JT CIT RG 23(1), MUMBAI v. MACHINERY & SPARES, MUMBAI

ITA 5689/MUM/2012 | 2009-2010
Pronouncement Date: 28-04-2015 | Result: Dismissed

Appeal Details

RSA Number 568919914 RSA 2012
Assessee PAN AAAFM1528K
Bench Mumbai
Appeal Number ITA 5689/MUM/2012
Duration Of Justice 2 year(s) 7 month(s) 18 day(s)
Appellant JT CIT RG 23(1), MUMBAI
Respondent MACHINERY & SPARES, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 28-04-2015
Appeal Filed By Department
Order Result Dismissed
Bench Allotted B
Tribunal Order Date 28-04-2015
Date Of Final Hearing 28-04-2015
Next Hearing Date 28-04-2015
Assessment Year 2009-2010
Appeal Filed On 10-09-2012
Judgment Text
B IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH MUMBAI BEFORE SHRI G.S. PANNU ACCOUNTANT MEMBER AND SHRI AMIT SHUKLA JUDICIAL MEMBER ./ I.T.A. NO.5689 /MUM/2012 ( / ASSESSMENT YEAR : 2009-2010 ACIT 23(1 R. NO. 108 C-10 IST FLOOR B.K.C. BANDRA (E) MUMBAI -51. / VS. M/S MACHINERY & SPARES 201 202 KARMA STAMBH OPP. MTNL OFFICE VIKHROLI (W) MUMBAI 400 078. ./ PAN : AAAFM1528K ( / APPELLANT ) .. ( / RESPONDENT ) A PPELLANT BY SMT NEELAM NADKARNI R E SPONDENT BY : SHRI SUNIL JUMAVO / DATE OF HEARING : 28-04-2015 / DATE OF PRONOUNCEMENT : 28-04-2015 [ !' / O R D E R PER G.S. PANNU A.M . : THIS APPEAL FILED BY THE REVENUE IS DIRECTED AGAINS T THE ORDER PASSED BY THE LD. CIT(A) - 33 MUMBAI DATED 13-06-2012 FOR TH E A.Y. 2009-10 IN THE MATTER OF AN ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE INCOME TAX ACT 1961 DATED 14-12-2011. 2. IN THIS APPEAL ALTHOUGH THE REVENUE HAS RAISED TWO GROUNDS OF APPEAL BUT ESSENTIALLY THE DISPUTE IS WITH REGARD TO ASSES SMENT OF RS. 97.50 LAKHS RECEIVED BY THE ASSESSEE FROM ICICI BANK. NOTABLY THE ASSESSEE DECLARED THE SAID AMOUNT AS AN INCOME ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE ITA 5689/M/12 2 PROPERTY AGAINST WHICH THE A.O. TREATED THE SAME A S AN INCOME ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. 3. THE ASSESSEE BEFORE US IS A PARTNERSHIP FIRM ENG AGED IN THE BUSINESS OF TRADING OF WORKSHOP MACHINERY ACCESSORIES ETC. IT TRANSPIRES THAT THE ASSESSEE WAS OCCUPYING OFFICE PREMISES AT FORT MUM BAI WHICH IT SUBLEASED TO ICICI BANK. THE QUESTION AROSE AS TO WHETHER THE IN COME FROM SUBLETTING WAS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPER TY OR INCOME FROM OTHER SOURCES. IN THE INSTANT ASSESSMENT YEAR THE A.O. FOLLOWING THE DECISION IN EARLIER ASSESSMENT YEARS STARTING FROM ASSESSMENT YEAR 2005-06 TOOK THE STAND THAT SINCE THE ASSESSEE WAS NOT OWNE R OF THE PROPERTY THE INCOME FROM SUB-LETTING WAS TO BE ASSESSED UNDER TH E HEAD INCOME FROM OTHER SOURCES. CONSEQUENTLY THE DEDUCTION CLAIMED BY THE ASSESSEE UNDER SECTION 24 WAS DISALLOWED. THE LD. CIT(A) HAS DIFFE RED WITH THE A.O. AND INSTEAD UPHELD THE PLEA OF THE ASSESSEE THAT THE IM PUGNED RENTAL INCOME WAS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPER TY. 4. AT THE TIME OF HEARING IT WAS A COMMON GROUND B ETWEEN THE PARTIES THAT IN A.Y. 2005-06 THE ISSUE CAME UP BEFORE THE T RIBUNAL AND VIDE ITA NO. 3008/MUM/2008 DATED 09-10-2009 THE ISSUE WAS DECIDE D IN FAVOUR OF THE ASSESSEE. THE FOLLOWING DISCUSSION IN THE ORDER DAT ED 09-10-2009 (SUPRA) OF THE TRIBUNAL IS RELEVANT:- WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. WE FIND THAT THE ASSESSEE IS IN POSSESSION OF THE PREMISES FOR THE LAST 40 YEARS . THE PREMISES WERE WITH M/S BHARAT IMPORT AND EXPORTS AS TENANT AND TH IS FIRM WAS DISSOLVED VIDE DISSOLUTION OF THE PARTNERSHIP MADE ON 3-4-1958. THEREAFTER THE TENANCY RIGHT IN THE PREMISES WERE R ECEIVED BY THE ASSESSEE. THE OWNERS OF THE PROPERTY M/S. VRINDAVAN LAL GOVERDHAN LAL HAVE ALLOWED THE ASSESSEE FIRM TO CREATE SUB-TENANC Y WITH THE REGARD TO THE PREMISES AND HAS GIVEN THEIR PREMISES FOR CREAT ING THE SUB-TENANCY IN FAVOUR OF ICICI BANK LTD. FOR A PERIOD OF 15 YEARS ON CERTAIN TERMS AND CONDITIONS AS DETAILED IN THEIR LETTER DATED 24/11/ 2000 ADDRESSED TO THE ASSESSEE COPY THEREOF FILED IN THE COMPILATION BEF ORE US. IN THESE FACTS OF THE CASE WE FIND THAT THE ASSESSEE BECOME A DEEMED OWNER IN ACCORDANCE WITH PROVISION OF SECTION 27(IIIB) R.W.S . 269UA(F)(I) OF THE ACT. ITA 5689/M/12 3 THERE IS NO MATERIAL ON RECORD TO SUGGEST THAT THE LETTER DATED 24/11/2000 OF M/S. VRINDAVAN LAL GOVERDHAN LAL IS N OT GENUINE. THE FACT THAT THE AGREEMENT FOR LETTING OUT THE PREMISE S TO ICICI BANK LTD. IS FOR A PERIOD OF 15 YEARS CLINCHES THE ISSUE IN FAV OUR OF THE ASSESSEE AS THEY BECOME THE DEEMED OWNER UNDER THE PROVISION OF SECTION 27(IIIB) R.W.S. 269 UA (F)(I) OF THE ACT AND ACCORDINGLY IS ENTITLED TO DEDUCTION AS PROVIDED U/S 24(A) OF THE ACT. THE DECISION OF THE MUMBAI TRIBUNAL IN 8 SOT 441 AND CALCUTTA TRIBUNAL IN 89 ITD 199 COVERS THE ISSUE IN THIS CASE IN FAVOUR OF THE ASSESSEE AND ACCORDINGLY WE H OLD THAT THERE IS NO MISTAKE IN THE ORDER OF CIT(A) IN HOLDING THAT THE ASSESSEE IS THE DEEMED OWNER OF THE PREMISES U/S 27(IIIB) OF THE ACT AND T HE ORDER OF THE CIT(A) IS CONFIRMED AND THE GROUNDS OF APPEAL OF THE REVENUE ARE DISMISSED. 5. SIMILARLY IN ASSESSMENT YEARS 2006-07 2007-08 A ND 2008-09 THE TRIBUNAL VIDE ITS ORDER IN ITA NO. 5419/MUM/2009 I TA NO. 4584/MUM/2010 AND ITA NO. 6186/MUM/2011 DATED 29-12 -2010 29-7- 2011 & 09-01-2014 RESPECTIVELY FOLLOWED THE EARLIER PRECEDENT IN ASSESSEES OWN CASE FOR A.Y. 2005-06 (SUPRA) AND DECIDED THE I SSUE IN FAVOUR OF THE ASSESSEE. 6. IN VIEW OF THE AFORESAID PRECEDENTS WE AFFIRM T HE IMPUGNED DECISION OF THE LD. CIT(A) IN HOLDING THAT THE INCOME DERIVED B Y THE ASSESSEE FROM SUB- LETTING HAS TO BE ASSESSED UNDER THE HEAD INCOME F ROM HOUSE PROPERTY. AS A CONSEQUENCE APPEAL OF THE REVENUE IS DISMISSED. 7. THE ABOVE DECISION WAS PRONOUNCED IN THE OPEN CO URT IN THE PRESENCE OF BOTH THE PARTIES AT THE CONCLUSION OF THE HEARIN G ON 28-04-2015. SD/- SD/- (AMIT SHUKLA) (G.S. PANNU) JUDICIAL MEMBER ACCOUNTANT MEMBER . / MUMBAI ; 0! DATED 28-4-2015 .8../ RK RKRK RK SR. PS ITA 5689/M/12 4 ! '#$% &%# / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. 9 () / THE CIT(A) 33 MUMBAI 4. 9 / CIT - 23 MUMBAI 5. <=> 88?@ ?@ . / / DR ITAT MUMBAI B BENCH 6. >BC D / GUARD FILE. ' / BY ORDER < 8 //TRUE COPY// (/') * ( DY./ASSTT. REGISTRAR) . / / ITAT MUMBAI