ITO 9(1)(4), MUMBAI v. GRANDEUR PROPERTIES P. LTD, MUMBAI

ITA 2056/MUM/2010 | 2006-2007
Pronouncement Date: 28-01-2011 | Result: Dismissed

Appeal Details

RSA Number 205619914 RSA 2010
Assessee PAN AACCG3837C
Bench Mumbai
Appeal Number ITA 2056/MUM/2010
Duration Of Justice 10 month(s) 17 day(s)
Appellant ITO 9(1)(4), MUMBAI
Respondent GRANDEUR PROPERTIES P. LTD, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-01-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted G
Tribunal Order Date 28-01-2011
Assessment Year 2006-2007
Appeal Filed On 12-03-2010
Judgment Text
ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 1 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI G BENCH MUMBAI [BEFORE SHRI SHRI PRAMOD KUMAR ACCOUNTANT MEMBER AND V. DURGA RAO JUDICIAL MEMBER ] ITA NO.: 2056/MUM/10 ASSESSMENT YEAR: 2006007 INCOME TAX OFFICER 9(1)(4) .. APPELLAN T AAYAKAR BHAVAN M.K. ROAD MUMBAI. VS. GRANDEUR PROPERTIES PVT LTD. RESPONDENT 5/40 CCI COLONY UNNAT NAGAR M.G.ROAD GOREGAON(WEST) MUMBAI-62 PA NO.AACCG 3837 C APPEARANCES: PAVAN VED FOR THE APPELLANT S.E.DASTUR FOR THE RESPONDENT O R D E R 1. BY WAY OF THIS APPEAL THE ASSESSING OFFICER HAS CHALLENGED CORRECTNESS OF CIT(A)S ORDER DATED 22 ND JANUARY 2010 FOR THE ASSESSMENT YEAR 2006-07. 2. GRIEVANCES RAISED BY THE ASSESSING OFFICER ARE A S FOLLOWS: 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CA SE AND IN LAW ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 2 THE LD CIT (A) ERRED IN DELETING THE DISALLOWANCE O F THE PROPORTIONATE INTEREST COMPONENT OF RS.3 25 33 488 ON THE EXCESS CONSIDERATION AMOUNT PAID TO THEIR OWN GROUP FOR PU RCHASING THE PROPERTIES WHICH WAS 182% MORE THAN THE MARKET VALU E. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD CIT (A) ERRED IN NOT CONSIDERING THE FACT THAT T HE PROVISIONS OF SECTION 40A(2) OF THE I.T.ACT 1961 IS CLEARLY APPL ICABLE IN THE CASE OF ASSESSEE FOR THE EXPENDITURE INCURRED IN A BUSIN ESS OF PROFESSION INVOLVING PAYMENTS MADE TO THE TAX PAYER S RELATIVES OR ASSOCIATE CONCERNS IS LIABLE TO BE DISALLOWED TO TH E EXTENT IT IS FOUND TO BE EXCESSIVE. 3. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD CIT (A) ERRED IN NOT CONSIDERING THE FACT THAT T HE PROVISION OF SECTION 92 & 93 OF THE I.T.ACT 1961 IS CLEARLY APP LICABLE IN THE CASE OF ASSESSEE COMPANY SINCE THE ASSESSEE HAS BRO UGHT THE PROPERTIES AT EXCESSIVE PRICE GENERATING EXEMPT INC OME IN THE HANDS OF GROUP COMPANY. FURTHER THE ASSESSEE COMPA NY WAS ALSO CLAIMING THE INTEREST EXPENSES WHICH WAS NOT AVAILA BLE TO THE GROUP COMPANY HENCE IT WAS CLEAR THAT THE PROPERTI ES BOUGHT AT THE EXCESSIVE PRICE ATTRACTS THE PROVISIONS OF CHAP TER X OF THE I.T.ACT THOUGH THE TRANSACTION IS NOT AN INTERNATIO NAL TRANSACTION BUT THE MODUS OPERANDI OF THE ASSESSEE COMPANY IS T HE SAME TO WHOM THE PROVISION OF CHAPTER X IS APPLICABLE. 4. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CAS E AND IN LAW THE LD CIT (A) ERRED IN DELETING THE DISALLOWANCE MADE ON ACCOUNT OF PROPERTY TAX WITHOUT CONSIDERING THE FACT THAT THE PAYMENT WAS MADE BY THE HDFC LTD TO THDC LTD TOWARDS MAINTENANC E AND PROPERTY TAX AND FURTHER IN THE CERTIFICATE ISSUED BY THDC LTD NOWHERE THE NAME OF THE ASSESSEE COMPANY WAS MENTIO NED. 3. GROUND NOS 1 TO 3 PERTAIN TO CIT (A)S DELETING THE DISALLOWANCE OF RS.3 25 33 488 IN RESPECT OF INTEREST ON DEBENTURES . WE WILL TAKE UP THESE THREE GROUNDS OF APPEAL TOGETHER. 4. THE RELEVANT MATERIAL FACTS ARE LIKE THIS. HDFC LIMITED A PREMIER INSTITUTION DEALING IN HOUSING FINANCE AND DEVELOPM ENT HAD SETTLED A VENTURE CAPITAL FUND BY THE NAME OF HDFC FUND WHICH IN TUR N FLOATED DIFFERENT SCHEMES. ONE OF THESE SCHEMES WAS HDFC IT CORRIDO R FUND. THE ASSESSEE ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 3 COMPANY BEFORE US HAD RAISED A SECURED LOAN FOR A S UM OF RS.101.25 CRORES FROM HDFC IT CORRIDOR FUND BY ISSUING 10 125 VARIAB LE % SECURED REDEEMABLE OPTIONALLY CONVERTIBLE DEBENTURES OF 1 0 0 000 EACH. THE FUNDS SO RAISED BY THE ASSESSEE COMPANY WERE USED IN PURC HASING TWO PROPERTIES FROM HDFC LIMITED. THESE PROPERTIES WERE PURCHASED FOR A CONSIDERATION OF RS.101.21 CRORES WHEREAS AS PER STAMP DUTY VALUAT ION THE VALUE OF THESE PROPERTIES WAS RS.35.94 CRORES. BASED ON THE STAMP DUTY VALUATION THE ASSESSING OFFICER CAME TO THE CONCLUSION THAT THE P AYMENT MADE FOR PURCHASING THESE PROPERTIES FROM HDFC LIMITED WAS E XCESSIVE AND UNREASONABLE. THE PURCHASE TRANSACTION WAS HELD TO BE COLLUSIVE TRANSACTION AND A PART OF MANIPULATIVE PRACTICES EMPLOYED BY TH E ASSESSEE. IT WAS IN THIS BACKDROP THAT THE ASSESSING OFFICER DISALLOWED INTE REST PAID ON DEBENTURES TO THE EXTENT IT WAS USED FOR FINANCING PURCHASE OF PR OPERTIES AT EXCESSIVE PRICE. WHILE DOING SO THE ASSESSING OFFICER OBSERVED AS F OLLOWS DURING THE YEAR UNDER CONSIDERATION THE ASSESSEE C OMPANY BORROWED FUNDS FROM HDFC PROPERTY FUND BY ISSUING 1 0 125 VARIABLE % SECURED REDEEMABLE OPTIONALLY CONVERTIBLE DEBENTURE OF RS.1 00 000 EACH AGGREGATED TO RS.1 01 25 00 000 FOR ACQUIRING THE A BOVE STATED TWO RESIDENTIAL PROPERTIES. AS