TMI Blog2008 (1) TMI 642X X X X Extracts X X X X X X X X Extracts X X X X ..... t.; and the payment to Aasia Corporation was at the rate of Rs. 207 per sq. ft. per month for occupied area of 2980 sq. ft. It is noted by the Assessing Officer in the assessment order that the two companies i.e. Aasia Management Consultancy Pvt. Ltd. and Aasia Corporation to which, rent was paid are the sister concerns of the assessee within the meaning of section 40A(2)( b ). Enquiries were conducted by the Assessing Officer during the assessment proceedings for assessment year 1998-99 in order to ascertain the correct market rate in the area of Dr. Annie Besant Road, Worli. Enquiries revealed that the market rate of rent in the area of assessee building varied from Rs. 25 to Rs. 90 per sq. ft. per month. During the assessment year 1998-99, the Assessing Officer after detailed reason accepted the fair value of rent at Rs. 160 per sq. ft. and disallowed the rent at the rate of Rs. 49 per sq. ft. per month. The said disallowances have been upheld by learned CIT(A) and the Tribunal also in that year. During the assessment proceedings for the current year also, the Assessing Officer felt that the rent was excessive and unreasonable and the assessee was asked that, why not the exc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the disallowance made by the Assessing Officer of Rs. 28,46,720. 2.2 Now, the assessee is in appeal by way of cross-objection against the disallowance upheld by learned CIT(A) and the revenue is in appeal against the disallowance deleted by learned CIT(A). 3. It is submitted by learned DR of the revenue that in assessment year 1998-99, similar issue is decided against the assessee by the Tribunal as per ITA No. 298/Mum./2002, dated 9-11-2004, copy of which is appearing on page Nos. 17 to 19 of the paper book. It is submitted that since, similar issue was decided by the Tribunal against the assessee, in the present year also, the order of learned CIT(A) should be set aside and the order of the Assessing Officer should be restored. It is also submitted by him that learned CIT(A) has decided the issue partly in favour of the assessee on the basis of newspaper cutting of the paper Economic Times as appearing on page No. 14 of the paper book, in which, it is reported that prevailing rate of rent in the building Sarjan Plaza at Worli is Rs. 193 per sq. ft. per month. It is submitted that there is no date mentioned in this newspaper cutting; and hence, it is not clear as to wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eant to check evasion of tax, and should not be applied in a manner which will cause hardship in bona fide cases. It is pointed that in the present case, rent is being paid by the assessee company to two group concerns and both these concerns are paying taxes at the same rate i.e. at the rate of 35 per cent plus surcharge at the rate of 13 per cent. It is submitted that the assessment order for assessment year 2001-02 in the case of M/s. Aasia Management Consultancy Pvt. Ltd. is appearing on page No. 22 of the paper book and as per the same, total assessed income of this company is Rs. 403.34 lakhs, on which, tax of Rs. 159.52 lakhs was paid. Regarding the other concern i.e. M/s. Aasia Corporation, it is submitted that there was taxable income of Rs. 81.15 lakhs during this year before set off of brought forward loss; and hence, it cannot be said that any high rent was paid by the assessee-company for tax evasion. It is also submitted that the same rent was paid by the other group company and there is no disallowance in that case i.e. Hinduja TMT Ltd. (formerly known as Hinduja Finance Corporation Ltd.). He submitted a copy of the assessment order dated 12-3-2004 of tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er square feet per month extra was considered reasonable in that year in the case of the assessee in addition to the highest rate of Rs. 90 per square feet per month being the market rate of rent in the area in that year. Tribunal has approved this order of the Assessing Officer in that year. As against this, we find that in the present year, the Assessing Officer has noted in the assessment order that the market rate of rent was Rs. 160 per sq. ft. per month as per rent agreement dated 28-8-2000 between M/s. Musheer Finlease and Invest-ments Pvt. Ltd. and M/s. Turner International India Pvt. Ltd. There is no other instance recorded by the Assessing Officer in the assessment order to show that the market rate prevailing in the area where the impugned building is located was less than Rs. 160 per sq. ft. during this year. We find force in the contention of learned AR of the assessee that the issue in the present year cannot be decided merely on the basis of rate approved by the Tribunal in assessment year 1998-99 because in that year and in the present year, rate of rent being paid by the assessee is same; but market rate of rent as noted by the Assessing Officer in the present year ..... X X X X Extracts X X X X X X X X Extracts X X X X
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