ITO WD 2(1)(4), MUMBAI v. HIREMATH CHEMICALS P. LTD, NAVI MUMBAI

ITA 1852/MUM/2010 | 2006-2007
Pronouncement Date: 22-07-2011 | Result: Dismissed

Appeal Details

RSA Number 185219914 RSA 2010
Bench Mumbai
Appeal Number ITA 1852/MUM/2010
Duration Of Justice 1 year(s) 4 month(s) 14 day(s)
Appellant ITO WD 2(1)(4), MUMBAI
Respondent HIREMATH CHEMICALS P. LTD, NAVI MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 22-07-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted H
Tribunal Order Date 22-07-2011
Date Of Final Hearing 04-07-2011
Next Hearing Date 04-07-2011
Assessment Year 2006-2007
Appeal Filed On 09-03-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH H MUMBAI BEFORE SHRI P.M.JAGTAP ACCOUNTANT MEMBER & SHRI R.S. PADVEKAR JUDICIAL MEMBER. I.T.A. NO. 1852/MUM/2010. ASSESS MENT YEAR : 2006-07. THE INCOME-TAX OFFICER M/S HIREMATH CHEMICALS P. LTD. WARD-2(1)(4) VS. 603 A GREAT EASTERN CHAMBERS MUMBAI. SECTOR II C.B.D. BELAPUR NAVI MUMBAI 4000 614. APPELLANT. RESPONDENT. APPELLANT BY : SHRI A.G. NAYAK. RESPO NDENT BY : SHRI NITESH JOSHI. O R D E R. PER P.M. JAGTAP A.M. : THIS APPEAL IS PREFERRED BY THE REVENUE AGAINST TH E ORDER OF LEARNED CIT(APPEALS)-4 MUMBAI DATED 16-12-2009 WHEREBY HE DELETED THE ADDITION OF RS.7 50 000/- MADE BY THE AO ON ACCOUNT OF NOTIONAL INTEREST ON SECURITY DEPOSIT TREATING THE SAME AS DEEMED RENT. 2. WE HAVE HEARD THE ARGUMENTS OF BOTH THE SIDES AN D ALSO PERUSED THE RELEVANT MATERIAL ON RECORD. AS POINTED OUT BY THE LEARNED C OUNSEL FOR THE ASSESSEE FROM THE COMPUTATION OF INCOME GIVEN IN THE ASSESSMENT ORDER THE RENTAL INCOME RECEIVED BY THE ASSESSEE WAS BROUGHT TO TAX IN THE HANDS OF THE ASSESSEE BY THE AO UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION AND THIS POSITION HAS NOT BEEN 2 ITA NO.1832/MUM/2010 ASSESSMENT YEAR : 2006-07 DISPUTED EVEN BY THE LEARNED DR. AS FURTHER POINTED OUT BY THE LEARNED COUNSEL FOR THE ASSESSEE A SIMILAR ADDITION OF RS.7 50 000/- M ADE IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR 2004-05 AND 2005-06 ON ACCOUNT OF N OTIONAL INTEREST TREATING THE SAME AS DEEMED RENT WAS DELETED BY THE TRIBUNAL VID E ITS ORDER DATED 28 TH OCT. 2010 PASSED IN ITA NOS. 921 AND 922/MUM/2010 HOLDIN G THAT SUCH ADDITION COULD BE MADE ONLY UNDER THE HEAD INCOME FROM HOUSE PROP ERTY. THE ISSUE INVOLVED IN THE YEAR UNDER CONSIDERATION THUS IS SQUARELY COVER ED BY THE ORDER OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEARS 2004-05 AND 2005-06 AND RESPECTFULLY FOLLOWING THE SAME WE UPHOLD THE IMPUGNED ORDER OF THE LEARNED CIT(APPEALS) DELETING THE ADDITION OF RS.7 50 000/- MADE BY THE AO UNDER THE HEAD PROFITS AND GAINS OF BUSINESS OR PROFESSION TREATING THE NOTIO NAL INTEREST ON SECURITY DEPOSITS AS DEEMED RENT. 3. IT IS ALSO OBSERVED THAT THE TAX EFFECT INVOLVED IN THIS APPEAL FILED BY THE REVENUE IS LESS THAN RS.3 LAKHS AND THE SAME THERE FORE IS NOT MAINTAINABLE AND THIS POSITION HAS NOT BEEN DISPUTED EVEN BY THE LEA RNED DR. AS PER THE CBDT INSTRUCTION NO. 3 OF 2011 ISSUED ON 09-02-2011 THE MONETARY LIMIT FOR FILING OF AN APPEAL BY THE DEPARTMENT BEFORE THE TRIBUNAL HAS BE EN REVISED TO RS.3 LAKHS. AS DECIDED BY THE CBDT APPEALS SHALL NOT BE FILED BY THE DEPARTMENT IN CASES WHERE TAX EFFECT DOES NOT EXCEED RS.3 LAKHS. IN THE CASE OF CIT VS. MADHUKAR INAMDAR (HUF) 318 ITR 149 THE HONBLE BOMBAY HIGH COURT HA S HELD THAT CBDT INSTRUCTION FIXING ANY MONETARY LIMIT FOR FILING TH E APPEAL WOULD APPLY EVEN FOR THE PENDING CASES. KEEPING IN VIEW THE SAID DECISION OF HONBLE JURISDICTIONAL HIGH COURT AND THE BOARD INSTRUCTION NO. 3 OF 2011 DATED 09-02-2011 WE HOLD THAT THE PRESENT APPEAL FILED BY THE DEPARTMENT INVOLVING TA X EFFECT OF LESS THAN RS.3 LAKHS 3 ITA NO.1832/MUM/2010 ASSESSMENT YEAR : 2006-07 IS NOT MAINTAINABLE. THE SAME IS THEREFORE LIABL E TO BE DISMISSED ON THIS GROUND ALSO. 4. IN THE RESULT THE APPEAL OF THE REVENUE IS DISM ISSED. . ORDER PRONOUNCED ON THIS 22 ND DAY OF JULY 2011. SD/- SD/- (R.S. PADVEKAR) (P.M. JAGTAP) JUDICIAL MEMBER A CCOUNTANT MEMBER MUMBAI DATED: 22 ND JULY 2011. WAKODE COPY TO : 1. APPELLANT 2. RESPONDENT 3. C.I.T. 4. CIT(A) 5. DR H-BENCH. (TRUE COPY ) BY ORD ER ASSTT. R EGISTRAR ITAT MUMBAI BEN CHES MUM BAI.