STATED IN THE PARAGRAPH S MENTIONED BELOW THE TOTAL CONSIDERATION PAID TO HDFC LTD FOR ACQUIRING THESE PROPERTIES WAS RS.1 01 21 72 579 AGAINST THE MARKET VALUE OF RS.35 94 11 560. THEREFORE THE EXCESS CONSIDERATION PAID WAS RS.65 27 61 019 W HICH IS 182% MORE THAN THE MARKET VALUE. UNDER ANY MARKET STANDARDS NO PRUDENT BUSINESSMAN CAN PAY SUCH A HUGE CONSIDERATION UNLES S IT IS PAID TO THEIR OWN GROUP COMPANIES/PERSONS. THE ASSESSEE COMPANY HAS CHARGED TO P&L ACCOUNT AN INTEREST COMPONENT OF RS.5 04 62 813 BEING INTEREST ON DEBEN TURES ISSUED BY THE ASSESSEE COMPANY TO THE HDFC PROPERTY FUND. THE SA ME AMOUNT HAS BEEN CLAIMED BY THE ASSESSEE COMPANY AS A DEDUCTION WHIL E COMPUTING INCOME FROM HOUSE PROPERTY. SINCE THE ASSESSEE HAS PAID E XCESS CONSIDERATION TO THE EXTENT OF RS.65 27 61 019 THE PROPORTIONATE IN TEREST COMPONENT OF RS.3 25 33 488 ON THE EXCESS CONSIDERATION AMOUNT P AID IS DISALLOWED AND ADDED TO THE INCOME FROM HOUSE PROPERTY. THE WORKI NG OF EXCESS CONSIDERATION PAID & INTEREST DISALLOWANCE IS GIVEN BELOW: ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 4 REGISTRATION RECEIPT NO.& DT. MARKET VALUE (RS.) AMOUNT PAID AS PER AGREEMENT(RS.) EXCESS AMOUNT(RS.) % OF EXCESS AMOUNT PAID TO MARKET VALUE 7136 DT.12.7.05 15 63 76 000 41 48 25 012 25 84 49 012 165% 7135 DT. 12.7.05 20 30 35 560 59 73 47 567 39 43 12 007 194% TOTAL 35 93 11 560 101 21 72 579 65 27 61 019 182% INTEREST EXPENSES ON DEBENTURES X EXCESS VALUE PAID ON PROPERTIES ACQUIRED TOTAL VALUE OF DEBENTURE ISSUED RS.50462813 X RS.652761-19 = RS. 3 25 33 488 RS.1012500000 5. AGGRIEVED BY THE STAND SO TAKEN BY THE ASSESSING OFFICER ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE THE CIT(A). LE ARNED CIT (A) UPHELD THE GRIEVANCE OF THE ASSESSEE AND DELETED THE INTEREST DISALLOWANCE BY OBSERVING AS FOLLOWS:- 4.4 I HAVE CONSIDERED THE REASONING OF THE AO AND THE SUBMISSION OF THE APPELLANT AS ELABORATED. ON A CA REFUL AND DETAILED CONSIDERATION OF THE ISSUE IT IS SEEN T H AT AO HAD DISALLOWED PROPORTIONATE INTEREST EXPENDITURE ON TH E PREMISES THAT THE TRANSACTION ENTERED INTO WITH HDFC LTD IS A COLOURABLE ONE IN ORDER TO BRING DOWN ITS TAX LIABILITY. THE MAIN THRUST IN THE ASSESSMENT ORDER IS THAT SINCE THE CONSIDERAT ION PAID IS FAR IN EXCESS OF THE MARKET VALUE AND SINCE THE TRA NSACTION IS BETWEEN ASSOCIATE CONCERNS THE TRANSACTION IS NOT AT ARMS LENGTH AND THEREFORE PROPORTIONATE INTEREST CLAIM H AS TO BE DISALLOWED. THE APPELLANT HAD CLAIMED INTEREST AS DEDUCTION FROM HOUSE PROPERTY INCOME