JCIT RG 23(2), MUMBAI V. ANAND AUTOMOBILES, MUMBAI

ITA 80/MUM/2013

• Counselvise Citation: [2014] 120 COUNSELVISE.COM (IT) 5822 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-03-2014
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 03-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANVENDVA GOYAL
• Assessee Lawyers: RAJESH S ATHAVALE
• Keywords: Notional interest
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A, MUMBAI BEFORE SHRI P.M. JAGTAP, ACCOUNTANT MEMBER AND DR. S.T.M. PAVALAN, JUDICIAL MEMBER ITA NO. 80/MUM/2013 ASSESSMENT YEAR: 2009-10 JCIT RG-23(2) C-10, 2 ND FLOOR ROOM NO. 202, PRATYAKSHAKAR BHAVAN, BANDRA KURLA COMPLEX, BANDRA (EAST), MUMBAI-400 051 VS. ANAND AUTOMOBILES, 4 TH FLOOR, MAGNET HOUSE, BALLARD ESTATE FORT, MUMBAI-400 038 (APPELLANT) (RESPONDENT) PERMANENT ACCOUNT NO. :- AADFA 9171 D ASSESSEE BY : SHRI RAJESH S. ATHAVALE REVENUE BY : SHRI MANVENDVA GOYAL DATE OF HEARING : 19.03.2014 DATE OF PRONOUNCEMENT : 28.03.2014 O R D E R PER DR. S.T.M. PAVALAN, JM: THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAIN ST THE ORDER OF THE LD.CIT(A)-33, MUMBAI DATED 23.10.2012 FOR THE ASSES SMENT YEAR 2009-10. IN THIS APPEAL, THE REVENUE HAS AGITATED THE ACTION OF THE LD.CIT(A) IN DELETING THE NOTIONAL INTEREST ASSESSED BY THE AO @ 10% OF THE INTEREST F REE DEPOSIT FOR THE PURPOSE OF CALCULATING THE HOUSE PROPERTY INCOME. 2. BRIEFLY STATED, THE ASSESSEE HAD DISCLOSED UNSEC URED LOANS OF RS.45,64,00,000/- REPRESENTING INTEREST FREE ADVANC ES TAKEN FROM THE TENANT. IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT, THE AO CON SIDERED THE INTEREST FREE ADVANCES OBTAINED FROM THE TENANT FOR DETERMINING T HE ANNUAL LETTING VALUE OF THE PROPERTY U/S 23 OF THE ACT. ACCORDINGLY, THE AO COM PUTED THE INCOME FROM THE HOUSE PROPERTY BY ADDING 10% OF THE AVERAGE OF INTE REST FREE DEPOSIT AND THEREBY DETERMINED INCOME FROM HOUSE PROPERTY AT RS.4,58,82 ,602/- AS AGAINST THE RENT ITA NO. 80/MUM/2013 ANAND AUTOMOBILES, ASSESSMENT YEAR: 2009-10 2 SHOWN BY THE ASSESSEE AT RS.1,88,44,419/-. ON APPEA L, THE LD.CIT(A) DELETED THE IMPUGNED ADDITION BY RELYING ON THE ORDERS OF THE T RIBUNAL IN THE ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2008-09. AGGRIEVED BY THE IMPUGNED ORDER, THE REVENUE IS IN APPEAL BEFORE US. 3. HAVING HEARD BOTH THE SIDES AND PERUSED THE MATE RIAL ON RECORD IT IS PERTINENT TO MENTION THAT THE NOTIONAL INTEREST ON THE INTERE ST FREE SECURITY DEPOSIT IS NOT A RENT LIABLE TO BE INCLUDED IN THE INCOME FROM HOUSE PROPERTY UNDER THE INCOME-TAX ACT 1961 AS DECIDED BY THE DELHI HIGH COURT IN THE CASE OF CIT VS. MONI KUMAR SUBA AND OTHERS . THEREFORE, THE REVENUE HAS NO CASE WITH REGARD TO THE ADDITION OF NOTIONAL INTEREST ON INTEREST FREE SECURITY DEPOSIT , WHICH IS NOT THE RENT LIABLE TO BE INCLUDED IN THE INCOME OF HOUSE PROPERTY. ALSO, IT IS OBSERVED THAT THE TRIBUNAL IN THE ASSESSEES OWN CASE, HAS DELETED SIMILAR ADDITIONS MADE IN THE ASSESSMENT YEARS 1998-1999, 1999-2000, 2000-2001, 2001-2002, 2002-03 , 2003-2004 ETC. SINCE THE LD.CIT(A) HAS RIGHTLY RELIED ON THE DECISION OF THE TRIBUNAL FOR DELETING THE IMPUGNED ADDITION, WE DO NOT FIND ANY JUSTIFIABLE REASON TO INTERFERE WITH THE SAID ORDER OF THE LD.CIT(A) AND THUS THE SAME IS UPHELD. 4. IN THE RESULT, THE APPEAL FILED BY THE REVENUE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 8 TH DAY OF MARCH, 2014. SD/- SD/- (P.M. JAGTAP) (DR. S.T.M. PAVALAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 28.03.2014. *SRIVASTAVA COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR A BENCH //TRUE COPY// BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.