ACIT (OSD-I) CR-7, MUMBAI v. VIDHI DARSH RUIA, MUMBAI

ITA 1059/MUM/2009 | 2005-2006
Pronouncement Date: 20-04-2010

Appeal Details

RSA Number 105919914 RSA 2009
Assessee PAN AAUPR4091A
Bench Mumbai
Appeal Number ITA 1059/MUM/2009
Duration Of Justice 1 year(s) 2 month(s) 3 day(s)
Appellant ACIT (OSD-I) CR-7, MUMBAI
Respondent VIDHI DARSH RUIA, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 20-04-2010
Appeal Filed By Department
Bench Allotted F
Tribunal Order Date 20-04-2010
Date Of Final Hearing 12-04-2010
Next Hearing Date 12-04-2010
Assessment Year 2005-2006
Appeal Filed On 16-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH F BEFORE SHRI N.V. VASUDEVAN (JM) & PRAMOD KUMAR (AM) I.T.A.NO. 1059/MUM/2009 (ASSESSMENT YEAR : 2005-0 6) ACIT (OSD-I) CENTRAL RANGE-7 ROOM NO. 413 4 TH FLOOR AAYAKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. SMT. VIDHI DARSH RUIA 6-A 3 RD FLOOR SAMUDRA GAURAV APARTMENTS WORLI SEA FACE MUMBAI-400 025. APPELLANT RESPONDENT PAN/GIR NO. : AAUPR4091A ASSESSEE BY : SHRI VIJAY KOTHARI DEPARTMENT BY : SHRI V. OJHA ORDER PER N.V. VASUDEVAN JM :- THIS IS AN APPEAL BY THE REVENUE AGAINST THE ORDER DATED 18.12.2008 OF LEARNED CIT(A)-CENTRAL V MUMBAI RELA TING TO A.Y. 2005- 06. 2. GROUNDS OF APPEAL RAISED BY THE REVENUE READ AS FOLLOWS :- 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND I N LAW LEARNED CIT(A) ERRED IN DELETING THE ADDITION OF RS . 24.68 LAKHS MADE IN RESPECT OF THE CONCESSION RECEIVED BY THE ASSESSEE (DIRECTOR) BEING 50% OF THE ANNUAL RENT OF THE PROPERTY LET OUT TO M/S. RAMGOPAL GANPATRAI AND SON S (P) LTD. 2) ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN L AW LEARNED CIT(A) ERRED IN NOT APPRECIATING THE FACT T HAT THE SAID CONCESSION IS SQUARELY COVERED BY SECTION 2(24 )(IV) OF THE I.T. ACT. 3. THE ASSESSEE IS AN INDIVIDUAL. SHE DERIVES INCOM E IN THE FORM OF SALARY FROM M/S. KILLICK MARINE SERVICES LIMITED. I N COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y. 2005-06 IN THE CASE OF ONE M/S. SMT. VIDHI DARSH RUIA 2 RAMGOPAL GANPATRAI AND SONS (P) LTD.(RGS) THE ASSE SSING OFFICER OF RGS NOTICED THAT THE ASSESSEE WAS IN OCCUPATION OF A FLAT NAMELY FLAT NO. 6-A SAMUDRA GAURAV APARTMENTS WORLI SEAFACE ABDU L GAFFARKHAN ROAD WORLI MUMBAI-400 025. THE ASSESSEE WAS PAYI NG ANNUAL RENT OF RS. 30 000/-. THE ASSESSEE WAS A DIRECTOR OF M/S. R AMGOPAL GANPATRAI AND SONS (P) LTD. (IN SHORT RGS). ACCORDING TO THE ASSESSING OFFICER RENT CHARGED BY THE RGS WAS VERY LOW; AND BY CHARGING OF SUCH LOW RENT RGS HAS BEEN OBLIGING ONE OF ITS DIRECTOR NAMELY THE AS SESSEE IN THIS APPEAL AND CONSEQUENTLY THE ASSESSEE WAS GETTING BENEFIT IN THE FORM OF PERQUISITES U/S. 17(2)(III)(A) OF THE ACT VIZ. TH E BENEFIT OF CONCESSIONAL RENT. THE ASSESSING OFFICER IN THE CASE OF RGS DETE RMINED ANNUAL LETTING VALUE OF THE FLAT AT RS. 49 36 320/-. 4. THE ASSESSING OFFICER OF THE ASSESSEE AFTER MAKI NG A REFERENCE TO THE ABOVE ASSESSMENT IN THE HANDS OF RSG TREATED 50% O F THE AFORESAID VALUE DETERMINED BY THE ASSESSING OFFICER OF RSG AS PERQUISITES IN THE HANDS OF THE ASSESSEE. IT APPEARS THAT TWO DIRECTOR S WERE OCCUPYING TWO FLATS AND THEREFORE 50% OF THE SHARE WAS TREATED AS PERQUISITES IN THE HANDS OF THE ASSESSEE. 5. ON APPEAL BY THE ASSESSEE LEARNED CIT(A) HELD T HAT THERE WAS NO EMPLOYER-EMPLOYEE RELATIONSHIP BETWEEN THE ASSESSEE AND RGS; AND THEREFORE LEARNED CIT(A) HELD THAT PROVISIONS OF S ECTION 17(2)(III)(A) ARE NOT ATTRACTED IN THE ASSESSEES CASE. ADDITION MAD E IN THE HANDS OF THE ASSESSEE WAS DELETED BY LEARNED CIT(A). LEARNED CIT (A) ALSO FOUND THAT THE ASSESSEE WAS NOT WHOLE TIME EMPLOYEE OR DIRECTO R OF THE RGS. AGGRIEVED BY THE ORDER OF LEARNED CIT(A) REVENUE H AS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 6. AT THE TIME OF HEARING OF THIS APPEAL IT WAS BR OUGHT TO OUR NOTICE THAT IN THE CASE OF THE RGS ANNUAL VALUE DETERMINED BY THE ASSESSING OFFICER HAD COME UP FOR CONSIDERATION BEFORE THE TR IBUNAL IN ITA NO. 696/MUM/2009 AND THIS TRIBUNAL HELD THAT RENT PAID WAS MORE THAN THE SMT. VIDHI DARSH RUIA 3 STANDARD RENT OR MUNICIPAL RATEABLE VALUE; AND THER EFORE THE ASSESSING OFFICER HAD TO DETERMINE ANNUAL VALUE U/S. 23(1)(B) OF THE ACT AND THUS ANNUAL VALUE WAS DIRECTED BE DETERMINED AT RS. 30 0 00/-. IN VIEW OF THE ABOVE DECISIONS IN THE CASE OF RGS WE ARE OF THE V IEW THAT THE ADDITION MADE BY THE ASSESSING OFFICER IN THE HANDS OF THE A SSESSEE CANNOT BE SUSTAINED. WE ARE ALSO OF THE VIEW THAT THERE WAS N EITHER A BENEFIT NOR PERQUISITES OBTAINED BY THE ASSESSEE FROM RGS; THER EFORE PROVISIONS OF SECTION 2(24)(IV) OF THE ACT WILL ALSO NOT APPLY. WE FIND NO MERITS IN THIS APPEAL BY THE REVENUE; CONSEQUENTLY THE SAME IS DI SMISSED. ORDER HAS BEEN PRONOUNCED ON 20 TH DAY OF MARCH 2010. SD/- (PRAMOD KUMAR) ACCOUNTANT MEMBER SD/- (N.V. VASUDEVAN) JUDICIAL MEMBER DATED : 20 TH APRIL 2010 COPY TO : 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A)-CONCERNED. 4. THE CIT CONCERNED. 5. THE DR CONCERNED MUMBAI 6. GUARD FILE BY ORDER TRUE COPY ASSTT. REGISTRAR ITAT MUMBAI PS