ITO-20(3)(3), MUMBAI v. SHRI. SRIKRUSHNA PATNAIK, MUMBAI

ITA 5836/MUM/2008 | 2005-2006
Pronouncement Date: 30-11-2011 | Result: Dismissed

Appeal Details

RSA Number 583619914 RSA 2008
Assessee PAN AIMPB4570C
Bench Mumbai
Appeal Number ITA 5836/MUM/2008
Duration Of Justice 3 year(s) 2 month(s) 10 day(s)
Appellant ITO-20(3)(3), MUMBAI
Respondent SHRI. SRIKRUSHNA PATNAIK, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 30-11-2011
Appeal Filed By Department
Order Result Dismissed
Bench Allotted E
Tribunal Order Date 30-11-2011
Date Of Final Hearing 08-02-2011
Next Hearing Date 08-02-2011
Assessment Year 2005-2006
Appeal Filed On 19-09-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH: MUMBAI BEFORE SHRI G.E. VEERBHADRAPPA PRESIDENT AND SHRI R.S. PADVEKAR JUDICIAL MEMBER ITA NO.5819/MUM/2008 (ASSESSMENT YEAR: 2004-05) KRISHNA BHOJWANI SAMIR COMPLEX FIRST FLOOR ST. ANDREWS ROAD BANDRA (W) MUMBAI -400 050 ....... APPELLANT VS INCOME TAX OFFICER CIRCLE -19(3)(4) MUMBAI ..... RESPONDENT PAN: AIMPB 4570 C APPELLANT BY: SHRI YOGESH THAR RESPONDENT BY: SHRI P.K.B. MENON ITA NO.5386/MUM/2008 (ASSESSMENT YEAR: 2004-05) ASSISTANT COMMISSIONER OF TAX CIRCLE -19(3) ROOM NO.305 3 RD FLOOR PIRAMAL CHAMBERS PAREL MUMBAI -400 012 ....... APPELLANT VS KRISHNA BHOJWANI SAMIR COMPLEX FIRST FLOOR ST. ANDREWS ROAD BANDRA (W) MUMBAI -400 050 ..... RESPONDENT PAN: AIMPB 4570 C APPELLANT BY: SHRI P.K.B. MENON RESPONDENT BY: SHRI YOGESH THAR DATE OF HEARING: 21.11.2011 DATE OF PRONOUNCEMENT: 21.11.2011 O R D E R PER R.S. PADVEKAR JM ITA 5819/MUM/2008 ITA 5386/MUM/2008 KRISHNA BHOJWANI 2 THESE CROSS APPEALS ONE BY THE ASSESSEE AND ANOTHE R BY THE REVENUE ARE FILED FOR THE A.Y. 2004-05 CHALLENGING THE IMPUGNED ORDER OF THE LD. CIT (A)-19 MUMBAI DATED 19.6.2008. WE FIRST TAKE ASSESSEES APPEAL BEING ITA 5819/M/2008. 2. THE FIRST ISSUE IS WHETHER THE LD. CIT (A) HAS E RRED IN HOLDING THAT THE LICENSE FEE IN RESPECT OF COMPOSITE LETTIN G ACTIVITY CARRIED ON BY THE ASSESSEE ARE CHARGEABLE TO TAX UNDER THE HEA D INCOME FROM HOUSE PROPERTY. 3. WE HAVE HEARD THE PARTIES. THE LD. COUNSEL SUBM ITS THAT SO FAR AS THE ISSUE ARISING FROM GROUND NOS. 1 TO 3 ARE CO NCERNED THE SAME IS COVERED AGAINST THE ASSESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.YS. 2003-04 2005-06 & 2006-07. THE LD. COUNSEL FILED THE TRIBUNAL ORDER WHICH IS PLACE D ON RECORD. WE FIND THAT THIS ISSUE STANDS COVERED AGAINST THE ASS ESSEE BY THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE A.YS. 2002-03 2003-04 2005-06 AND 2006-07. THE TRIBUNAL HAS FOL LOWED THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE O F M/S. SHAMBHU INVESTMENT 263 ITR 143 AND HAS HELD THAT LICENSE FE E IS TO BE TAXED AS INCOME FROM HOUSE PROPERTY. WE THEREFORE FOLLOWI NG THE ORDER OF THE TRIBUNAL ON THIS ISSUE AND AS FAIRLY CONCEDED BY TH E LD. COUNSEL HOLD THAT THE LICENSE FEE FROM LETTING OUT ACTIVITY IS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND NOT INCOME FR OM BUSINESS. ACCORDINGLY GROUND NO.1 TO 3 ARE DISMISSED. 4. THE LD. COUNSEL SUBMITS THAT GROUND NO.4 I.E. LE VY THE INTEREST U/S.234B & 234C IS CONSEQUENTIAL. GROUND NO.4 IS C ONSEQUENTIAL AND THEREFORE NO ADJUDICATION IS REQUIRED. 5. GROUND NO.5 & 6 ARE GENERAL IN NATURE. HENCE NO ADJUDICATION IS REQUIRED. 6. NOW WE TAKE-UP REVENUES APPEAL BEING ITA 5386 OF 2008. ITA 5819/MUM/2008 ITA 5386/MUM/2008 KRISHNA BHOJWANI 3 7. THE REVENUE HAS RAISED GRIEVANCE AGAINST THE FIN DINGS OF THE LD. CIT (A) THAT WHILE COMPUTING THE ANNUAL LETTING VAL UE (ALV) NOTIONAL INTEREST ON THE INTEREST FREE DEPOSITS CANNOT BE AD DED. 8. WE HAVE HEARD THE PARTIES. WE FIND THAT THE IDE NTICAL ISSUE HAS BEEN CONSIDERED BY THE TRIBUNAL IN THE ASSESSEES O WN CASE FOR A.YS. 2003-04 2005-06 & 2006-07 BEING ITA NOS.109-110/M/ 2010 & 1072/M/2007 ORDER DATED 30 TH MARCH 2011 DISMISSING THE GROUND TAKEN BY THE REVENUE IN THOSE YEARS THE TRIBUNAL H AS HELD AS UNDER:- 10. LEARNED CIT (A) HAS FOLLOWED THE JUDGMENT OF HONBLE JURISDICTIONAL HIGH COURT IN THE CASE OF J.K. INVES TORS (BOMBAY) LTD.. 112 TAXMAN 107 AND HELD THAT NOTIONAL INTERE ST CANNOT BE ADDED TO ANNUAL RENT RECEIPT. 11. LEARNED DR RELIED ON THE DECISION OF THE THIRD MEMBER IN THE CASE OF ITO VS. BAKER TECHNICAL SERVICES (P) LT D. 125 ITD 1 (TM). D BENCH OF THE TRIBUNAL IN ITA NO.1411/MUM/ 2007 IN THE CASE OF DCIT 10(1) VS. RECLAMATION REALTY INDIA PVT. LTD. AFTER CONSIDERING THE THIRD MEMBER DECISION RELIED UPON BY LEARNED DR HELD AS FOLLOWS:- 25. FOR THE REASONS GIVEN ABOVE WE HOLD THAT THE ANNUAL VALUE (ALSO REFERRED TO AS MUNICIPAL VALUATION / RA TEABLE VALUE) ADOPTED BY THE MUNICIPAL AUTHORITIES IN RESP ECT OF THE PROPERTY OF RS.27 50 835 SHOULD BE THE DETERMIN ING FACTOR FOR APPLYING THE PROVISIONS OF SEC.23(1)(A) OF THE ACT. SINCE THE RENT RECEIVED BY THE ASSESSEE WAS MORE TH AN THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPE CTED TO LET FROM YEAR TO YEAR THE ACTUAL RENT RECEIVED SHOULD E THE ANNUAL VALUE OF THE PROPERTY U/S.23(1)(B) OF TH E ACT. NOTIONAL INTEREST ON INTEREST FREE SECURITY DEPOSIT / RENT RECEIVED IN ADVANCE SHOULD NOT BE ADDED TO THE SAME IN VIEW OF THE DECISION OF THE HONBLE BOMBAY HIGH COU RT IN THE CASE OF J.V. INVESTORS (BOMBAY) LTD. (SUPRA). WE HOLD ACCORDINGLY. THE APPEAL OF THE REVENUE IS DISMISSE D. ITA 5819/MUM/2008 ITA 5386/MUM/2008 KRISHNA BHOJWANI 4 12. RESPECTFULLY FOLLOWING THE SAME WE UPHOLD THE ORDER OF THE FIRST APPELLATE AUTHORITY AND DISMISS GROUND NO.1&2 OF THE REVENUE. 9. NOW THIS ISSUE ALSO STANDS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE HONBLE HIGH COURT OF DELHI (FU LL BENCH) IN THE CASE OF CIT VS. MONIKUMAR SUBBA 333 ITR 38 (DEL) (F B). WE FIND NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT ( A). 10. IN THE RESULT BOTH THE APPEALS ASSESSEES AS WELL AS REVENUES ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT SOON AFTER CONCL USION OF THE HEARING ON 21 ST NOVEMBER 2011. SD/- SD/- ( G.E. VEERBHADRAPPA ) PRESIDENT ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI DATE : 21 ST NOVEMBER 2011 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A) -XIX MUMBAI. 4) THE CIT-X MUMBAI. 5) THE D.R. A BENCH MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T. MUMBAI *CHAVAN ITA 5819/MUM/2008 ITA 5386/MUM/2008 KRISHNA BHOJWANI 5 SR.N. EPISODE OF AN ORDER DATE INITIALS CONCERNED 1 DRAFT DICTATED ON 24.11.2011 SR.PS 2 DRAFT PLACED BEFORE AUTHOR 25.11.2011 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/PS 6 KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7 FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER