AS THE SAME WERE INSEPARABLE AND WERE PART AND PARCEL OF THE PREMISES. THE OTHER ITEMS SUCH AS T.V., GAS CYLINDER, GAS STOVE, SCENERY, SOFA SET, TABLE ETC. WERE IN THE SHAPE OF BASIC AMENITIES OF ACCOMMODATION. NOW - A - DAYS, IT IS COMMO NLY KNOWN THAT THE PREMISES/FLATS ARE RENTED OUT ALONG WITH FURNITURE & FIXTURES FOR THE CONVENIENCE OF THE TENANT AS WELL AS OF THE OWNER. THE OWNER WAS SUPPOSED TO RENT OUT THE PREMISES AS WELL AS THE FURNITURE & FIXTURES ALONG WITH THE HOUSE AND HE WAS NOT SUPPOSED TO LIFT THE SAID FURNITURE & FIXTURES FROM THE HOUSE AT THE TIME OF RENTING OUT THE PREMISES. THE FURNITURE & FIXTURES WERE PART AND PARCEL OF THE PREMISES WHICH WERE TAKEN ON RENT BY THE ASSESSEE. THE ASSESSEE, THEREFORE, HAS RIGHTLY WORKE D OUT THE EXEMPTION UNDER SECTION 10(13A) TAKING THE ANNUAL RENT AT RS.9 LAKH. THE DISALLOWANCE OF EXEMPTION MADE BY THE LOWER AUTHORITIES IS THEREFORE SET ASIDE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 27.05. 201 5 . SD/ - SD/ - ( R.C. SHARMA ) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 27.05.2015 . * KISHORE , SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI ITA NO.6378/M/2013 SHRI SANJAY KUMAR MAINI 4 THE CIT ( A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.