ACIT-21(2), MUMBAI V. VRAJRAJ S MORARJEE, MUMBAI

ITA 7568/MUM/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 3791 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-05-2013
• Appeal Filed By: Department
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 21-02-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 09-11-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: V SAXENA
• Keywords: Fair market value; Notional interest
• Section: 68

Judgement Text

, IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES F MUMBAI , . . / , . . BEFORE SHRI VIJAY PAL RAO, JUDICIAL MEMBER & SHRI RAJENDRA, ACCOUNTANT MEMBER . / ITA NO. 7568/MUM/2011 ! ! ! ! ' ' ' ' / ASSESSMENT YEAR 2008-09 A.C.I.T. 21(2), MUMBAI. VS. SHRI VRAJRAJ MORARJEE, 1, PRIME BEACH, GANDHI GRAM, JUHU, MUMBAI-400 049. PAN: AIZPM 2330 E REVENUE BY : SHRI V. SAXENA ASSESSEE BY : SHRI MEHUL SHAH ! # $% / DATE OF HEARING : 06-05-2013 &'' # $% / DATE OF PRONOUNCEMENT : 15-05-2013 () / O R D E R PER RAJENDRA, A.M./ , . . THE PRESENT APPEAL IS DIRECTED AGAINST THE ORDER DT . 25-08-2011 PASSED BY THE CIT(A)-32, MUMBAI. FOLLOWING GROUNDS OF APPEAL HAVE BEEN RAISED BY THE ASSESSING OFFICER (AO): 1.ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND I N LAW, THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION MADE ON ACCOUNT OF U NEXPLAINED CASH CREDIT AMOUNTING TO RS. 22,00,000/-. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(APPEALS) HAS ERRED IN DELETING THE ADDITION MADE TO THE ANNUAL L ETTING VALUE OF HOUSE PROPERTY ON THE BASIS OF NOTIONAL INTEREST. 3. ON THE FACTS AND CIRCUMSTANCES OF THE CASE, AND IN LAW, THE LD. CIT(APPEALS) HAS ERRED IN NOT CONSIDERING THE DECISIONS OF DCIT VS. APAR LTD., AND ITO VS. CHEM MECH P. LTD., AND ITO VS. BAKER TECHNICAL SERVICES P. LTD., WHEREIN IT IS HELD THAT BENEFIT DERIVED BY THE ASSESSEE FROM INTEREST FREE DEPOSITS COULD BE TAKEN INTO CONSIDERATION FOR DETERMINATION OF FAIR RENTAL VALU E. 2. ASSESSEE, AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 29-11-2008 DECLARING TOTAL INCOME OF RS. 1,14,78,820/-. ASSESSMENT WAS FINALISED BY THE ASSESSING OFFICER (AO) ON 27-12-2010 U/S.143(3) OF THE INCOME TAX ACT ,1961(ACT) DETERMINING TOTAL INCOME OF THE ASSESSEE AT RS. 1.75 CRORES. ITA NO. 7568/MUM/2011 SHRI VRAJRAJ MORARJEE 2 3. THE FIRST GROUND OF APPEAL IS ABOUT DELETING THE AD DITION MADE BY THE AO ON ACCOUNT OF UN-EXPLAINED CASH CREDIT AMOUNTING TO RS .22 LAKHS. DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT ASSESSEE HAD DEPOSITED C ASH ON AS MANY AS 12 OCCASIONS IN THE MONTH OF APRIL 2007 IN HIS BANK A/C IN HSBC BANK AND STANDARD CHARTERED BANK. AO DIRECTED THE ASSESSEE TO EXPLAIN THE SOUR CE OF CASH DEPOSITED IN THE SAID BANKS. AFTER CONSIDERING THE SUBMISSIONS OF THE AS SESSEE DATED. 04-11-2010 AND 16-11-2010, AO HELD THAT THE ASSESSEE HAD MADE DRAW INGS OF RS.37.99 LAKHS DURING THE FINANCIAL YEAR (FY) 2006-07 AND RS.37.43 LAKHS DURING THE FY 2007-08, THAT ASSESSEE REQUIRED A SUBSTANTIAL AMOUNT FOR HOUSE-HO LD EXPENSES, THAT WITHDRAWALS FOR BOTH THE AYS WERE ALMOST IN THE SAME RANGE, THAT AS SESSEE COULD NOT HAVE BEEN LEFT WITH SUBSTA -NTIAL SAVINGS DURING THE FY 2006-07 WH ICH COULD HAVE BEEN DEPOSITED IN THE SUBSEQU -ENT AY, THAT CLAIM MADE BY THE ASSES SEE ABOUT DEPOSITING 16LAKHS FROM WITHDRAWAL OF FY 2006-07 WAS FACTUALLY INCORRECT, T HAT AMOUNTS WITHDRAWN AT DIFFERENT DATES WERE UTILISED FOR MEETING DIFFERENT EXPENSES, THAT AMOUNTS DEPOSITED IN BANK A/CS. IN APRIL 2007 WERE FROM THE UN-ACCOUNTED SOURCES FOR WHICH NO PROPER EXPLANATION WAS OFFERED BY THE ASSESSEE. FINALLY, HE HELD THAT CASH DEPOSITS MADE IN APRIL 2007 WERE FROM THE UN-ACCOUNTED INCOME OF THE ASSESSEE. AN AMOUNT OF RS. 22 LAKHS WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE AS UN-EXPLAINED CASH CREDIT. 3.1. ASSESSEE PREFERRED AN APPEAL BEFORE THE FIRST APPEL LATE AUTHORITY (FAA). AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDER, HE HELD THAT APPELLANT WAS TO BUY A PLOT OF LAND AT HIS NATIVE P LACE I.E.KUTCH,(GUJARAT), THAT PART PAYMENT WAS MADE BY THE ASSESSEE IN THIS REGARD, TH AT ALL WITHDRAWALS HAD BEEN MADE IN A SHORT SPAN OF TIME IN EARLIER YEARS, THAT WITH DRAWALS HAD BEEN MADE FROM 22-12- 2006 TO 07-04-2007, THAT THERE WERE NO CASH DEPOSIT S DURING THAT PERIOD IN THE BANK A/C IMMEDIATELY, THAT CASH WAS RE-DEPOSITED DURING THE PERIOD FROM 10-04-2007 TO 23-04-2007 IN THE BANK A/CS., THAT CLAIM OF THE ASS ESSEE ABOUT RE-DEPOSITING THE MONEY THAT WAS WITHDRAWN EARLIER HAD TO BE CONSIDERED GEN UINE, THAT AO HAD NOT BROUGHT ANY RECORD TO SUGGEST THAT CASH WITHDRAWAL DURING EARLI ER PERIOD WAS NOT AVAILABLE FOR RE- DEPOSITING, THAT SOURCE OF CASH DEPOSITED COULD NOT BE TREATED AS UNEXPLAINED. FINALLY, HE DELETED THE ADDITION MADE BY THE AO. 3.2. BEFORE US, DEPARTMENTAL REPRESENTATIVE (DR)SUBMITTE D THAT AFTER INCURRING HOUSE-HOLD EXPENDITURE ASSESSEE WAS NOT LEFT WITH SURPLUS FUND