THE ACIT 12(3), MUMBAI V. M/S. SAHAR DEVELOPERS, MUMBAI

ITA 6706/MUM/2007

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8479 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 3 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: J
• Next Hearing Date: 15-02-2011
• Assessment Year: 2003-2004
• Appeal Filed On: 05-11-2007
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S K SINGH
• Keywords: Notional interest

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J, MUMBAI BEFORE SHRI R.V. EASWAR (PRESIDENT) AND SHRI B. RAMAKOTAIAH (A.M.) ITA NO.6706/MUM/2007 ASSESSMENT YEAR : 2003-2004 A.C.I.T.-12(3), R.NO.121, AAYAKAR BHAVAN, M.K. RD., MUMBAI 400 020. VS. SAHAR DEVELOPERS 1103/04, TULSIANI CHAMBERS, 212, NARIMAN POINT, MUMBAI 400 021. PAN : AAAFS7166B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI S.K. SINGH (SR. D.R.) RESPONDENT BY : SMT. AARTI VISSANJI O R D E R PER B. RAMAKOTAIAH, A.M. THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER DATED 02.08.2007 OF THE CIT(A)-XII, MUMBAI RELATING TO A SSESSMENT YEAR 2003-04. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS UNDER: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW, THE LEARNED CIT(A) ERRED IN DELETING THE AD DITION OF NOTIONAL INTEREST OF ` 23,73,450/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY BY HOLDING THAT THE ASSESSEES CASE WILL BE GOVERNED BY THE PROVISION OF SECTION 23(1)(B) AND N OT 23(1)(A) AND THAT THE ASSESSEES CASE IS SQUARELY COVERED BY THE JURISDICTIONAL HIGH COURT IN THE CASE OF CIT VS. J. K. INVESTORS. 2. WHILE ALLOWING RELIED AND PLACING RELIANCE ON T HE JUDGMENT OF JURISDICTIONAL HIGH COURT IN THE CASE O F J.K. INVESTORS (BOM) REPORTED IN 248 ITR 723 (BOM), THE LEARNED CIT(A) HAS IGNORED THE LAST PARA OF THE ABOVE RULIN GS, WHEREIN IT HAS LEFT OPEN THE SCOPE OF CONSIDERING THE INTEREST ON THE INTEREST FREE DEPOSIT AS FAIR RENT UNDER SECTION 23 (1)(A). 3. AT THE TIME OF HEARING, LEARNED COUNSEL FOR THE ASSESSEE, AT THE OUTSET SUBMITTED THAT THE ISSUE STANDS COVERED IN FAVOUR O F THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ITA NO.3164/M/2009 FOR ASSESSMENT YEAR 2004- 05 IN THE CASE OF THE ASSESSEE ITSELF. ITA NO.6706/MUM/2007 ASSESSMENT YEAR : 2003-2004 2 3.1 THE LEARNED DR, ON THE OTHER HAND WHILE SUPPORT ING THE ORDER OF THE ASSESSING OFFICER FAIRLY CONCEDED THAT THE ISSUE HA S BEEN DECIDED BY THE TRIBUNAL IN FAVOUR OF THE ASSESSEE. 4. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE O RDERS OF THE AUTHORITIES BELOW. WE FIND THAT IDENTICAL ISSUE CA ME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.3164/M/2009 VIDE O RDER DATED 28.01.2011 FOR ASSESSMENT YEAR 2004-05 AND THE ISSUE HAS BEEN DECIDED IN FAVOUR OF THE ASSESSEE. IT WAS HELD THAT NOTIONAL INTEREST O N INTEREST FREE SECURITY DEPOSIT SHOULD NOT BE ADDED TO THE RENT IN VIEW OF THE DECISION OF THE JURISDICTIONAL HIGH COURT IN THE CASE OF J.K. INVES TORS (BOM) REPORTED IN 248 ITR 723 (BOM). ON FACTS ALSO THE ACTUAL RENT RECEIV ED WAS RS.2,17,64,719 WHEREAS MUNICIPAL RATEABLE VALUE WAS RS.31,24,224 A ND THE STANDARD RENT WAS RS.18,60,830. THEREFORE, FOLLOWING THE ORDER OF THE COORDINATE BENCH OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR AY 2004-05, WE DECIDE THE ISSUE IN FAVOUR OF THE ASSESSE AND UPHOLD THE ORDER OF CIT(A ). ACCORDINGLY GROUNDS TAKEN BY THE REVENUE IN THE IMPUGNED APPEAL ARE DIS MISSED. 5. IN THE RESULT, APPEAL FILED BY THE REVENUE IS DI SMISSED. ORDER PRONOUNCED ON THIS 24 TH DAY OF FEBRUARY, 2011. SD/- (R.V. EASWAR) PRESIDENT SD/- (B. RAMAKOTAIAH) ACCOUNTANT MEMBER MUMBAI, DATED 24.02.2011. JANHAVI COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)- , MUM BAI 4. COMMISSIONER OF INCOME TAX, CITY- , MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH J, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI