RAMGOPAL GANPATRAI & SONS P. LTD, MUMBAI v. ACIT (OSD-I) CIR-7, MUMBAI

ITA 696/MUM/2009 | 2005-2006
Pronouncement Date: 26-03-2010 | Result: Allowed

Appeal Details

RSA Number 69619914 RSA 2009
Assessee PAN AAACR7642G
Bench Mumbai
Appeal Number ITA 696/MUM/2009
Duration Of Justice 1 year(s) 1 month(s) 23 day(s)
Appellant RAMGOPAL GANPATRAI & SONS P. LTD, MUMBAI
Respondent ACIT (OSD-I) CIR-7, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 26-03-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted D
Tribunal Order Date 26-03-2010
Date Of Final Hearing 12-03-2010
Next Hearing Date 12-03-2010
Assessment Year 2005-2006
Appeal Filed On 03-02-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL 'D' BENCH MUMBAI BEFORE SHRI R.K. GUPTA JUDICIAL MEMBER AND SHRI B. RAMAKOTAIAH ACCOUNTANT MEMBER ITA NO. 696/MUM/2009 (ASSESSMENT YEAR: 2005-06) M/S. RAMGOPAL GANPATRAI & SONS ACIT (OSD-1) CENTRA L 7 PVT. LTD. LAXMINARAYAN MANDIR MUMBAI CHAWL VILE PARLE MUMBAI VS. PAN - AAACR 7642 G APPELLANT RESPONDENT ITA NO. 697/MUM/2009 (ASSESSMENT YEAR: 2005-06) M/S. RAMRIKHDAS BALKISON & SONS ACIT (OSD-1) CENTR AL 7 PVT. LTD. LAXMINARAYAN MANDIR MUMBAI CHAWL VILE PARLE MUMBAI VS. PAN - AAACR 7612 N APPELLANT RESPONDENT APPELLANT BY: SHRI VIJAY C. KOTHARI RESPONDENT BY: SMT. CHANDRA RAMKRISHNAN O R D E R PER B. RAMAKOTAIAH A.M. BOTH THESE APPEALS ARE AGAINST THE ORDERS OF THE CI T(A) CENTRAL-V MUMBAI DATED 21.11.2008 FROM THE SAME GROUP HAVING COMMON ISSUES. FOR THE SAKE OF CLARITY THE GROUNDS IN ITA NO. 696/MUM/ 2009 IS EXTRACTED AS UNDER: - 1. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE ADDITION OF RS.49 36 320/- AS ANNUAL LETTING VALUE UNDER HOUSE PROPERTY INCOME. 2. THE LEARNED CIT(A) HAS ERRED IN CONFIRMING THE D ISALLOWANCE OF ESTABLISHMENT AND STATUTORY EXPENSES OF RS.15 399/- . SIMILAR ISSUE IS ALSO INVOLVED IN ITA NO. 697/MUM/2 009 WHERE THE ANNUAL LETTING VALUE IN GROUND NO. 1 IS RS.24 20 160/- AND ESTABLISHMENT AND STATUTORY EXPENSES IS RS.18 542/-. ITA NO. 696 & 697/MUM/2009 M/S. RAMGOPAL GANPATRAI & SONS 2 2. BRIEFLY STATED THE COMPANY RAMRIKHADAS BALKISON & SONS P. LTD. IN ITA NO. 697/MUM/2009 HAVING PROPERTY AT 6A SAMUDR A GAURV APARTMENT WORLI AND THIS WAS LET OUT TO MR. T.B. RUIA WHICH H AVE BEEN VESTED WITH MRS. ASHA RUIA WIFE OF MR. T.B. RUIA AND THE ASSESSEE A LSO ENTERED INTO A SEPARATE AGREEMENT OF LEASE DATED 14.08.2000. THE O RIGINAL LEASE WAS SUBSISTING FROM 1987 AND THE PROPERTY IS A TENANTED PROPERTY ACCORDING TO THE COMPANY. THE COMPANY OFFERED THE HOUSE PROPERTY INCOME ON THE BASIS OF THE RENT PAID BY THE SUB-TENANT DIRECTOR BUT THE A.O. HAS NOT ACCEPTED THE RENT PAID AS ACCORDING TO HIM THE ASSESSEE HAS NOT FOLLOWED THE PROVISIONS OF MAHARASHTRA RENT CONTROL ACT AND ACCO RDINGLY HE AFTER ENQUIRIES ESTIMATED THE VALUE OF THE PROPERTY ON M ARKET BASIS AND DETERMINED THE HOUSE PROPERTY INCOME. THE CIT(A) CO NFIRMED THE ACTION OF THE A.O. HOLDING THAT THE PROVISIONS OF MAHARASHTRA RENT CONTROL ACT HAVE BEEN VIOLATED BY THE COMPANY AND THE TENANT AND THE PROPERTY HAS TO BE VALUED AS WAS DONE BY THE A.O. HE CONFIRMED THE ACT ION OF THE A.O. 3. BEFORE US THE LEARNED COUNSEL SUBMITTED THAT THE OB JECTIONS OF THE A.O. AND THE CIT(A) THAT MAHARASHTRA RENT CONTROL A CT WAS VIOLATED IS ON THE BASIS THAT THE ASSESSEE HAS FIXED THE RENT OVER AND ABOVE THE STANDARD RENT AND ACCORDINGLY THE PROVISIONS ARE NOT APPLICA BLE. HE DREW OUR ATTENTION TO THE FACT THAT THE PROPERTY WAS TENANTE D FOR A LONG PERIOD AND THE PROVISIONS OF MAHARASHTRA RENT CONTROL ACT PROTECTS THE TENANT AND ALSO PERMITS THAT IF RENT WAS FIXED PRIOR TO IMPLEMENTAT ION OF MAHARASHTRA RENT CONTROL ACT 1999 THE RENT FIXED WILL BECOME STANDAR D REND UNDER THE ACT AND ACCORDINGLY THE ASSESSEE IS COVERED BY THE PROV ISIONS OF MAHARASHTRA RENT CONTROL ACT 1999. THE ASSESSEE ALSO PLACED A PAPER BOOK ON RECORD TO INDICATE THAT THERE WAS CERTAIN COURT PROCEEDINGS A TTACHING THE SAID PROPERTY BY THE GREATER BOMBAY CO-OPERATIVE BANK AS THE COMP ANY STOOD GUARANTEE FOR LOAN TAKEN BY ANOTHER COMPANY AND IN THIS PROCE EDINGS THE HON'BLE BOMBAY HIGH COURT GRANTED TEMPORARY INJECTION AND T HE COURT OF SMALL CASES OF MUMBAI ALSO DECLARED SMT. ASHA RUIA AS A P ROTECTED TENANT AND ACCORDINGLY THE COMPANY CANNOT EVICT THE TENANT AND SO THE OBJECTIONS OF THE CIT(A) DOES NOT STAND. ITA NO. 696 & 697/MUM/2009 M/S. RAMGOPAL GANPATRAI & SONS 3 4. THE LEARNED D.R. HOWEVER RELIED ON THE ORDERS OF THE A.O. AND CIT(A). 5. WE HAVE CONSIDERED THE ISSUE. AS SEEN FROM THE PAPE RS AVAILABLE IN THE PAPER BOOK THE ASSESSEE HAS GIVEN THE PROPERTY ON RENT BY MR. T.B. RUIA LONG BACK AND ON HIS DEATH MRS. ASHA RUIA BECAME TH E TENANT AND THERE WAS A REVISED AGREEMENT DATED 14.08.2000. IN ALL TH E YEARS THE A.O. HAS BEEN ACCEPTING THE RENT RECEIVED FROM THE ASSESSEE COMPANY AND IN FACT THE ASSESSMENT ORDERS FOR A.Y. 2004-05 PLACED ON RECORD ALSO INDICATE THAT THE RENT RECEIVED AT RS.30 000/- WAS ACCEPTED AS SUCH I N THE ORDER UNDER SECTION 143(3) AND INCOME FROM HOUSE PROPERTY WAS D ETERMINED AT RS.5 040/-. FURTHER ESTABLISHMENT AND STATUTORY EXP ENSES ARE ALSO ALLOWED CONTESTED IN GROUND NO. 2. IT IS ALREADY ESTABLISHE D BY VARIOUS PRINCIPLES THAT WHILE INVOKING THE PROVISIONS OF SECTION 23 TH E A.O. HAS TO CONSIDER THE MUNICIPAL RATEABLE VALUE OR STANDARD RENT OR ACTUAL RENT RECEIVED WHICHEVER IS HIGHER. THE EXISTING CASE LAW ON THIS ISSUE HAS BEEN ELABORATELY DISCUSSED BY THE COORDINATE BENCH IN THE CASE OF ITO VS. MAKR UPA CHEMICALS (P) LTD. 108 ITD 95 (BOM) WHEREIN METHODOLOGY WAS GIVEN IN A RRIVING AT THE ANNUAL VALUE OF PROPERTY UNDER THE PROVISIONS OF SECTION 2 3(1). 11. LET US NOW EXAMINE AND ANALYSE THE LEGAL POSI TION AS LAID DOWN BY THE HONBLE HIGH COURTS AS WELL AS THE TRIBUNAL. IT WOULD BE APPROPRIATE AT THIS STAGE TO REPRODUCE THE RELEVANT PROVISIONS. SEC. 23(1) AS ORIGINALLY ENACTED READ AS UNDER : '23. (1) FOR THE PURPOSES OF S. 22 THE ANNUAL VALU E OF ANY PROPERTY SHALL BE DEEMED TO BE THE SUM FOR WHICH THE PROPERT Y MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR.' THE AFORESAID PROVISIONS WERE AMENDED BY THE PARLIA MENT EFFECTIVE FROM 1ST APRIL 1976. THE RELEVANT PORTION OF THE AMENDE D PROVISIONS READS AS UNDER : 'ANNUAL VALUE HOW DETERMINED : (1) FOR THE PURPOSE OF S. 22 THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE : (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABL Y BE EXPECTED TO LET FROM YEAR TO YEAR; OR (B) WHERE THE PROPERTY IS LET AND THE ANNUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS IN EX CESS OF THE SUM REFERRED TO IN CLAUSE (A) THE AMOUNT SO RECEIV ED OR RECEIVABLE.' 12. THE EXPRESSION 'THE GROSS ANNUAL RENT AT WHICH SUCH HOUSE OR BUILDING... MAY REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR' AS ITA NO. 696 & 697/MUM/2009 M/S. RAMGOPAL GANPATRAI & SONS 4 CONTAINED IN S. 127(A) OF THE CALCUTTA MUNICIPAL AC T 1923 WHICH IS ANALOGOUS TO THE EXPRESSION IN S. 23 OF THE ACT WAS CONSIDERED BY THE HONBLE SUPREME COURT IN THE CASE OF CORPORATION OF CALCUTTA VS. SMT. PADMA DEVI AIR 1962 SC 151. THEIR LORDSHIPS AT P. 1 53 OBSERVED AS UNDER : 'A BARGAIN BETWEEN A WILLING LESSOR AND A WILLING L ESSEE UNINFLUENCED BY ANY EXTRANEOUS CIRCUMSTANCES MAY AF FORD A GUIDING TEST OF REASONABLENESS. AN INFLATED OR DEFL ATED RATE OF RENT BASED UPON FRAUD EMERGENCY RELATIONSHIP AND SUCH OTHER CONSIDERATIONS MAY TAKE IT OUT OF THE BOUNDS OF REA SONABLENESS.' ON THE SAME PAGE IT WAS FURTHER OBSERVED AS UNDER : 'A COMBINED READING OF THE SAID PROVISIONS LEAVES N O ROOM FOR DOUBT THAT A CONTRACT FOR A RENT AT A RATE HIGHER T HAN THE STANDARD RENT IS NOT ONLY NOT ENFORCEABLE BUT ALSO THAT THE LANDLORD WOULD BE COMMITTING AN OFFENCE IF HE COLLECTED A RENT ABOVE THE RATE OF THE STANDARD RENT. ONE MAY LEGITIMATELY SAY UNDER THOSE CIRCUMSTANCES THAT A LANDLORD CANNOT REASONABLY BE EXPECTED TO LET A BUILDING FOR A RENT HIGHER THAN THE STANDARD RENT. A LAW OF THE LAND WITH ITS PENAL CONSEQUENCES CANNOT BE IGNORED IN ASCERTAINING THE REASONABLE EXPECTATIONS OF A LANDL ORD IN THE MATTER OF RENT. IN THIS VIEW THE LAW OF THE LAND M UST NECESSARILY BE TAKEN AS ONE OF THE CIRCUMSTANCES OBTAINING IN T HE OPEN MARKET PLACING AN UPPER LIMIT ON THE RATE OF RENT FOR WHIC H A BUILDING CAN REASONABLY BE EXPECTED TO LET.' FROM THE ABOVE OBSERVATIONS IT IS CLEAR THAT THE M UNICIPAL COMMITTEE COULD NOT DETERMINE THE ANNUAL VALUE OVER AND ABOVE THE STANDARD RENT. SIMILAR VIEW WAS TAKEN IN THE SUBSEQUENT JUDGMENT I N THE CASE OF CORPORATION OF CALCUTTA VS. LIFE INSURANCE CORPORAT ION AIR 1970 SC 1417. HOWEVER THIS PRINCIPLE WAS FURTHER EXTENDED BY THE HON BLE SUPREME COURT IN THE CASE OF GUNTOOR MUNICIPAL COUN CIL VS. GUNTOOR TOWN RATE PAYERS ASSOCIATION AIR 1971 SC 353 BY HOLDING THAT WHERE THE STANDARD RENT IS NOT FIXED BY THE RENT CONTROLL ER THEN THE ASSESSING AUTHORITY UNDER THE MUNICIPAL ENACTMENT SHOULD DETE RMINE THE STANDARD RENT IN ACCORDANCE WITH THE RENT CONTROL LEGISLATIO N. THIS IS APPARENT FROM THE FOLLOWING OBSERVATIONS OF THEIR LORDSHIPS AT P. 355 : 'IT IS PERFECTLY CLEAR THAT THE LANDLORD CANNOT LAW FULLY EXPECT TO GET MORE RENT THAN THE FAIR RENT WHICH IS PAYABLE IN AC CORDANCE WITH THE PRINCIPLES LAID DOWN IN THE ACT. THE ASSESSMENT OF VALUATION MUST TAKE INTO ACCOUNT THE MEASURE OF FAIR RENT AS DETERMINABLE UNDER THE ACT. IT MAY BE THAT WHERE THE CONTROLLER HAS NOT FIXED THE FAIR RENT THE MUNICIPAL AUTHORITIES WILL HAVE TO ARRIVE AT THEIR OWN FIGURE OF FAIR RENT BUT THAT CAN BE DONE WITHOU T ANY DIFFICULTY BY KEEPING IN VIEW THE PRINCIPLES LAID DOWN IN S. 4 OF THE ACT FOR DETERMINATION OF FAIR RENT.' 13. THE ABOVE DECISIONS WERE CONSIDERED AND FOLLOWE D BY THE APEX COURT IN THE CASE OF DEWAN DAULAT RAI KAPOOR VS. NDMC (SU PRA). THE ITA NO. 696 & 697/MUM/2009 M/S. RAMGOPAL GANPATRAI & SONS 5 DISCUSSION ON THIS SUBJECT WOULD NOT BE COMPLETE WI THOUT REFERRING TO THE JUDGMENT OF THE APEX COURT IN THE CASE OF DR. BALBI R SINGH VS. MCD (SUPRA) WHEREIN IT WAS HELD THAT IN A GIVEN CASE TH E RATEABLE VALUE DETERMINED BY THE MUNICIPAL AUTHORITY MAY BE LESS T HAN THE STANDARD RENT HAVING REGARD TO VARIOUS ATTENDANT CIRCUMSTANC ES AND CONSIDERATION. IN SUCH CASES THE COURT OPINED THAT IT IS THE RATEABLE VALUE SO DETERMINED WHICH SHALL BE TAKEN FOR TAX PU RPOSES AND NOT THE STANDARD RENT. IT WAS HELD THAT THE STANDARD RENT W AS THE UPPER LIMIT WHICH CANNOT BE EXCEEDED IN ANY CASE. 14. ALL THE DECISIONS MENTIONED ABOVE WERE RENDERED IN CONNECTION WITH THE DETERMINATION OF RATEABLE VALUE UNDER MUNICIPAL LAWS. THE RATIO LAID DOWN IN THE ABOVE DECISIONS HAS BEEN APPLIED BY THE APEX COURT FOR DETERMINING THE ALV UNDER S. 23 OF THE ACT IN THE C ASE OF MRS. SHIELA KAUSHISH (SUPRA) ON ACCOUNT OF SIMILARITY IN THE PR OVISIONS UNDER THE MUNICIPAL ENACTMENTS AND S. 23 OF IT ACT 1961. THU S THE RATEABLE VALUE IF CORRECTLY DETERMINED UNDER THE MUNICIPAL LAWS C AN BE TAKEN AS ALV UNDER S. 23(1)(A) OF THE ACT. TO THAT EXTENT WE AGR EE WITH THE CONTENTION OF THE LEARNED COUNSEL OF THE ASSESSEE. HOWEVER WE MAKE IT CLEAR THAT RATEABLE VALUE IS NOT BINDING ON THE AO. IF THE AO CAN SHOW THAT RATEABLE VALUE UNDER MUNICIPAL LAWS DOES NOT REPRESENT THE C ORRECT FAIR RENT THEN HE MAY DETERMINE THE SAME ON THE BASIS OF MATERIAL/ EVIDENCE PLACED ON RECORD. THIS VIEW IS FORTIFIED BY THE DECISION OF P ATNA HIGH COURT IN THE CASE OF KASHI PRASAD KATARUKA VS. CIT 1976 CTR (PAT ) 95 : (1975) 101 ITR 810 (PAT). 15. THE ABOVE DISCUSSION LEADS TO THE CONCLUSIONS T HAT : (I) ALV WOULD BE THE SUM AT WHICH THE PROPERTY MAY BE REASONABLY LET OUT BY A WILLING LESSOR TO A WILLING LESSEE UNINFLUENCED BY ANY EXTR ANEOUS CIRCUMSTANCES (II) AN INFLATED OR DEFLATED RENT BASED ON EXTRANEO US CONSIDERATION MAY TAKE IT OUT OF THE BOUNDS OF REASONABLENESS (III) ACTUAL RENT RECEIVED IN NORMAL CIRCUMSTANCES WOULD BE A RELIABLE EVIDENCE UNLESS THE RENT IS INFLATED/DEFLATED BY REASON OF EXTRANEOUS CONSIDERA TION (IV) SUCH ALV HOWEVER CANNOT EXCEED THE STANDARD RENT AS PER THE RENT CONTROL LEGISLATION APPLICABLE TO THE PROPERTY (V) IF STAN DARD RENT HAS NOT BEEN FIXED BY THE RENT CONTROLLER THEN IT IS THE DUTY O F THE AO TO DETERMINE THE STANDARD RENT AS PER THE PROVISIONS OF RENT CONTROL ENACTMENT (VI) THE STANDARD RENT IS THE UPPER LIMIT IF THE FAIR RENT IS LESS THAN THE STANDARD RENT THEN IT IS THE FAIR RENT WHICH SHALL BE TAKEN AS ALV AND NOT THE STANDARD RENT. 16. STILL THE QUESTION REMAINS TO BE DECIDED IS HOW TO DETERMINE THE REASONABLE/FAIR RENT. THE APEX COURT HAS INDICATED IN THE ABOVE JUDGMENTS THAT EXTRANEOUS CIRCUMSTANCES MAY INFLATE /DEFLATE THE FAIR RENT. SO THE QUESTION ARISES AS TO WHAT MAY THE CI RCUMSTANCES WHICH MAY BE TAKEN INTO CONSIDERATION WHILE DETERMINING T HE FAIR RENT. IN OUR OPINION NO PARTICULAR TEST CAN BE LAID DOWN SINCE IT WOULD DEPEND ON THE FACTS OF EACH CASE. HOWEVER WE FIND THAT HONBLE S UPREME COURT HAD TO CONSIDER THIS QUESTION IN THE CASE OF MOTICHAND HIR ACHAND VS. BOMBAY MUNICIPAL CORPN. AIR 1968 SC 441 WHEREIN IT WAS OBS ERVED AS UNDER : ITA NO. 696 & 697/MUM/2009 M/S. RAMGOPAL GANPATRAI & SONS 6 'IT IS WELL RECOGNIZED PRINCIPLE IN RATING THAT BOT H GROSS VALUE AND NET ANNUAL VALUE ARE ESTIMATED BY REFERENCE TO THE RENT AT WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM Y EAR TO YEAR. VARIOUS METHODS OF VALUATION ARE APPLIED IN ORDER T O ARRIVE AT SUCH HYPOTHETICAL RENT FOR INSTANCE BY REFERENCE TO TH E ACTUAL RENT PAID FOR THE PROPERTY OR FOR OTHERS COMPARABLE TO IT OR WHERE THERE ARE NO RENTS BY REFERENCE TO THE ASSESSMENTS OF COMPARABLE PROPERTIES OR TO THE PROFITS CARRIED FROM THE PROPERTY OR TO THE COS T OF CONSTRUCTION.' EVEN THE HONBLE BOMBAY HIGH COURT IN THE CASE OF J .K. INVESTORS (BOMBAY) LTD. (SUPRA) HAS HELD THAT UNDER S. 23(1)( A) OF THE ACT THE AO CAN TAKE INTO CONSIDERATION VARIOUS FACTORS LIKE CO NTRACTORS METHOD AS IS APPARENT FROM THE FOLLOWING OBSERVATIONS : 'AT THE COST OF REPETITION IT MAY BE MENTIONED THA T UNDER S. 23(1)(A) THE AO HAS TO DECIDE THE FAIR RENT OF THE PROPERTY. WHILE DECIDING THE FAIR RENT VARIOUS FACTORS COULD BE TAKEN INTO ACCO UNT. IN SUCH CASES VARIOUS METHODS LIKE CONTRACTORS METHOD COULD BE T AKEN INTO ACCOUNT.' 17. THE CIRCUMSTANCES MENTIONED ABOVE ARE ONLY ILL USTRATIVE AND NOT EXHAUSTIVE. THEREFORE IN OUR OPINION THE AO CAN T AKE INTO CONSIDERATION ANY CIRCUMSTANCE WHICH MAY INFLATE/DEFLATE THE FAIR RENT UNDER S. 23(1)(A) OF THE ACT. IF SUCH RENT IS LESS THAN THE STANDARD RENT THEN THE SAME SHALL BE TAKEN AS FAIR RENT OTHERWISE THE STA NDARD RENT SHALL BE CONSIDERED AS FAIR RENT UNDER S. 23(1)(A) OF THE AC T. ONCE THE FAIR RENT IS SO DETERMINED THEN THE APPLICABILITY OF S. 23(1)(B ) WOULD HAVE TO BE CONSIDERED. IF THE ACTUAL RENT RECEIVED/RECEIVABLE IS HIGHER THAN THE FAIR RENT THEN THE ACTUAL RENT WOULD BE TREATED AS ALV OTHERWISE THE FAIR RENT SO DETERMINED SHALL BE TAKEN AS ALV. 6. IN THIS CASE IT IS ALSO ON RECORD THAT THE PROPERT Y IS A TENANTED PROPERTY AND THE TENANT IS A PROTECTED TENANT AS PE R THE ORDERS OF THE COURT. SINCE THE RENT RECEIVED BY THE ASSESSEE IS MORE THA N THE STANDARD RENT/MUNICIPAL RATEABLE VALUE THE A.O. HAS NO OPTIO N THAN TO ACCEPT THE RENT RECEIVED AS PER THE EXISTING JUDICIAL PRINCIPLE ON THIS ISSUE. IN VIEW OF THIS WE ARE NOT IN AGREEMENT WITH THE ORDERS OF THE A.O. AN D CIT(A) AND DIRECT HIM TO ACCEPT THE RENT OFFERED BY THE ASSESSEE. IN VIEW OF THIS GROUND NO. 1 IS ALLOWED. 7. GROUND NO. 2 PERTAINS TO THE ALLOWANCE OF ESTABLISH MENT AND STATUTORY EXPENSES NOT ALLOWED BY THE A.O. WHILE REDETERMININ G THE ANNUAL LETTING VALUE. 8. IT IS SEEN FROM THE RECORD THAT THE ASSESSEE HAS BE EN CALMING THESE EXPENSES AS PART OF COMPUTATION OF HOUSE PROPERTY I NCOME. AS SEEN FROM THE ITA NO. 696 & 697/MUM/2009 M/S. RAMGOPAL GANPATRAI & SONS 7 RECORD A.O. IN A.Y. 2004-05 HAS ALLOWED THE EXPENDI TURE AND ALSO IN EARLIER YEARS. IN VIEW OF THIS THE A.O. IS DIRECTED TO ALLO W THE EXPENSES AS CLAIMED. GROUND IS CONSIDERED ALLOWED. 9. SIMILAR FACTS EXIST IN ITA NO. 696/MUM/2009 AND HER E ALSO THE TWO PROPERTIES OWNED BY THE ASSESSEE COMPANY ARE SUBJEC TED TO PROTECTED TENANCY UNDER THE MAHARASHTRA RENT CONTROL ACT 199 9 BEING DEVOLVED ON MR. T.B. RUIA AND MRS. ASHA RUIA AND MRS. VIDHI D. RUIA AFTER THE DEATH OF MR. T.B. RUIA. HERE ALSO THE PROPERTY WAS LET OUT F ROM 01.10.1987 AND THE DEPARTMENT HAS BEEN ACCEPTING THE SAME IN ALL THE E ARLIER YEARS. FOR THE REASONS DISCUSSED IN ITA NO. 697/MUM/2009 WE DIRECT THE A.O. TO ACCEPT THE RENT RECEIVED UNDER THE PROVISIONS OF SECTION 2 3(1) AND REDETERMINE THE HOUSE PROPERTY INCOME ACCORDINGLY. A.O. ALSO IS DIR ECTED TO ALLOW THE ESTABLISHMENT AND STATUTORY EXPENSES WHICH ARE BEIN G ALLOWED IN EARLIER YEARS. ACCORDINGLY THE GROUNDS ARE CONSIDERED ALLOW ED. 10. IN THE RESULT BOTH THE APPEALS ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 26 TH MARCH 2010. SD/- SD/- (R.K. GUPTA) (B. RAMAKOTAIAH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI DATED: 26 TH MARCH 2010 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. THE CIT(A) CENTRAL-V MUMBAI 4. THE CIT CENTRAL-II MUMBAI CITY 5. THE DR D BENCH ITAT MUMBAI BY ORDER //TRUE COPY// ASSISTANT REGISTRAR ITAT MUMBAI BENCHES MUMBAI N.P.