THAT COULD BE CARRIED FORWARD TO SUBSEQUENT FY, THAT THE SUBMISSION MADE BY THE ASSESSEE WAS AN AFTER- THOUGHT, THAT NO EVIDENCE ABOUT PURCHASE OF LAND WA S PRODUCED BY THE ASSESSEE DURING ASSESSMENT PROCEEDINGS. AUTHORISED REPRESENTATIVE (AR) SUBMITTED THAT FROM THE WITHDRAWALS MADE IN EARLIER YEAR CASH WAS DEPOSITED IN THE BANK A/CS., THAT WITHDRAWN AND DEPOSIT OF CASH WAS NOT ON SAME DATES. HE REFE RRED TO PG. NOS. 11 & 12 OF THE PAPER BOOK IN THIS REGARD. 3.3. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT BEFORE THE AO, ASSESSEE HAD CLAIMED THAT REASON FOR WITHDRAWAL AND RE- DEPOSIT OF THE MONEY WAS TO PURCHASE A PLOT OF AGRI CULTURAL LAND BY THE ASSESSEE AT HIS NATIVE PLACE. WE FIND THAT PAGE NO. 19 OF THE PB I S ABOUT THE PLOT OF LAND THAT WAS TO BE PURCHASED IN SURAT DISTRICT, WHEREAS BEFORE THE AO AND CIT(A) ASSESSEE SUBMITTED THAT LAND WAS TO BE PURCHASED IN KUTCH DISTRICT OF GUJARAT. THE SAID PAPER TALKS ABOUT RECEIPT OF RS.2 LAKHS FROM THE ASSESSEE BY ONE SHRI MOHAN BHAI NAROTHAM BHAI PATEL. THIS UN-DATED PLAIN-PAPER DOCUMENT IS ACCOMPANIED B Y EXTRACTS OF 7/12. WE ARE OF THE OPINION THAT FROM THESE PAPERS DO NOT PROVE ANYTHIN G. IF THE WITHDRAWALS FOR BOTH THE ITA NO. 7568/MUM/2011 SHRI VRAJRAJ MORARJEE 3 YEARS ARE COMPARED IT BECOMES CLEAR THAT THEY ARE O F THE SAME RANGE. IN THESE CIRCUMSTANCES, THE CLAIM OF THE ASSESSEE THAT A SUM OF RS. 16 LAKHS WERE DEPOSITED OUT OF THE WITHDRAWALS MADE IN THE EARLIER AY. CANN OT BE ACCEPTED IN ABSENCE OF SOME POSITIVE EVIDENCES. 3.4. IN TAX-MATTERS, LIABILITY TO PAY TAXES IS DECIDED O N PRE-PONDERANCES ON PROBABILITIES EVIDENCE REQUIRED IN THE CRIMINAL C ASES DO NOT DECIDE THE TAXATION MATTERS. THE CASH -DEALINGS OF THE ASSESSEE FOR THE YEAR UNDER CONSIDERATION ARE AGAINST NORMAL HUMAN BEHAVIOR. AS PER THE SETTLED LAW OF TAXATION IN ALL CASES IN WHICH A RECEIPT IS SOUGHT TO BE TAXED AS INCOME, TH E BURDEN LIES ON THE AO TO PROVE THAT IT IS WITHIN THE TAXING PROVISION AND IF A REC EIPT IS IN THE NATURE OF INCOME, THE BURDEN OF PROVING THAT IT IS NOT TAXABLE BECAUSE IT FALLS WITHIN EXEMPTION PROVIDED BY THE ACT LIES UPON THE ASSESSEE. BUT, IN VIEW OF PRO VISIONS OF SECTION 68 OF THE ACT ,WHERE ANY SUM IS FOUND CREDITED IN THE BOOKS OF TH E ASSESSEE FOR ANY PREVIOUS YEAR THE SAME MAY BE CHARGED TO INCOME-TAX AS THE INCOME OF THE ASSESSEE OF THAT PREVIOUS YEAR IF THE EXPLANATION OFFERED BY THE ASSESSEE ABO UT THE NATURE AND SOURCE THEREOF IS, IN THE OPINION OF THE AO, NOT SATISFACTORY. IN SUCH A CASE THERE IS, PRIMA FACIE, EVIDENCE AGAINST THE ASSESSEE, VIZ., THE RECEIPT OF MONEY. IF HE FAILS TO REBUT, THE SAID EVIDENCE BEING UN-REBUTTED, CAN BE USED AGAINST HIM BY HOLDING THAT IT WAS A RECEIPT OF AN INCOME NATURE. IN OUR OPINION WHILE CONSIDERING THE EXPLANATION OF THE ASSESSEE AO HAS ACT REASONABLY. WE FIND THAT THE CLAIM OF WI THDRAWAL OF AMOUNTS FOR PURCHASING PLOT OF LAND AT SURAT AND RE-DEPOSITING THE SAME IN THE BANK A/CS.IS NOT BEEN SUPPORTED BY ANY PLAUSIBLE EXPLANATION. AFTER CONSIDERING THE WITHDRAWALS MADE BY THE ASSESSEE, WE ARE OF THE OPINION THAT ASSESSE E DID NOT HAVE SUFFICIENT FUNDS AT THE END OF THE AY. 2006-07, WHICH COULD BE DEPOSITED IN THE BANKS IN THE YEAR UNDER CONSIDERATION. IN OTHER WORDS WE DO NOT AGREE WITH THE SUBMISSION OF THE ASSESSEE THAT IT HAD SUFFICIENT FUNDS THAT WERE CARRIED FORWARD F ROM THE EARLIER AY AND WERE DEPOSITED IN THE BANK A/CS DURING THE YEAR UNDER CO NSIDERATION. WHILE DECIDING THE ISSUE WE HAVE CONSIDERED THE PRINCIPLES LAID DOWN, ABOUT PREPONDERANCE OF PROBABILITY, BY THE HONBLE SUPREME COURT IN THE MA TTER OF SUMATI DAYAL (281IR14). REVERSING THE ORDER OF THE FAA, WE DECIDE GROUND NO .1 IN FAVOUR OF THE AO. 4. NEXT TWO GROUNDS OF APPEAL ARE ABOUT DELETION OF AD DITION MADE TO ANNUAL LETTING VALUE (ALV) OF HOUSE PROPERTY ON THE BASIS OF NOTIONAL INTEREST. DURING THE ASSESSMENT PROCEEDINGS, AO FOUND THAT ASSESSEE HAD EARNED GROSS RENTAL INCOME OF RS. 1.65 CRORES BEING 50% OF HIS SHARE IN VARIOUS P ROPERTIES OWNED BY HIM AS CO- OWNER, THAT WHILE GIVING THE PROPERTY ON LEASE, ASS ESSEE HAD TAKEN INTEREST FREE DEPOSITS BESIDE RECEIVING RENTAL INCOME. SINCE THE INTEREST FREE DEPOSITS OF ALL THE PROPERTIES WAS MORE THAN ONE YEARS RENT, SO THE AO CONSIDERED THE NOTIONAL INTEREST ON THESE DEPOSITS TO BE A PART OF RENT RECEIVABLE A S AN ADDITIONAL BENEFIT WHICH HAD ACCRUED TO THE ASSESSEE IN THE FORM OF INTEREST FRE E DEPOSITS. AO DIRECTED THE ASSESSEE TO FILE EXPLANATION IN THIS REGARD AND AFTER CONSID ERING HIS REPLY, HE HELD THAT THE STATE OF AFFAIRS SHOWN BY THE ASSESSEE WAS NOT OF REAL NA TURE, THAT ASSESSEE WAS ENJOYING THE FRUITS OF INTEREST FREE DEPOSITS ON WHICH HE WOULD HAVE REQUIRED TO PAY INTEREST IF HE WOULD HAVE BORROWED THE SAME FROM THE BANK/MARKET. ACCORDINGLY, RELYING UPON THE DECISIONS OF MCDOWELL &COMPANY LTD (154 ITR 148) AN D JUGGILAL KAMLAPAT (73 ITR 702) DELIVERED BY THE HONBLE SUPREME COURT, HE CON CLUDED THE ASSESSEE WAS NOT SHOWING REAL INCOME BASED ON THE BENEFITS DERIVED F ROM THE SAID PROPERTIES. AO FURTHER RELIED UPON THE ORDERS OF THE ITAT MUMBAI I N THE CASE OF M/S. TIVOLI INVESTMENT AND TRADING CO. P. LTD., (ITA NO. 3269/B OM/1993 AND 3009/BOM/1994 ITA NO. 7568/MUM/2011 SHRI VRAJRAJ MORARJEE 4 DT. 30-06-2003). HE ALSO RELIED UPON THE DECISION OF APAR LTD, CHEM MECH. P. LTD (83 ITD 427) AND BAKER TECHNICAL SERVICES P. LTD., (30 DTR 1) TO SUPPORT HIS CONTENTION THAT BENEFIT DERIVED BY THE ASSESSEE FRO M INTEREST FREE DEPOSITS COULD BE TAKEN INTO CONSIDERATION FOR DETERMINATION OF FAIR RENTAL VALUE (FRV). ACCORDINGLY, AO COMPUTED THE INTEREST @ 12% ON THE TOTAL DEPOSIT S OF 3.19 CRORES AND ADDED THE SUM OF RS. 38.28 LAKHS TO THE INCOME OF THE ASSESSE E UNDER THE HEAD PROPERTY. 5. ASSESSEE PREFERRED AN APPEAL BEFORE THE FAA. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ASSESSMENT ORDE R, HE HELD THAT AO HAD MADE THE ADDITION BY CONSIDERING THE NOTIONAL INTEREST AS PA RT OF ALV BY RELYING ON THE DECISION OF M/S. TIVOLI INVESTMENT AND TRADING CO. P. LTD., (SUPRA), THAT THE SAID DECISION OF THE MUMBAI TRIBUNAL HAD BEEN RE-CONSIDERED IN SUBSE QUENT YEAR, THAT IN THE SUBSEQUENT YEAR THE WHOLE ISSUE WAS RE-EXAMINED, TH AT IT WAS HELD BY THE TRIBUNAL THAT THOUGH THE AO CAN DETERMINE THE REASONABLY EXP ECTED RENT THERE YEAR TO YEAR BUT NOTIONAL INTEREST ON INTEREST FREE DEPOSITS COULD N OT BE THE DETERMINATIVE FACTOR FOR ARRIVING AT FRV, THAT THE CASE OF THE ASSESSEE WAS ON A BETTER FOOTING, THAT THE ASSESSEE HAD RECEIVED SUFFICIENT RENT, THAT THE DEPOSITS WER E ONLY 20% OF THE ACTUAL RENT UNLIKE THE CASE OF M/S. TIVOLI INVESTMENT AND TRADING CO. P. LTD., (SUPRA) WHEREIN NO RENT AT ALL WAS RECEIVED. RELYING UPON THE CASE OF MONI KU MAR SUBBA [240 CTR 97 (FB)(DEL)] DELIVERED BY THE FULL BENCH OF HONBLE H IGH COURT OF DELHI, HE HELD THAT NOTIONAL INTEREST ON DEPOSIT WAS NOT INCLUDABLE IN FRV EVEN IF AOS FINDING WAS THAT THE RENT RECEIVED WAS LESS THAN THE FAIR MARKET REN T (FMR), THAT THE ADDITION WAS MADE BY THE AO BY MERELY CONSIDERING THE BENEFIT OF NOTIONAL INTEREST ON THE INTEREST FREE DEPOSITS ALSO AS PART OF ALV U/S. 23(1)(B) OF THE ACT, THAT THE RENT CHARGED BY THE ASSESSEE WAS QUITE REASONABLE, THAT THE AO HAD NOT BROUGHT ANY MATERIAL TO SHOW THAT ACTUAL RENT RECEIVED BY THE APPELLANT WAS LESS THAN THE FMR. HE FINALLY HELD THAT PROPERTIES HAD BEEN ACTUALLY LET-OUT AND THE RENT R ECEIVED WAS MUCH MORE THAN THE MUNICIPAL RATABLE VALUE. THEREFORE, THE PROVISIONS OF SECTION 23(1)(B) WOULD APPLY, THAT AO HAD NOWHERE IN THE ASSESSMENT ORDER DISPUTE THE APPLICABILITY OF SAID SECTION, THAT ONCE THE PROVISIONS OF SECTION 23(1)( B) WERE APPLICABLE AND THERE WAS NO FINDING PASSED ON ANY MATERIAL THAT THE ACTUAL RENT WAS NOT THE FAIR RENT THE CASE OF THE ASSESSEE WOULD BE COVERED BY DECISION DELIVERED BY THE HONBLE HIGH COURT OF BOMBAY IN THE CASES OF JK INVESTORS [248 ITR 723] A ND AKSHAY TEXTILES [214 CTR 316] WHERE IT HAD BEEN CATEGORICALLY HELD THAT NOTI ONAL INTEREST COULD NOT FORM PART OF ACTUAL RENT AS CONTEMPLATED BY SECTION 23(1)(B) OF THE ACT, THAT THE ACTUAL RENT WAS HIGHER THAN THE MUNICIPAL VALUATION HAD TO BE TAKEN AS ALV. ADDITION MADE BY THE AO AMOUNTING TO RS. 38.28 LAKHS TO THE ALV MADE BY THE AO ON THE BASIS OF NOTIONAL INTEREST WAS DELETED BY HIM. 6. BEFORE US, DR RELIED UPON THE ORDER OF THE AO. AR SUBMITTED THAT OUT OF SEVEN PROPERTIES, ONLY TWO PROPERTIES OF COMMERCIAL NATURE AND REST WERE RESIDENTIAL PROPERTIES, THAT AO HAD NOT BROUGHT ON RECORD ANY M ATERIAL TO PROVE THAT PROPERTIES WERE CAPABLE OF YIELDING EARNING MORE RENTALS, THAT THE SECURITY DEPOSIT WAS RS. 64.45 LAKHS, THAT ASSESSEE HAD RECEIVED ADVANCE RENTAL OF RS. 2.54 CRORES FROM THE TENANTS. HE RELIED UPON THE CASES OF JK INVESTORS (SLP NO. 5 480/2001 BEFORE HONBLE SUPREME COURT) AND ASIAN HOTELS LTD., (ITA NO. 794/ 2007) DELIVERED BY HONBLE HIGH COURT OF DELHI. HE ALSO REFERRED TO THE CASE OF RECLAMATION REALTY INDIA PVT. LTD., DELIVERED BY THE ITAT MUMBAI VIDE ITA NO. 141 1/MUM/2007 IN THIS REGARD. ITA NO. 7568/MUM/2011 SHRI VRAJRAJ MORARJEE 5 7. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL PUT BEFORE US. IT IS FOUND THAT ASSESSEE WAS CO-OWNER OF SEVEN RESIDE NTIAL/COMMERCIAL PROPERTIES, THAT HE EARNED GROSS RENTAL OF RS. 1,65,87,500/- BEING 5 0% OF THE CO-OWNERS OF THE SAID PROPERTIES, THAT RENTAL VALUE FOR BOTH THE CO-OWNER S WAS RS. 3,31,75,000/-. ASSESSEE HAS TAKEN DEPOSITS AS WELL AS ADVANCE RENTALS FROM THE TENANTS. IT IS FOUND THAT ASSESSEE HAD RECEIVED SECURITY DEPOSITS OF RS. 64,4 5,530/- WHEREAS RS. 2,54,58,435/- WERE THE ADVANCE RENTALS THAT WERE ADJUSTED AGAINST THE RENTS OF THE NEXT YEAR. AO HAS NOT DONE ANY EXERCISE TO FIND OUT THE FMV FROM THE NEIGHBORING SOCIETIES OR FROM THE LOCALITY CONCERNED WHERE THE PROPERTIES WERE SITUAT ED. AO WAS OF THE OPINION THAT INTEREST FREE DEPOSITS RESULTED IN NOTIONAL INCOME TO THE ASSESSEE. WE FIND THAT ISSUE OF NOTIONAL INTEREST ON DEPOSITS TO DETERMINE ALV OF A PROPERTY HAS BEEN FINALLY DECIDED BY VARIOUS COURTS IN FAVOUR OF THE ASSESSEE. IN TH E CASE OF MONI KUMAR SUBBA (SUPRA), HONBLE HIGH COURT OF DELHI HAS DECIDED AS UNDER: .THE AO, HAVING REGARD TO THE AFORESAID PROVISI ON IS EXPECTED TO MAKE AN INQUIRY AS TO WHAT WOULD BE THE POSSIBLE RENT THAT THE PROPERT Y MIGHT FETCH. THUS, IF HE FINDS THAT THE ACTUAL RENT RECEIVED IS LESS THAN THE 'FAIR/MARKET RENT' BECAUSE OF THE REASON THAT THE ASSESSEE HAS RECEIVED ABNORMALLY HIGH INTEREST-FREE SECURITY DEPOSIT AND BECAUSE OF THAT REASON, THE ACTUAL RENT RECEIVED IS LESS THAN THE RENT WHICH TH E PROPERTY MIGHT FETCH, HE CAN UNDERTAKE NECESSARY EXERCISE IN THAT BEHALF. HOWEVER, BY NO S TRETCH OF IMAGINATION, THE NOTIONAL INTEREST ON THE INTEREST-FREE SECURITY CAN BE TAKEN AS DETER MINATIVE FACTOR TO ARRIVE AT A 'FAIR RENT'. PROVISIONS OF S. 23(1)(A) DO NOT MANDATE THIS. THE DIVISION BENCH IN ASIAN HOTELS LTD. (SUPRA), THUS, RIGHTLY OBSERVED THAT IN A TAXING ST ATUTE IT WOULD BE UNSAFE FOR THE COURT TO GO BEYOND THE LETTER OF THE LAW AND TRY TO READ INTO T HE PROVISION MORE THAN WHAT IS ALREADY PROVIDED FOR. WE MAY ALSO RECORD THAT EVEN THE BOMB AY HIGH COURT IN THE CASE OF CIT VS. J.K. INVESTORS (BOMBAY) LTD. (2001) 168 CTR (BOM) 1 89 : (2001) 248 ITR 723 (BOM) CATEGORICALLY REJECTED THE FORMULA OF ADDITION OF N OTIONAL INTEREST WHILE DETERMINING THE 'FAIR RENT'.. CONSIDERING THE FACTS AND CIRCUMSTANCES O F THE CASE UNDER CONSIDERATION, WE ARE OF THE OPINION THAT THE ORDER OF THE FAA DOES NOT S UFFER FROM ANY LEGAL INFIRMITY. THEREFORE, UPHOLDING THE ORDER, WE DECIDE BOTH THE GROUNDS OF APPEAL AGAINST THE AO. AS A RESULT, APPEAL FILED BY THE AO STANDS PARTLY ALLOWED. * +, ! -% . (/0 # 1 ) , 23 # $ 45. ORDER PRONOUNCED IN THE OPEN COURT ON 15 TH MAY, 2013 () # &'' 7 8(! 15 ,2013 ' # 1 > SD/- SD/- ( / VIJAY PAL RAO ) ( / RAJENDRA ) (+ / JUDICIAL MEMBER (+ / ACCOUNTANT MEMBER / MUMBAI, 8(!/ DATE: 15 TH MAY, 2013 TNMM ITA NO. 7568/MUM/2011 SHRI VRAJRAJ MORARJEE 6 () () () () # ## # @$ @$ @$ @$ A'$ A'$ A'$ A'$ / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT/ BC 2. RESPONDENT/ @DBC 3. THE CONCERNED CIT(A)/ E F 4. THE CONCERNED CIT/ E F 5 . DR F BENCH, ITAT, MUMBAI / G1 @$ ! , . . . 6. GUARD FILE/ 1 D$ @$ //TRUE COPY// ()! ()! ()! ()! / BY ORDER, H HH H / 4 4 4 4 DY./ASST. REGISTRAR , / ITAT, MUMBAI