TMI Blog2011 (2) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... since the CIT(A) has not considered the same, which was given before him for the first time - Appeal is allowed by way of remand to AO - ITA No. 4028 and 4029/Mum/2008, - - - Dated:- 28-2-2011 - R.K. Panda, J. K. Shivaram for the Appellant Satbir Singh, DR for the Respondent ORDER R.K. Panda:- The above two appeals filed by the assessee are directed against the separate orders dated 2.5.2008 and 11.4.2008 of the CIT(A)-XXIX, Mumbai relating to assessment years 2000-01 and 2001-02 respectively. For the sake of convenience, both these appeals were heard together and are being disposed of by this common order. ITA No. 4028/Mum/2008 (AY 2001-02):- 2. Grounds of appeal no.1 relates to the order of the CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a monthly rent of Rs. 2,75,000/-. However, GACL had not accepted any interest free deposit. 3.2 In view of the above mentioned facts and since the assessee has minimized the rental income received by accepting the huge security deposits, the Assessing Officer initiated proceedings u/s 147 and notice u/s 148 was issued. During the course of assessment proceedings, the Assessing Officer asked the assessee to explain as to why the rental income should not be computed taking into account the huge deposit received. Rejecting the various explanations given by the assessee, the Assessing Officer held that it would be quite reasonable and logical to compute the taxable income in the hands of the assessee on the basis of rent received by GACL. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the same in view of the decision of the Hon'ble Bombay High Court in the case of J K Investors (Bombay) Ltd reported in 248 ITR 723. 6.1 Referring to another decision of the Tribunal in the case of DCIT vs Vaishnav S Puri (HUF) vide ITA Nos. 7046/Mm/2006, 4382/Mum/2007 and 4747/Mum/2008 for AYs 2003-04,04-05 and 05-06 order dated 12.1.2011, he submitted that the Tribunal, following the decision in the case of Reclamation Reality India Pvt Ltd (supra) held that even for the purpose of sec. 23(1)(a), notional interest income on the security deposit/advance rent cannot be included in the income from property. 6.2 Referring to the decision of the Bombay High Court in the case of Smt Smitaben N Ambani vs CIT reported in 323 ITR 104 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re is also no dispute to the fact that the flat in the same building and the same area had been let out for a monthly rent of Rs. 2.75 lacs by GACL; who had not accepted any interest free deposit. According to the Assessing Officer, monthly rent of the said property should be Rs. 2.75 lacs which has been upheld by the CIT(A), who has also held that the same has been worked out by the Assessing Officer u/s 23(1)(a) of the Act. 7.1 It is the submission of the ld counsel for the assessee that interest on interest free deposit cannot be taken into account for sec. 23(1)(a) of the Act and Municipal Rateable value has to be adopted for the purpose of ALV. I find the Tribunal in the case of Reclamation Reality India Pvt Ltd (supra) at para 25 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Co. (P) Ltd. vs. ACIT (2004) 84 TTJ 198 (Mum) and ITO vs. Baker Technical Services (P) Ltd. (2009) 126 TTJ 455 (Mum) (TM) and the order of the Delhi Bench of the Tribunal in the case of Fizz Drinks Ltd. vs. DCIT (2005) 95 TTJ 429 (Del), that the notional income was rightly added since the income from the property is computed under section 23(1)(a) of the Act. This issue is now covered in favour of the assessee by the recent order dated 26.11.2010 passed by the Mumbai Bench "D" in the case of DCIT vs. Reclamation Realty India Pvt. Ltd. (ITA No. 1411/Mum/2007 and connected appeals) (Assessment Year: 2004-05), a copy of which was filed before us on behalf of the assessee. In this order, after considering the entire legal position and with par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... operty. I hold and direct accordingly. This ground of the assessee is accordingly partly allowed, ITA No. 4029/Mum/2008 (AY 2001-02):- 9. The grounds raised by the assessee in the impugned appeal are as under:- "The ld CIT(A) erred in confirming the action of the Assessing Officer in assessing the income in respect of a flat at NCPA at Rs. 4,77,450/- as against Rs. 54,449/- as declared in the return. The ld CITA) erred in directing the income from NCPA property to be assessed u/s 23(1) (a) of the Act as against section 23(1) (b) applied by the Assessing Officer. The ld CIT(A) erred in not adopting the municipal rateable value of Rs.1,05,718/- as per BMC Valuation, as the sum for which the property might reasonably be exp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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