ITO 9(2)(1), MUMBAI V. CAN PROPERTIES PVT. LTD., MUMBAI

ITA 859/MUM/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 0181 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-09-2017
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: SMC
• Next Hearing Date: 11-05-2017
• Assessment Year: 2012-2013
• Appeal Filed On: 07-02-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V JANARDHANAN
• Assessee Lawyers: DR P DANIEL
• Keywords: Tax effect

Judgement Text

, SMC , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER ITA NO.859/MUM/2017 : ASST.YEAR 2012-2013 THE INCOME TAX OFFICER WARD 9(2)(1) MUMBAI. / VS. M/S.CAN PROPERTIES PRIVATE LIMITED 24, 2 ND FLOOR, THOSARWADI HANUMAN ROAD NO.1 NEAR SHIV LEELA HOTEL, VILE PARLE (E) MUMBAI 400 057. PAN : AADCC7832L. ( / APPELLANT) ( / RESPONDENT) /APPELLANT BY : SHRI V.JANARDHANAN /RESPONDENT BY : DR.P.DANIEL / DATE OF HEARING : 05.07.2017 / DATE OF PRONOUNCEMENT : 04.09.2017 / O R D E R THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST THE ORDER OF LEARNED CIT(A) DATED 16.11.2016 AND PERTAINS TO ASSESSMENT YEAR 2012-2013. 2. THE GROUNDS OF APPEAL READ AS UNDER:- 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT- (A) ERRED IN WAS RIGHT IN HOLDING THAT THE FAIR RENTAL VALUE SPECIFIED IN SECTION 23(L)(A) IS THE MUNICIPAL VALUE OR ACTUAL RENT RECEIVED WHICHEVER IS HIGHER AND NOT THE ANNUAL LETTING VALUE ON THE BASIS OF COMPARABLE INSTANCES AS ADOPTED BY THE AO, THOUGH THE PROPERTY WAS NOT COVERED BY THE RENT CONTROL ACT?' 2. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS RIGHT IN REMITTING THE MATTER BACK TO THE FILE OF THE AO WITH DIRECTION TO VERIFY THE RATABLE VALUE FIXED BY THE MUNICIPAL AUTHORITIES AND IF THE SAME IS LESS THAN THE ACTUAL RENT RECEIVED, THEN THE ACTUAL RENT RECEIVED SHOULD BE TAXED?' ITA NO.859/MUM/2017. M/S.CAN PROPERTIES PRIVATE LIMITED. 2 3. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) WAS RIGHT IN IGNORING THE FACT THAT THE FAIR MARKET RENT OF THE PROPERTY WAS SUBSTANTIALLY HIGHER WHICH WAS EVIDENT FROM THE RENTALS IN AREA AND THE SUBSTANTIAL DEPOSITS RECEIVED ESPECIALLY IN THE LIGHT OF THE DECISION OF BAKER TECHNICAL PVT LTD. WHERE IN IT WAS HELD THAT WHERE PROPERTIES ARE NOT SUBJECT TO RENT CONTROL ACT VARIOUS FACTORS HAVE TO BE TAKEN IN TO CONSIDERATION FOR DETERMINING AS TO WHAT CONSTITUTED THE FAIR RENTAL VALUE OF THE PROPERTY INCLUDING FACTORS LIKE COMPARABLE INSTANCES AND COST OF CONSTRUCTION?' 4. 'THE APPELLANT PRAYS THAT THE ORDER OF CIT(A) ON THE ABOVE GROUND BE SET ASIDE AND THAT OF THE ITO-9(2) (2) BE RESTORED.' . 5. 'THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY.' 3. AT THE OUTSET IN THIS CASE, LEARNED COUNSEL OF THE ASSESSEE GAVE A WORKING SHOWING THAT THE TAX EFFECT IN THIS CASE IS RS.8,54,673, WHICH IS LESS THAN THE LIMIT OF RS.10 LAKH FIXED BY THE CBDT FOR FILING APPEAL BEFORE THE ITAT AS PER THE LATEST CIRCULAR ISSUED IN 2015. FURTHERMORE, LEARNED COUNSEL SUBMITTED THAT THE ISSUE IS ALSO COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT IN ASSESSEES OWN CASE IN ITA NO.7294/MUM/2013 FOR ASSESSMENT YEAR 2010-2011, VIDE ORDER DATED 25.05.2016. 4. UPON HEARING BOTH THE COUNSEL AND PERUSING THE RECORDS, I FIND THAT THE TAX EFFECT IN THIS CASE IS ADMITTEDLY BELOW THE LIMIT FIXED BY THE CBDT FOR FILING APPEALS BEFORE THE ITAT. THERE ARE CERTAIN EXCEPTIONS CARVED OUT IN THE SAID CIRCULAR OF THE CBDT. HOWEVER, THE LEARNED DEPARTMENTAL REPRESENTATIVE DID NOT POINT OUT THAT THE ISSUE IN THIS APPEAL WAS FALLING IN THE EXCEPTIONS CARVED OUT BY THE SAID CIRCULAR. IN THIS FACTUAL CONSPECTUS, IN MY CONSIDERED OPINION, THIS APPEAL IS LIABLE TO BE DISMISSED IN LIMINE ON ACCOUNT OF TAX EFFECT. SINCE THE APPEAL IS BEING DISMISSED IN LIMINE ADJUDICATION ON MERITS IS UNCALLED FOR. ACCORDINGLY THIS APPEAL IS DISMISSED IN LIMINE ON ACCOUNT OF TAX EFFECT. ITA NO.859/MUM/2017. M/S.CAN PROPERTIES PRIVATE LIMITED. 3 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED, IN LIMINE. ORDER PRONOUNCED ON THIS 04 TH DAY OF SEPTEMBER, 2017. SD/- ( SHAMIM YAHYA ) ACCOUNTANT MEMBER MUMBAI; DATED : 04 TH SEPTEMBER, 2017. DEVDAS* / COPY OF THE ORDER FORWARDED TO : / BY ORDER, //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT, MUMBAI. 4. / CIT(A), MUMBAI 5. , , / DR, ITAT, MUMBAI 6. [ / GUARD FILE.