UNDER SECTION 24 OF TH E I.T.ACT. S. 24 PERMITS TWO DEDUCTIONS WHILE COMPUTING INCOME FR OM HOUSE PROPERTY (A) STANDARD DEDUCTION AND (B) INTEREST ON BORROWED CAPITAL. INTEREST ON BORROWED CAPITAL IS ALLOWABLE AS DEDUCTION IF CAPITAL IS BORROWED FOR THE PURPOSE OF PURCHASE CO NSTRUCTION REPAIR RENEWAL OR RECONSTRUCTION OF THE PROPERTY. IN THE CASE OF THE APPELLANT IT HAD RAISED LOAN FROM HDFC IT CORR IDOR FUND BY ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 5 ISSUE OF 10125 VARIABLE % SECURED REDEEMABLE OPTION ALLY CONVERTIBLE DEBENTURES OF RS.1 00 000 EACH. THERE IS NO DISPUTE THAT THE SAID LOAN IS FOR THE PURPOSE OF PURCHASE O F THE IMPUGNED PROPERTIES. IT IS ALSO PERTINENT TO NOTE HERE THAT THE ACT PERMITS DEDUCTION OF INTEREST ON BORROWED CAPIT AL WITHOUT ANY MAXIMUM CEILING WHERE LET OUT PROPERTY IS CONCE RNED. THE RELEVANT SECTION PERMITS DEDUCTION OF INTEREST PAID ON BORROWING TO THE PERSON WHO HAS BORROWED TO ACQUIRE OR CONSTR UCT PROPERTY. UNDER THE CIRCUMSTANCES IT MUST BE HELD THAT APPELLANT SATISFIED THE CONDITION TO BE ELIGIBLE FO R DEDUCTION OF INTEREST ON BORROWED CAPITAL. 4.5 THE AO IS OF THE VIEW THAT THE CONSIDERATION PA ID IS FAR IN EXCESS OF THE MARKET VALUE AND HENCE PROPORTIONATE INTEREST TO THE EXTENT OF EXCESSIVE PAYMENT IS TO BE DISALLOW ED. VALUATION OR FIXATION OF MARKET VALUE FOR STAMP DUTY PURPOSE IS FOR THE PRIME PURPOSE OF DETERMINATION OF STAMP DUTY AND AT THE SAME TIME TO ENSURE THAT PROPERTIES ARE NOT UNDERVALUED SO AS TO DEFRAUD REVENUE. THE INCOME TAX ACT ENABLES THAT A O TO SUBSTITUTE THE VALUE AS DECLARED IF THE SALE CONSID ERATION IS LESS THAN THE VALUE ADOPTED FOR THE PAYMENT OF STAMP DUT Y. THUS THE MARKET VALUE AS FIXED BY THE STATE GOVERNMENT FOR T HE PURPOSE OF PAYMENT OF STAMP DUTY IS OPEN TO BE ADOPTED BY THE AO ONLY IN SITUATION WHENEVER IN THE COMPUTATION OF INCOME UN DER THE HEAD CAPITAL GAIN IT IS FOUND THAT WHEN THERE IS TRANSFER OF LAND OR BUILDING OR BOTH THE SALE CONSIDERATION SHOWN I S LESS THAN VALUE ADOPTED FOR PAYMENT OF STAMP DUTY. THERE IS NO ENABLING PROVISION PERMITTING THE AO TO SUBSTITUTE THE ACTUA L CONSIDERATION PAID WITH THE STAMP DUTY VALUATION SO AS TO LIMIT OR RESTRICT THE INTEREST PAID ON CAPITAL BORROWED F OR THE PURPOSE OF THE DECLARED INVESTMENT IN IMPUGNED PROPERTIES. THE PREVAILING PRICES OF PROPERTIES ARE FACTORED IN BY VARIOUS ECONOMIC AND OTHER FACTORS AND IT ALSO THE RESULT O F NEGOTIATION BETWEEN THE INTERESTED PARTIES HEDGED IN BY THE PR INCIPLE OF COMMERCIAL EXPEDIENCY. IT IS MERELY BASED ON THE T OUCHSTONE OF VALUATION FOR STAMP DUTY PURPOSES THAT THE AO STATE S THAT THE CONSIDERATION PAID IS EXCESSIVE. IN FACT THE STAMP DUTY VALUATION IS LIMITED TO THE DETERMINATION OF STAMP DUTY THE MARKET PRICE CAN INDEED BE HIGHER THAN THE STAMP DUTY VALUATION SINCE THE SAME IS DETERMINED BY MARKET FARES AND OTHER FACTOR S SUCH AS LOCATION CONVENIENCE AMENITIES ETC. 4.6 IT IS ALSO HELD THAT VIOLATION OF SEBI OR VENTU RE FUND REGULATION CANNOT BE TAKEN AS A GROUND FOR DISALLOW ANCE OF INTEREST EXPENDITURE ON CAPITAL BORROWED FOR PURPOS E OF INVESTMENT IN PROPERTY BY THE BORROWER. IN FACT IT HAS BEEN ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 6 EXPLAINED THAT THERE IS INFACT NO VIOLATION OF SEBI OR VF REGULATIONS. EVEN ASSUMING THERE IS VIOLATION IT CANNOT BE A GROUND FOR DISALLOWANCE OF INTEREST PAID ON CAPITAL BORROWED TOWARDS ACQUISITION/RECONSTRUCTION OF PROPERTY IN C OMPUTING INCOME UNDER THE HEAD HOUSE PROPERTY. 4.7 FURTHER THE AO HAS NOT BEEN ABLE TO SUBSTANTI ATE IN WHAT MANNER THE TRANSACTION ENTERED IN QUESTION IS NOT A T ARMS LENGTH APART FROM POINTING OUT THAT THE TRANSACTIO N HAS BEEN ENTERED INTO BETWEEN ASSOCIATE CONCERNS. IT IS ALS O PERTINENT TO RECALL THAT THE APPELLANT HAS POINTED OUT THAT THE TWO ENTITIES CANNOT BE TREATED AS ASSOCIATE CONCERNS IN ACCORDAN CE WITH THE RELEVANT VF REGULATIONS. MOREOVER THERE IS NO SEP ARATE AND INDEPENDENT VALUATION OF THE PROPERTIES GOT CONDUCT ED BY THE AO SO AS TO HOLD THAT THE MARKET VALUE IS MUCH LESS TH AN WHAT HAS BEEN PAID BY THE APPELLANT. HENCE THE ASSERTION T HAT THE MARKET VALUE OR THE MARKET RATE IS LESS THAN THE AGREED CO NSIDERATION IS WITHOUT BASIS. IT IS ALSO HELD THAT PROVISION OF S .92/93 AND 40A(2) ARE NOT RELEVANT OR APPLICABLE TO THE CASE O F THE APPELLANT. IN THE INSTANT CASE THE INCOME ARISING FROM THE TRANSACTION WHICH IS BETWEEN TWO DOMESTIC ENTITIE S IS TO BE CONSIDERED UNDER THE HEAD HOUSE PROPERTY INCOME A ND HENCE THE LEGISLATIVE INTENT OF THE SAID PROVISION SWILL ALSO NOT HAVE ANY BEARING ON COMPUTATION OF INCOME UNDER THE SAID HEA D. 4.8 IN THE LIGHT OF THE ABOVE DISCUSSION IT IS HE LD THAT ON THE FACTS OF THE CASE AND ON THE BASIS OF RELEVANT PROV ISIONS OF LAW THE AO ERRED IN DISALLOWING INTEREST IN PROPORTION TO THE EXTENT OF CONSIDERATION STATED TO BE IN EXCESS OF THE MARK ET VALUE. THE DISALLOWANCE THUS MADE OF RS.3 25 33 488 IS HEREBY DELETED. THIS GROUND IS ALLOWED. 6. THE ASSESSING OFFICER IS NOT SATISFIED AND IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS A LSO THE APPLICABLE LEGAL POSITION. 8. WE HAVE NOTED THAT THERE IS NO DISPUTE THAT A BO RROWING BY WAY OF DEBENTURES IN RESPECT OF WHICH INTEREST IS CLAIMED AS DEDUCTION IS DULY UTILIZED FOR THE PURPOSES OF PURCHASE OF THE PROPER TY. THERE IS ALSO NO DISPUTE THAT THERE IS NO SPECIFIC LEGAL PROVISION ENABLING DISALLOWANCE OF ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 7 INTEREST IN RESPECT OF EXCESS CONSIDERATION EVEN I F THAT BE SO PAID FOR PURCHASE OF PROPERTY. IN ANY EVENT NEITHER STAMP DUTY VALUATION IS A CONCLUSIVE PROOF OF VALUE OF PROPERTY NOR A VALUER S REPORT AS IS SUBMITTED BY THE ASSESSEE IN SUPPORT OF THE PURCHASE PRICE CAN BE SIMPLY BRUSHED ASIDE. WE ARE UNABLE TO SEE ANY MERITS IN THE ACTION OF TH E ASSESSING OFFICER. THE TRANSFER PRICING REGULATIONS AND THE PROVISIONS UND ER SECTION 40A(2) WHICH HAVE BEEN REFERRED TO IN THE GROUNDS OF APPEAL HAV E NO APPLICATION TO THE FACTS OF THIS CASE EITHER. IN OUR CONSIDERED VIEW LEARNED CIT (A) WAS FULLY JUSTIFIED IN DELETING THE IMPUGNED DISALLOWANCE OF INTEREST AND HIS ORDER DOES NOT CALL FOR ANY INTERFERENCE. 9. GROUND NOS.1 TO 3 IS THUS DISMISSED. 10. SO FAR AS GROUND NO.4 IS CONCERNED THE MATERIA L FACTS ARE LIKE THIS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS THE AS SESSING OFFICER NOTED THAT THE ASSESSEE HAS CLAIMED DEDUCTION OF RS.69 40 217 IN RESPECT OF MUNICIPAL TAXES. THIS AMOUNT IS PAID TO THDC LTD WHICH IN TURN HAD PAID THE MONEY FOR MUNICIPAL TAXES. A COPY OF THE CERTI FICATE OBTAINED FROM THDC LIMITED DISCLOSED THE TOTAL AMOUNT PAID FOR MUNICI PAL TAXES OF RS.92 19 477 OUT OF WHICH MUNICIPAL TAXES FOR THE PERIOD FROM 1. 4.2005 TO 28.6.2005 I.E. TILL THE DATE OF PURCHASE OF THE PROPERTY AMOUNTING TO RS.22 79 260 WERE PAID BY HDFC LIMITED AND BALANCE OF RS.69 40 217 WAS BOR NE BY THE ASSESSEE. THE ASSESSEE HAS FILED COPIES OF RELEVANT BANK STAT EMENT IN SUPPORT OF THE PAYMENT MADE. HOWEVER THE AO REJECTED THE CLAIM O F DEDUCTION ON THE GROUND THAT RECEIPT WAS ISSUED BY THDC LIMITED AND THAT BANK STATEMENT SHOWS ONLY PAYMENT BUT NOT THE BENEFICIARY AND THA T THE CERTIFICATE ISSUED BY THDC LIMITED DOES NOT REFLECT THE NAME OF THE AS SESSEE. AGGRIEVED BY THE DISALLOWANCE THE ASSESSEE CARRIED THE MATTER IN AP PEAL BEFORE THE CIT (A). THE CIT (A) TOOK NOTE OF THE ASSESSEES CONTENTION THAT THE AMOUNT WAS PAID BY THE ASSESSEE IN RESPECT OF PROPORTIONATE PROPERT Y TAX AMOUNTING TO RS.69 40 217 TO HDFC LIMITED AND THAT SINCE IT TAK ES TIME TO CONVEY THE ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 8 PROPERTY FROM THE SELLERS NAME TO THE BUYER NAME THE CERTIFICATE WAS IN THE NAME OF HDFC LIMITED. THE CIT (A) TOOK NOTE OF TH E FACT THAT THE BANK STATEMENT EVIDENCING THE PAYMENT WAS DULY FILED BY THE ASSESSEE BUT IT WAS REJECTED BY THE AO ON THE GROUND THAT THE STATEMENT DOES NOT REFLECT THE NAME OF THE BENEFICIARY. THE CIT (A) UPHELD THE CONTEN TIONS OF THE ASSESSEE. HE NOTED THAT THERE IS NO DISPUTE THAT PAYMENT HAS BEE N MADE BY THE ASSESSEE AND THAT EVEN IF THAT THE RECEIPT IS IN THE NAME OF HDFC LIMITED BEING ERSTWHILE OWNER THE CLAIM SHOULD NOT BE DISALLOWED SINCE IN THE PROPERTY TRANSACTION IT TAKES SOME TIME FOR CONVEYANCE EFFEC TING NECESSARY ENTRIES IN RESPECT OF CHANGE IN OWNERSHIP IN THE MUNICIPAL REC ORDS. THE DISALLOWANCE WAS THUS DELETED. AGGRIEVED BY THE STAND SO TAKEN BY THE CIT (A) THE ASSESSING OFFICER IS IN APPEAL BEFORE US. 11. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED TH E MATERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS A LSO THE APPLICABLE LEGAL POSITION. 12 WE FIND THAT THERE IS NO DISPUTE ABOUT THE FACT THAT THE ASSESSEE HAD BECOME OWNER OF THE PROPERTY ON 29.6.2005 AND TH AT THE ASSESSEE PAID PROPORTIONATE MUNICIPAL TAXES IN RESPECT OF THE PER IOD FOR WHICH HE WAS OWNER TO HDFC LIMITED. THE MERE FACT THAT THE RECO RD SHOWS THE NAME OF HDFC LIMITED CANNOT BE A GROUND OF DISALLOWANCE FOR MUNICIPAL TAXES BECAUSE THE CIT (A) HAS RIGHTLY NOTED IT IS NOT INSEISIN AFTER THAT ENTRY REGARDING CHANGE IN OWNERSHIP IN THE MUNICIPAL RECO RDS BECAUSE IT TAKES SOME TIME AND THAT UNLESS SUCH ENTRIES ARE EFFECTED THE RECEIPTS ARE ISSUED IN THE NAME OF THE PERSON WHO IS OWNER AS PER MUNICIPA L RECORDS. ON THE FACTS OF THE PRESENT CASE THERE IS REASONABLE EXPLANATIO N FOR THE RECEIPTS NOT BEING IN THE NAME OF THE ASSESSEE AND THE PAYMENT MADE BY THE ASSESSEE IS NOT DISPUTED EITHER. ON CONSIDERATION OF THESE FACTS A S ALSO ENTIRETY OF THE CASE WE UPHOLD THE ORDER OF THE CIT (A) AND DECLINE TO I NTERFERE IN THE MATTER. ITA NO.: 2056/MUM/10 GRANDEUR PROPERTIES PVT LTD. 9 13. GROUND NO.4 IS THUS DISMISSED. 14. IN THE RESULT APPEAL FILED BY THE REVENUE IS D ISMISSED. PRONOUNCED IN THE OPEN COURT ON 28 TH JANUARY 20-10 SD/- SD/- (V.DURGA RAO ) (PRAMOD KUMA R) JUDICIAL MEMBER ACCOUNTA NT MEMBER MUMBAI; 28 TH _ DAY OF JANUARY 2011 . COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER -9 MUMBAI 4. COMMISSIONER (APPEALS)-19 MUMBAI 5. DEPARTMENTAL REPRESENTATIVE G BENCH MUMBAI 6. GUARD FILE TRUE COPY BY O RDER ETC. ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI