TMI Blog2003 (8) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... ders of the learned Commissioner of Income-tax (Appeals)-Central IV, Bombay dated 23-3-1995 in the case of the assessee in relation to orders under section 143(3), read with section 263 made by the Assessing Officer for assessment years 1988-89 and 1989-90. 3. The background facts relating to these four appeals briefly are that the assessee-company had on 19-11-1948 taken Plot Nos. 1082 to 1087 at Thane belonging to Bombay Port Trust on sub-lease from H.H. Sardar Syedna Taher Saifuddin Sahib and Another. Sub-clause (b) of clause 2 of the Deed provided that the sub-lessee would discharge all the existing liabilities as well as future rates, taxes, ground rent payable etc. to Bombay Port Trust. The assessee-company constructed godowns on these plots of land after obtaining the sanction from Bombay Port Trust and let the godowns out to various tenants. A lease rent of ₹ 2,250 per month was paid by the assessee as well as ground rent to Bombay Port Trust on behalf of the lessors. However, after lapse of several years Bombay Port Trust increased the ground rent in respect of the plots in question to ₹ 1,21,171.81 per month. The assessee-company represented that it was bou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the provisions of section 263 of the Act the assessee argued that the assessment orders had already merged in the appellate orders of the learned CIT(A) and as per the Explanation (c ) to sub-section 263(1) the power of Commissioner under section 263 was available only to the matters that had not been considered and decided in appeal by the learned CIT(A). The assessee pointed out that the issues relating to assessment of income from Thane property were the subject-matter of the appellate orders already passed. The learned CIT did not see force in these contentions of the assessee. He held the view that the Commissioner had power under section 263 to revise the assessment order on such matters or issues which had not been specifically adjudicated upon in the appellate order even if other aspects and issues in respect of the same source of income were considered and adjudicated upon. The learned CIT held that the view that the CIT(A) had gone into the question as to whether the burden of enhanced rent could be passed on to the tenants and whether the entire amount of enhanced rent in both the years could be assessed as part of the annual rent actually receivable by the assessee-c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid the Assessing Officer made assessment orders under section 143(3), read with section 263 for both the assessment years 1988-89 and 1989-90 on 29-7-1993. Both these orders are identically worded. In these orders the learned Assessing Officer has referred to his letter dated 23-3-1993 addressed to the assessee whereby the assessee was informed that in view of the assessee disputing the enhancement of ground rent by the Bombay Port Trust the liability being a contractual obligation had not been ascertained or crystallised and being of contingent in nature was not allowable as deduction as claimed by the assessee. The assessee by its letter dated 5-4-1993 and 16-7-1993 objected to the disallowance denying the allegation that the enhanced ground rent payable was of contingent nature. Vide para 10 of the letter dated 5-4-1993 the assessee stated, In our case, there is no refusal to accept the enhancement by the Head Lessors of the ground rent and, therefore, in terms of clause 2 of the said agreement dated 19-11-1948, we, being the sub-lessees, are bound to honour the liability of the increased ground rent . The assessee also placed reliance on the judgment of Hon ble Bombay Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3-1995 submitted that he had visited the Bombay Port Trust and had been informed that the original suit filed by the Bombay Port Trust against H.H. Sardar Syedna Taher Saifuddin Saheb and Another had been withdrawn and the Bombay Port Trust was proceeding under the PPE Act in this regard. It was also submitted that the enhanced ground rent was being revised and that it would be effected from 1994 only and that for earlier years there would be some revision in the ground rent. The letter issued by the Bombay Port Trust to the Officer confirmed that in respect of Plot Nos. 1082 to 1087, the suits filed by the Bombay Port Trust were for eviction and the suits had been withdrawn and action under PPE Act was being taken. The learned CIT(A) held that from the letter of the Assessing Officer it appeared that there was some action being contemplated by the Bombay Port Trust to revise the ground rent but it was also clear that the demand raised on the assessee as evidenced by the bills which the assessee produced had not been withdrawn by the Bombay Port Trust. The bills raised by the Bombay Port Trust for an aggregate amount of ₹ 14,53,812 for assessment year 1988-89 and ₹ 25,4 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rent issue is not examined such an order would be erroneous and prejudicial to the interests of the revenue. The learned AR argued that from 1948 agreement it was quite clear that increased ground rent was the liability of the assessee. Further it had been explained at all stages that neither the assessee nor the original lessee had ever disputed the increased liability. The Assessing Officer had gone into the question of increased liability in the earlier assessment years and allowed the deduction to the assessee after being satisfied about the correctness of the same. In the assessment orders for assessment years 1988-89 and 1989-90 the Assessing Officer had followed the orders for the earlier years. The learned AR argued that CIT passed the impugned orders under section 263 on totally wrong premises. The same mistake was perpetuated in the assessment orders made by the Assessing Officer to give effect to the orders under section 263 of the learned CIT. 7. We have carefully considered the rival submissions. It is seen that the impression that the assessee had not accepted the increased ground rent liability and the assessee was disputing the same is the main basis for the impu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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