DCIT 12(2), MUMBAI V. MANMOHAN VIR KAKKAR, MUMBAI

ITA 966/MUM/2009

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 8173 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-02-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 13-12-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 12-02-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: HARIGOVIND SINGH

Judgement Text

1 ITA NO.966/MUM/2009 ASSTT. YEAR : 2004-05. IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B, MUMBAI BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI J. SUDHAKAR REDDY, ACCOUNTANT MEMBER I.T.A. NO. 966/MUM/2009. ASSESSMENT YEAR : 2004-05. DY. COMMISSIONER OF INCOME-TAX, MANM OHAN VIR KAKKAR, 12(2), MUMBAI. VS. 11-B, JOLLY MAKER APTS.-I, CUFFE PARADE, COLABA, MUMBAI 400 008. PAN :AGMPK 0934B APPELLANT. RESPONDENT. APPELLANT BY : SHRI HARI GOVIND SINGH. RESPONDENT BY : NONE. O R D E R PER J. SUDHAKAR REDDY, A.M. : THIS IS AN APPEAL FILED BY THE REVENUE DIRECTED AG AINST THE ORDER OF THE CIT(APPEALS)-XII, MUMBAI DATED 17-11-2008 ON THE FO LLOWING GROUNDS: 1) WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF TH E CASE AND IN LAW, TH LD. CIT(A) ERRED IN DIRECTING THE AO TO ACCEPT THE PROPERTY INCOME AT RS.,68,000/- AS AGAINST RS.21,91,547/- ASSESSED AS PER THE PROVISIONS OF SEC. 23(1)(A) OF THE I.T. ACT, 1961. 1.B) WHILE DOING SO, THE LD. CIT(A) ERRED IN NOT CO NSIDERING THE DECISION OF THE HONBLE MUMBAI ITAT IN THE CASE OF CHEM MECH PV T. LTD. HOLDING THAT IF THE ACTUAL RENT RECEIVED OR RECEIVABLE IS MORE T HAN THE STANDARD RENT OR ANNUAL MUNICIPAL VALUE, THEN THE ACTUAL RENT IS TO BE FIXED AT 8.5% ON THE TOTAL INVESTMENT AS PER THE BOMBAY RENT CONTROL ACT . 2 ITA NO.966/MUM/2009 ASSTT. YEAR : 2004-05. 2. BOTH THE PARTIES SUBMITTED THAT THE ISSUE IS IDE NTICAL TO THE ISSUE THAT AROSE BEFORE THE I-BENCH OF THE TRIBUNAL IN THE ASSESSEE S OWN CASE FOR THE EARLIER ASSESSMENT YEAR 2002-03 AND THE TRIBUNAL VIDE ITS O RDER DATED 26 TH FEB., 2008, DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. IN FAC T THE FIRST APPELLATE AUTHORITY AT PARA 2.3 FOLLOWED THE ORDER OF THE TRIBUNAL FOR THE ASSESSMENT YEAR 2002-03. 3. AFTER PERUSING THE ORDER OF THE TRIBUNAL IN THE ASSESSEES OWN CASE IN ITA NO. 5387/MUM/2005 FOR THE ASSESSMENT YEAR 2002-03, WE FIND NO INFIRMITY IN THE FINDING OF THE CIT(APPEALS) THAT THE ISSUE IS COVER ED IN FAVOUR OF THE ASSESSEE. THE TRIBUNAL AT PARA 5.1 AT PAGE 3 HELD AS FOLLOWS : 5.1 THE ASSESSING OFFICER IS EMPOWERED TO DETERMIN E THE ANNUAL LETTING VALUE U/S 23(1)(A) OF THE ACT. IF THE ACTUAL RENT I S MORE THAN THE ANNUAL LETTING VALUE DETERMINES U/S 23(1)(A) THEN ONLY THE ACTUAL RENT HAS TO BE CONSIDERED AS THE ANNUAL LETTING VALUE OF THE PROPERTY. IN THE CASE IN HAND, WE HAVE TO SEE WHETHER THE ASSESSING OFFICER HAS CORRECTLY COM PUTED THE ANNUAL LETTING VALUE U/S 23(1)(A) OF THE ACT. IT IS NOBODYS CASE THAT SECTION 23(1)(B) COMES INTO PLAY. IN HIS CASE THE ASSESSEE HAS RECEIVED AN AMOUNT OF RS.3.9 CRORES AS INTEREST FREE SECURITY DEPOSIT AND INVESTED THE SAM E IN FIXED DEPOSITS AND SUCH OTHER INVESTMENTS AND EARNED INCOME ON THE SAM E. THIS INCOME HAS BEEN OFFERED TO TAX BY THE ASSESSEE. WHEN THE ANNUA L LETTING VALUE IS DETERMINED ALL ATTENDING CIRCUMSTANCES AND FACTS OF THE CASE HAVE TO BE CONSIDERED. THE ASSESSING OFFICER HAS WRONGLY RELIE D ON A CASE WHERE NO DEPOSIT WAS INVOLVED. NO OTHER COMPARATIVE CASES WE RE BROUGHT ON RECORD. THE ASSESSMENT WAS NOT PROVIDED WITH ANY OF THE MAT ERIAL ON WHICH THE ASSESSING OFFICER RELIED ON. KEEPING THE TOTAL FACT S AND CIRCUMSTANCES OF THE CASE IN VIEW WE ARE OF THE CONSIDERED OPINION THAT THE FIRST APPELLATE AUTHORITY HAS COME TO A REASONABLE CONCLUSION THAT IN VIEW OF THE HUGE DEPOSIT IN THIS CASE THE RENT FIXED BY THE ASSESSEE AND THOMAS COOK (I) LTD. SHOULD BE ACCEPTED AS THE ANNUAL LETTING VALUE. WE FIND NO INFIRMITY IN THE ORDER AND UPHOLD THE SAME. 3 ITA NO.966/MUM/2009 ASSTT. YEAR : 2004-05. 4. RESPECTFULLY FOLLOWING THE SAME, WE UPHOLD THE F INDINGS OF THE CIT(APPEALS). 5. IN THE RESULT, THE APPEAL OF THE REVENUE IS DISM ISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH FEBRUARY , 2011. SD/- SD/- (N.V. VASUDEVAN) (J. SUDH AKAR REDDY) JUDICIAL MEMBER. A CCOUNTANT MEMBER MUMBAI, DATED: 25 TH FEBRUARY, 2011. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR, B-BENCH (TRUE COPY) BY ORDER ASSTT. REGI STRAR, ITAT, MUMBA I.