BADA SAAB PROPERTIES P.LTD, MUMBAI v. DCIT RG 9(1), MUMBAI

ITA 3448/MUM/2010 | 2006-2007
Pronouncement Date: 15-07-2011 | Result: Dismissed

Appeal Details

RSA Number 344819914 RSA 2010
Assessee PAN AAACB1642A
Bench Mumbai
Appeal Number ITA 3448/MUM/2010
Duration Of Justice 1 year(s) 2 month(s) 15 day(s)
Appellant BADA SAAB PROPERTIES P.LTD, MUMBAI
Respondent DCIT RG 9(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 15-07-2011
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 15-07-2011
Date Of Final Hearing 13-07-2011
Next Hearing Date 13-07-2011
Assessment Year 2006-2007
Appeal Filed On 30-04-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B MUMBAI BEFORE SHRI R.S. SYAL (AM) & SHRI V. DURGA RAO (JM ) I.T.A.NO. 3627/MUM/2010 (A.Y. 2006-07) DY.COMMR. OF INCOME-TAX RANGE 9(1) R.NO.233 AAYKAR BHAVAN M.K. ROAD MUMBAI-400 020. VS. BADA SAAB PROPERTIES PVT.LTD. COOL INN APARTMENT WATERFIELD ROAD BANDRA (W) MUMBAI-400 050. PAN: AAACB1642A APPELLANT RESPONDENT I.T.A.NO. 3448/MUM/2010 (A.Y. 2006-07) BADA SAAB PROPERTIES PVT.LTD. COOL INN APARTMENT WATERFIELD ROAD BANDRA (W) MUMBAI-400 050. PAN: AAACB1642A VS. DY.COMMR. OF INCOME-TAX RANGE 9(1) R.NO.233 AAYKAR BHAVAN M.K. ROAD MUMBAI-400 020. APPELLANT RESPONDENT DEPARTMENT BY SHRI R.K. GUPTA. ASSESSEE BY SHRI V. C. SHAH. O R D E R PER R.S. SYAL AM : THESE TWO CROSS APPEALS ONE BY THE ASSESSEE AND THE OTHER BY THE DEPARTMENT ARE DIRECTED AGAINST THE ORDER DATED 2 2-02-2010 PASSED BY THE CIT(A) IN RELATION TO THE ASSTT. YEAR 2006-07. 2. THE LD. A.R. DID NOT PRESS THE APPEAL FILED BY T HE ASSESSEE. THIS APPEAL IS THEREFORE DISMISSED AS NOT PRESSED. ITA NOS.3627 & 3448/M./2010 BADA SAAB PROPERTIES P.LTD.. 2 3. THE FIRST GROUND OF THE REVENUES APPEAL IS AGAI NST RE-COMPUTATION OF ANNUAL LETTING VALUE IN RESPECT OF CRYSTAL BUILDING . 4. BRIEFLY STATED FACTS OF THIS GROUND ARE THAT THE ASSESSEE SHOWED INCOME FROM HOUSE PROPERTY AT RS.40 03 576/-. NO DETAILS W ERE FURNISHED EITHER WITH THE RETURN OF INCOME OR SUBSEQUENTLY WITH REGARD TO GRO SS RENT RECEIVED/RECEIVABLE ETC. EVENTUALLY THE ASSESSMENT WAS COMPLETED U/S.1 44. THE AO NOTED THAT ONE OF THE PROPERTIES I.E. BASEMENT OF CRYSTAL BUILDIN G WAS LET OUT TO M/S.AURA ENTERTAINMENT PVT. LTD. FROM WHICH RENT WAS DECLAR ED FOR 7 MONTHS I.E. SEPTEMBER 2005 TO MARCH 2006 @ RS.9 LAKHS P.M. TO TALING RS.63 LAKHS. THE AO NOTED THAT RENT FOR THE PERIOD APRIL 2005 TO AUGUST 2005 WAS REQUIRED TO BE CONSIDERED IN DETERMINING THE ANNUAL LETTING VALUE OF THE PROPERTY. BY ADOPTING THE SAME RATE OF RS.9 LAKHS PER MONTH HE ADDED A S UM OF RS.45 LAKHS IN RESPECT OF BASEMENT PROPERTY FOR COMPUTING ANNUAL LETTING V ALUE. THUS THE GROSS RENT FROM THE BASEMENT PROPERTY WAS TAKEN AT RS.1 08 00 000/-. THE LD. CIT(A) AFTER APPRECIATING THE FACTS NARRATED BY THE ASSESSEE HE LD THAT THE SAID SUM OF RS.45 LAKHS ADDED BY THE AO COULD NOT BE INCLUDED IN THE GROSS RENT WHILE DETERMINING THE ANNUAL LETTING VALUE OF THE PROPERTY. 5. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS NOTICED THAT THE LD. CIT(A) CALLED FOR REMAND REPORT FROM THE AO ON THE ISSUES RAISED IN APPEAL BEFORE HIM. AS REGAR DS THIS ISSUE THE RELEVANT PART OF THE REMAND REPORT HAS BEEN REPRODUCED ON PAGES 4 & 5 OF THE IMPUGNED ORDER. IT IS OBSERVED THAT THE ASSESSEE CONTENDED B EFORE THE AO IN THE REMAND PROCEEDINGS THAT THE AGREEMENT FOR GIVING THIS PROP ERTY ON RENT WAS EXECUTED ON 08-06-2005 AND THE ASSESSEE STARTED RECEIVING RENT FROM THE MONTH OF ITA NOS.3627 & 3448/M./2010 BADA SAAB PROPERTIES P.LTD.. 3 SEPTEMBER 2005 FOR THE REASON THAT A PERIOD OF AROU ND 2 MONTHS WAS GIVEN TO THE TENANT FOR MAKING IT FIT FOR ITS USE WITHOUT AN Y RENT. COPY OF THE AGREEMENT WAS ALSO PRODUCED. IT IS OBVIOUS THAT THE ASSESSEE PROVIDED AROUND TWO MONTHS FREE PERIOD TO THE OCCUPANT FOR MAKING IT SUITABLE FOR ITS REQUIREMENT. NO RENTAL INCOME CAN BE SAID TO HAVE ACCRUED TO THE ASSESSEE INASMUCH AS THERE WAS NEITHER ANY RIGHT TO RECEIVE RENT FOR THE SAID PERI OD NOR IT WAS ACTUALLY RECEIVED. THIS CONTENTION PUT FORTH BY THE ASSESSEE BEFORE TH E AO DURING THE REMAND PROCEEDINGS HAS NOT BEEN CONTROVERTED BY THE AO IN ANY MANNER. WE THEREFORE UPHOLD THE IMPUGNED ORDER ON THIS GROUND AND HOLD T HAT A SUM OF RS.45 LAKHS WAS NOT LIABLE TO BE INCLUDED IN THE GROSS RENT FOR THE PURPOSE OF DETERMINING THE ANNUAL LETTING VALUE. 6. THE SECOND PART OF THIS GROUND IS AGAINST THE DE LETION OF INCOME IN RESPECT OF OTHER PROPERTIES CHARGED BY THE AO UNDER THE HEA D INCOME FROM HOUSE PROPERTY. THE AO NOTED THAT THE OTHER PART OF THE CRYSTAL BUILDING WAS SHOWN BY THE ASSESSEE IN ITS BALANCE-SHEET IN THE EARLIER YE AR AND PART OF THE SAME WAS SOLD IN THE PRECEDING YEAR. IN THE ABSENCE OF ANY D ETAILS HE ESTIMATED RENT OF RS.5 LAKHS PER MONTH FOR 12 MONTHS AND INCLUDED A S UM OF RS.60 LAKHS IN THE COMPUTATION OF INCOME FROM HOUSE PROPERTY. THE LD . CIT(A) AFTER HEARING THE ASSESSEE ORDERED FOR DELETION OF INCLUSION OF RS.6 0 LAKHS FROM THE GROSS RENT. 7. HAVING HEARD BOTH THE SIDES AND PERUSED THE RELE VANT MATERIAL ON RECORD IT IS SEEN THAT THE AO ESTIMATED RENTAL INCOME AT R S.60 LAKHS ON THE PRESUMPTION THAT THE OTHER PARTS OF CRYSTAL BUILDING WERE LET O UT. THE ASSESSEE CONTENDED THAT SUCH OTHER PARTS WERE ALREADY SOLD IN THE EARLIER Y EAR AND AS SUCH THERE WAS NO QUESTION OF CONSIDERING RENTAL INCOME ON HYPOTHETIC AL BASIS. NO COMMENTS HAVE ITA NOS.3627 & 3448/M./2010 BADA SAAB PROPERTIES P.LTD.. 4 BEEN GIVEN BY THE AO IN THE REMAND REPORT ON THIS I SSUE. IT IS OBSERVED FROM PAGE 3 PARA 4 OF THE ASSESSMENT ORDER THAT THE AO H IMSELF RECOGNIZED THE FACT THAT PART OF CRYSTAL BUILDING WAS SOLD ON 14-05-200 4 RELEVANT TO THE ASSTT. YEAR 2005-05. IN THE PREVAILING CIRCUMSTANCES IT BECOME S EVIDENT THAT WHEN THE VERY PROPERTY WAS SOLD BY THE ASSESSEE IN AN EARLIER YEA R THERE CANNOT BE ANY QUESTION OF ESTIMATING RENTAL INCOME AND INCLUDING THE SAME IN THE COMPUTATION OF ANNUAL LETTING VALUE. WE THEREFORE UPHOLD THE IMPUGNED ORDER ON THIS ISSUE. THIS GROUND IS NOT ALLOWED. 8. THE ONLY OTHER GROUND WHICH SURVIVES FOR OUR CON SIDERATION IS AGAINST THE DELETION OF INTEREST INCOME OF RS.50 LAKHS. THE FAC TS APROPOS THIS GROUND ARE THAT THE ASSESSEE SHOWED NIL INCOME UNDER THE HEAD INCO ME FROM OTHER SOURCES. THE AO OBSERVED THAT IN THE PRECEDING YEAR INTEREST INCOME WAS SHOWN AT RS.39.69 LAKHS. IT WAS ALSO NOTICED THAT THE ASSES SEE HAD SHOWN INVESTMENTS AT RS.2.84 CRORES IN THIS YEAR AS COMPARED TO RS.2.47 CRORES IN THE PRECEDING YEAR. AS NO INTEREST INCOME WAS DECLARED THE AO WHILE F INALIZING THE ASSESSMENT U/S.144 ESTIMATED THE INTEREST INCOME AT RS.50 LAK HS AND INCLUDED IT IN THE TOTAL INCOME OF THE ASSESSEE. THE LD. CIT(A) AFTER CONSI DERING THE REMAND REPORT ON THIS ISSUE ORDERED FOR THE DELETION OF ADDITION. 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD IT IS SEEN THAT THE ASSESSEE SUBMITTED B EFORE THE AO DURING THE REMAND PROCEEDINGS THAT NO INTEREST INCOME WAS ACTU ALLY EARNED IN THIS YEAR. THIS CONTENTION HAS NOT BEEN PROVED BY THE AO TO BE INCORRECT WITH ANY MATERIAL/EVIDENCE. IT IS AXIOMATIC THAT ONUS TO PRO VE THAT A PARTICULAR INCOME NOT INCLUDED IN THE TOTAL INCOME WAS EARNED BY THE AS SESSEE IS ALWAYS ON THE ITA NOS.3627 & 3448/M./2010 BADA SAAB PROPERTIES P.LTD.. 5 REVENUE. THE ASSESSEE CANNOT BE CALLED UPON TO PROV E NEGATIVE. THIS ADDITION OF RS.50 LAKHS MADE BY THE AO IS AN AD HOC ADDITION WI THOUT FIRSTLY SHOWING THAT THE ASSESSEE IN FACT EARNED ANY INTEREST INCOME. WE THEREFORE APPROVE THE VIEW TAKEN BY THE LD. CIT(A) IN DELETING THE ADDITION. 10. IN THE RESULT BOTH THE APPEALS STAND DISMISSED . ORDER PRONOUNCED ON THE 15TH DAY OF JULY 20 11. SD/- SD/- (V. DURGA RAO) (R.S. SYAL) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI: 15TH JULY 2011. NG: COPY TO : 1. DEPARTMENT. 2.ASSESSEE. 3 CIT(A)-19 MUMBAI. 4 CIT-9 MUMBAI. 5.DR B BENCH MUMBAI. 6.MASTER FILE. (TRUE COPY) BY ORDER ASST.REGISTRAR ITAT MUMBAI. ITA NOS.3627 & 3448/M./2010 BADA SAAB PROPERTIES P.LTD.. 6 DETAILS DATE INITIALS DESIGN ATION 1. DRAFT DICTATED ON 13-07-11 SR.PS/ 2. DRAFT PLACED BEFORE AUTHOR 13-07-11 SR.PS/ 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/ 6. KEPT FOR PRONOUNCEMENT ON SR.PS/ 7. FILE SENT TO THE BENCH CLERK SR.PS/ 8. DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9. DATE ON WHICH FILE GOES TO THE AR 10. DATE OF DISPATCH OF ORDER *