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When the circumstances under consideration same as last year it is bound to follow the the order of tribunal of previous year

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Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
Assessee company is deriving income from doing hard chromium plating on textiles, embossing rollers, mirror rollers, machinery parts etc. and rent from its building premises at Worli. Return of income was filed on 26.09.2008 declaring net loss of 1.85 lakhs. Assessment order passed on 22-12-2010 by the Assessing Officer (AO) u/s. 143 (3) of the I.T.Act 1961(Act) determining the total income at Rs.1.55 Crores. Passing the assessment order AO held that the facts and the circumstances of the case under consideration and for the A.Y.2007-08 were identical-including the let out area and the tenants of the property in question. Following the assessment order for the A.Y.2007-08 he invoked the provisions of Sec.23(1)(a) of the Act to determine the taxable rent of the assessee. Accordingly, he assessed taxable property income at Rs. 1,57,64,800/- as against Rs.30,130/- disclosed by the appellant.

Citation :
Income Tax Officer 2(2)(4), 542, Aayakar Bhavan, 5th Floor, M.K. Road, Mumbai – 400 020. (Appellant) Vs. Photogravurs (I) P. Ltd., Sheth Chambers, 1st Floor, 21, Dr. V.B. Gandhi Marg, Fort, Mumbai-400 023. PAN: AAACP 4088L (Respondent)

IN THE INCOME TAX APPELLATE TRIBUNAL

MUMBAI BENCHES “C” MUMBAI

BEFORE SHRI D.K. AGARWAL, JUDICIAL MEMBER

AND

SHRI RAJENDRA, ACCOUNTANT MEMBER

ITA No.5527/Mum/2011

Assessment Year 2008-09

Income Tax Officer 2(2)(4),

542, Aayakar Bhavan,

5th Floor, M.K. Road,

Mumbai – 400 020.

(Appellant)

Vs.

Photogravurs (I) P. Ltd.,

Sheth Chambers, 1st Floor,

21, Dr. V.B. Gandhi Marg, Fort,

Mumbai-400 023.

PAN: AAACP 4088L

 (Respondent)

Revenue by: Shri D.S. Sunder Singh, DR

Assessee by: Shri Jitendra Singh

Date of hearing: 14-06-2012

Date of pronouncement: 20-06-2012

ORDER

PER RAJENDRA, A.M.

This appeal was filed against the Order dt. 27-05-2011 of the CIT(A)-5, Mumbai on the following Grounds:

“i. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in allowing assessee’s appeal without adjudicating the detailed evidences gathered by the A.O.”

“ii. On the facts and in the circumstances of the case and in law, the ld. CIT(A) has erred in allowing the assessee’s appeal on the basis of Hon’ble ITAT’s decision in its own case vide No. 1813/Mum/2011 wherein order was passed ignoring the observations of ld. CIT(A) and the same is being challenged before the Hon’ble Bombay High Court.

“iii. For these and other grounds that may be urged at the time of hearing, the decision of the CIT(A) may be set aside and that of the AO restored.”

Facts of the case-

2. Assessee company is deriving income from doing hard chromium plating on textiles, embossing rollers, mirror rollers, machinery parts etc. and rent from its building premises at Worli. Return of income was filed on 26.09.2008 declaring net loss of 1.85 lakhs. Assessment order passed on 22-12-2010 by the Assessing Officer (AO) u/s. 143 (3) of the I.T.Act 1961(Act) determining the total income at Rs.1.55 Crores. Passing the assessment order AO held that the facts and the circumstances of the case under consideration and for the A.Y.2007-08 were identical-including the let out area and the tenants of the property in question. Following the assessment order for the A.Y.2007-08 he invoked the provisions of Sec.23(1)(a) of the Act to determine the taxable rent of the assessee. Accordingly, he assessed taxable property income at Rs. 1,57,64,800/- as against Rs.30,130/- disclosed by the appellant.

3. Assessee preferred an appeal against the said order. First Appellate Authority (FAA) following the decision of ITAT Mumbai (ITA No. 1813/Mum/2011dated 27.04.2011-A.Y.2007-08) decided the issue in favour of the appellant. He held that in view of the fact that the addition made during the year was fully based on the findings of the AO in order for A.Y.2007-08 on the same set of facts and circumstances, that the same had been knocked off completely by the above order of the Tribunal, that the very foundation of the addition was not more in existence. Following the said order of the Tribunal, he directed the AO to replace the rental income estimated by him by income disclosed by the assessee.

4. Before us, DR fairly conceded that the issue was covered in favour of the appellant by the order of the Tribunal passed for the earlier A.Y.(A.Y.2007-08). AR submitting the copy of the said order of the Tribunal stated that order of the FAA was as per law. After hearing the rival submissions and perusal of the above mentioned order of the Tribunal we hold that appeal filed by the AO deserves to be dismissed.

5. While deciding the appeal filed by the assessee for last assessment year ‘B’ Bench of the Tribunal had referred to the matter of Reclamation Reality India Pvt. Ltd. (ITA 14114/M/07 dtd. 26.11.2010-AY.2004-05).After referring the provisions of the Act and the Maharashtra Rent Control Act, Bench held as under:

“We are in considered agreement with the view so taken by the coordinate Bench of this Tribunal. We have also noted that municipal valuation a copy of which is placed at page 30 of the paper book, is less than rent received by the asseesee. Accordingly we find that the very foundation of the impugned addition made to the property income returned by the assessee are devoid of legally sustainable merits.”

As the facts and circumstance of the case under consideration are same as last assessment year, so we are also inclined to follow the orders of the Tribunal for the previous assessment year. As a result appeal filed by the AO stands dismissed.

Order pronounced in the open court on 20th June, 2012.

                                                          Sd/-                              Sd/-

                                             (D.K. AGARWAL)          (RAJENDRA)

                                          JUDICIAL MEMBER ACCOUNTANT MEMBER

Mumbai,

Date 20th June, 2012

TNMM

Copy to:

1. Assessee

2. Respondent

3. The concerned CIT (A)

4. The concerned CIT

5. DR “C” Bench, ITAT, Mumbai

6. Guard File

(True copy)

By Order

Asst. Registrar,

Income Tax Appellate Tribunal,

Mumbai Benches, Mumbai

 

CS Bijoy
on 19 July 2012
Published in Income Tax
Views : 1777
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