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2016 (2) TMI 837 - ITAT MUMBAI

2016 (2) TMI 837 - ITAT MUMBAI - TMI - Disallowance of expenses - AO has disallowed the expenses in proportion to various streams of income earned by the assessee company considering the expenses as common expenses - Held that:- We have observed that the assessee company is a listed company and the assessee company had to perform certain corporate , regulatory , management and compliance functions under various statutes/regulations like Companies Act, listing regulations under the SEBI Act , sto .....

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nd exempt income u/s 14A of the Act. The AO has disallowed the expenses in proportion to various streams of income earned by the assessee company considering the expenses as common expenses. In our considered view , the expenses cannot be disallowed in the manner as was done by the AO unless the AO bring on record cogent material and evidence to substantiate that the expenses claimed by the assessee company are not attributable to the business carried on by the assessee company and the disallowa .....

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income from house property’ which shall be the annual letting value from year to year for any part of the property which is let , then sum for which the property might reasonably be expected to be let from year to year in the hands of the owner u/s 22 and 23 of the Act shall be brought to tax but in the instant case the assessee company has merely allowed the usage of the area/space to WTFL without earmarking any specific area , hence, the same cannot be charged to tax under the head income from .....

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notional rent on account of allowing subsidiary company to use its office space added in the manner by the ld. AO cannot be sustained in the hands of the assessee company which is ordered to be deleted and the order of CIT(A) is confirmed/sustained in which we have found no infirmity. - Decided in favour of assessee

Income from house property - addition made by the AO of the notional rent in the hand of the assessee company - Held that:- Section 269UA(f) stipulates that transfer of pr .....

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. 12th October, 1994 for a period of 11 years 11 months, however, it is stipulated in the agreement that the lessee is occupying the same since last several years. Further the right of sub-letting has also been provided to the lessee. The assessee company has expressed its desire to renew the same for further period of 11 years and 11 months n response to the request of the lessee. M/s Walchand & Co. Pvt. Ltd. subletted the said premises which has been offered to tax the actual rent of ₹ 1 .....

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same and confirm the deletion of the addition made by the AO of the notional rent in the hand of the assessee company which is subject to verification by the AO that the same rent has suffered taxation in the hands of the Walchand and Company Private Limited which was also stipulated by the CIT(A) in his orders dated 05.02.2013 which we confirm.- Decided in favour of assessee - ITA No. 2543/Mum/2013, ITA No.3527/Mum/2013, CO No.156/Mum/2014 - Dated:- 4-2-2016 - Amit Shukla, JM And Ramit Kochar, .....

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re heard together and are disposed of by this common order for the sake of convenience and brevity. 2. First, we shall take up assessee company s appeal in ITA No. 2543/Mum/2013 wherein the following grounds have been raised by the assessee company in the memo of appeal filed with the Tribunal:- "Being aggrieved by the order dated 05.02.2013 passed by the learned Commissioner of Income Tax (Appeals)-6, Mumbai [CIT (A)] u/s. 250 of the Income-tax Act, 1961 ["Act"], your appellant p .....

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redited to the profit & loss account of the appellant. 1.2 On the facts and in the circumstances of the case, and also in law, the learned CIT(A) failed to appreciate and ought to have held that the AO having accepted that the appellant carried on the business during the year, there was no merit in disallowing the expenses on proportionate basis merely because the activity was negligible. 1.3 On the facts and in the circumstances of the case, and also in law, the learned CIT(A) failed to app .....

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CIT(A) be deleted. 3. The Revenue has raised the following grounds in the memo of appeal filed with the Tribunal:- "On the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in allowing relief to the assessee to the extent impugned in the grounds enumerated below: 1. The order of the CIT (A) is opposed to law and facts of the case. 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in deleting addition of notional rent .....

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as been assessed in the hands of Ms. Walchand & Co Pvt. Ltd., thereby ignoring the provision of sec 23(1)(a) of the I.T. Act. 4. 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." 4. The Brief facts of the case are that the assessee company s activities during the year are to invest, acquire, hold and exchange shares, debentures, mutual funds and bonds. The assessee company also earns income fr .....

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9/- viii) Provision for expenses w/back ₹ 1,26,199/- ix) Profit on sale of assets ₹ 1,84,852/- In the profit and loss account, the assessee company has shown net profit of ₹ 29,20,531/- after claiming the following expenses against the income earned:- 1 Employee s remuneration & Other expenses Rs.76,19,053/- 2 Loss on sale of investments Rs.3,59,065/- 3 Interest Rs.4,49,207/- 4 Depreciation, amortization and impairment Rs.19,60,006/- As per the computation of total income f .....

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other income) and hence it is difficult to prepare activity wise profit and loss account. The assessee company submitted that most of the expenses are common in nature and the direct expenses attributable to property income are identified and disallowed in the computation of income filed by the assessee company with return of income filed with the Revenue. Similarly, disallowance of the expenditure was offered u/s 14A of the Act which takes care of indirect expenses attributable to exempt incom .....

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quot; DC-Business" )as a major segment and the financing business took back seat , due to the then prevailing difficult market conditions and the assessee company gave up its NBFC status in October 2006. The assessee company also submitted that up to the assessment year 2008-09, the assessee s company business consisted of training business and financing business. The training business was transferred to the subsidiary company in the financial year 2007-08, however, that did not have any im .....

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of DC-Business. After obtaining the shareholder s approval, the assessee company transferred the DC-Business to a newly formed subsidiary company viz. Walchand TalentFirst Ltd.(in short "WTFL") on a going concern basis w.e.f 24.10.2007 and post transfer of the assesseee company business, the assessee company became the holding company of WTFL. The assessee company submitted that both these afore-stated Directors were the Promoters of the DC-Business which was initially established by .....

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he DC-Business to WTFL. However, the promoters continued to support this DC-Business which is now carried by WTFL. However, due to certain unforeseen circumstances, the finishing school s ambitious project in Bangalore could not materialize and the entire purpose of transferring the DC-Business to the subsidiary did not yield the expected results. Accordingly the assessee company reversed its earlier decision and merged WTFL with itself w.e.f. 1-4-2009 and thus brought back the DC-Business into .....

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stantially reduced in April, 2008 and aforesaid two Directors were also appointed as the working Directors in WTFL, from where also they drew remuneration, apart from some remuneration from the assessee company. The remuneration paid to these Directors during the financial year 2008-09 from both these companies was as under:- Name of the Director Designation Amount(Rs. In lacs) assessee company Amount(Rs. In lacs) WTFL Total (Rs in lacs) Ms. Pallavi Jha Managing Director 14.59 21.58 36.12 Mr. Sa .....

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/- on the inter-corporate deposits and other loans, which has always been assessed as business income in the past several years. It was submitted that the remuneration paid to these Directors was for the purpose of business, the expenses should be allowed despite the fact that the DC-Business was transferred to the subsidiary company WTFL. The assessee company submitted that the assessee company has deep interest in its subsidiary company. In support, the assessee company relied on the decision .....

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the expenditure were incurred for the purposes of the business that is carried on by the assessee company. The assessee company relied upon the decision of Hon ble Supreme Court in the case of Rajendra Prasad Moody 115 ITR 519(SC). Without prejudice, the assessee company submitted that despite lull in the business or no business activity, still the expenses that are necessarily to be incurred in order to maintain corporate entity are to be allowed as business expenditure The A.O. after consideri .....

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ed income taxable under various heads of income as under:- Sr No. Particulars of income Amount of income Percentage Business income 1 Interest on loan and inter-corporate deposits 19,47,437/- 2 Misc. income 3,30,741 3 Prior period income 9,49,219/- 4 Provision for expenses written back 1,26,199/- TOTAL 33,53,596/- 25.18% 1 Income from property 68,41,067/- INCOME FROM HOUSE PROPERTY 68,41,067/- 51.40% 1 Profit from sale of investment 34,356/- 2 Profit from sale of assets 1,84,851/- CAPITAL GAIN 2 .....

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able under the head capital gain. Only the interest on loan and inter-corporate deposit, miscellaneous income, prior period income and provision for expenses written back are to be taxed under the head "Business Income" which shows that the assessee company is not actively engaged in any business activity. It was also observed by the A.O. that from the assessee company s premises, WTFL (a related party) is carrying on its business and have shown gross receipts of nearly about ₹ 1 .....

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s earned gross business income of ₹ 33,53,596/- which works out to 25.18% of total receipts. The A.O. held that the assessee company has opted to claim all expenses in relation to various heads of income under the head business only which has resulted into huge and disproportionate claim of expenses under the head business. The assessee company has disallowed a sum of ₹ 1,18,422/- towards property expenses and claimed a sum of ₹ 20,05,239/- as deduction u/s 24 of the Act. Accor .....

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y the assessment orders u/s 143(3) of the Act dated 29.12.2011 passed by the A.O., the assessee company preferred an appeal before the CIT(A). 6. Before the CIT(A), the assessee company submitted that the A.O. has accepted that during the relevant year the assessee company has carried on business though the activity was not substantial and similar issue had come up in the case of the associate company of the assessee company M/s Walchand & Co. Pvt. Ltd. for the assessment year 2004-05 whereb .....

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ied upon the decision of Hon ble Apex Court in the case of S.A. Builders vs. CIT, 288 ITR 1 (SC). The assessee company further submitted that the assessee company is continuing doing the business activity and has not ceased to do business upon transfer of DC business to WTFL by referring to various judgments. The assessee company submitted that the assessee company had already disallowed ₹ 40,01,283/- and 74.82% of the same i.e. ₹ 29,93,759/- is a double disallowance. The CIT(A) afte .....

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for the purpose of business is allowable and majority of the expenses of the assessee company cannot be treated as incurred wholly and exclusively for the purpose of the business. Accordingly, the CIT(A) held that the assessment order passed u/s 143(3) of the Act by the A.O. is found to be extremely reasonable and valid and the action of the AO was confirmed by the CIT(A) vide orders dated 05.02.2013. Regarding the assessee company s contention that it has itself disallowed ₹ 40,01,283/- .....

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ess of financing is meager. The ld. Counsel reiterated the submissions as made before the authorities below which are not repeated for the sake of brevity. The ld. Counsel for the assessee company submitted that the A.O. has allowed business expenses to the extent of 25.18% based upon the proportion of the business income earned by the assessee company in comparison to the total income. The ld. Counsel for the assessee company drew our attention to the orders of the A.O. into the manner in which .....

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IN 2,19,207 1.65% 1 Dividends 9,00,919/- 2 Interest on Income tax refund 19,94,073 INCOME FROM OTHER SOURCES 28,94,992 21.75% Sr. No. Particulars Amount (Rs) Percentage 1 Total receipts 1,33,08,862/- 2 Business receipts 33,53,596/- 25.18% 3 Total expenses 1,03,87,331/- 4 Proportionate allowable business expenses 26,15,530/- 25.18% 5 Disallowance of expenses(4-3) 77,71,800/- 74.82% The ld. Counsel also drew our attention to the fact that the salary expenses during the impugned assessment year was .....

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rformed under various statutes/regulations, while they were getting ₹ 72.11 lacs in aggregate , out of which ₹ 43.06 lacs has been paid by WTF while ₹ 29.05 lacs was paid by the assessee company . The total salary paid to Directors is same as in the preceding year but due to transfer of DC-Business, the salary has been transferred to subsidiary company WTFL. Thus, the assessee company contended that these expenses should be allowed as the assessee company is still continuing th .....

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ispute by the A.O. that the business is continuing. The assessee company relied upon the decision of Hon ble Supreme Court in the case of S A Builders Limited(supra) and submitted that the ratio of the said decision is directly applicable to the case of the assessee company as the assessee company has deep interest in the subsidiary company and investments are made based on commercial expediency. Accordingly, the ld. Counsel for the assessee company prayed that the expenses should be allowed as .....

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ompany s paper book filed with the Tribunal page 112 & 113 wherein the list of the employees of the assessee company and of WTFL were given, to show that the employees are different for both the assessee company and WTFL. 11. We have considered the rival contention and also perused the material available on record. We have observed that the assessee company was earlier carrying on the business of training and financing while the business of training was transferred to the subsidiary company .....

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hich are directly relatable to income from house property and also exempt income u/s 14A of the Act. The employees have also been shifted to the new company and the salary expenses have also come down to the tune of ₹ 31.86 lacs for the year ending 31-03-2009, against ₹ 365.88 lacs for the year ending 31-3-2008. We have observed that the assessee company is a listed company and the assessee company had to perform certain corporate , regulatory , management and compliance functions un .....

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the business. It has voluntarily disallowed expenses directly relatable to the property income and exempt income u/s 14A of the Act . The AO has disallowed the expenses in proportion to various streams of income earned by the assessee company considering the expenses as common expenses. In our considered view , the expenses cannot be disallowed in the manner as was done by the AO unless the AO bring on record cogent material and evidence to substantiate that the expenses claimed by the assessee .....

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nvolved in this appeal are that the A.O. on perusal of the schedule Ó accounting policies and notes forming part of the accounts for the year ended 31-03-2009 observed that Note No. 4(D)(xix) mentioned that the premises was given for use to WTFL without charging rent for next few years. The assessee company was asked to explain as to why no rent was charged from WTFL . The assesse company submitted that WTFL is a wholly owned subsidiary company of the assessee company and the assessee com .....

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ction House at 1st Floor. The A.O. rejected the contention of the assessee company by referring to Section 22 of the Act and held that any portion of the property let out to anyone , then said property is chargeable to tax under The Income Tax Act,1961(hereinafter called "the Act") In the assessee company 's case, the assessee company has let out the premises to subsidiary company without charging any rent, therefore Section 22 of Act gets attracted in assessee company's case. .....

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company has not furnished the details of area allotted to WTFL for its business activity by stating that no ear marked area has been provided. The A.O. observed that the subsidiary company is actively engaged in business activity of providing training whereas the assessee company is not actively engaged in any business activity other than investment activity and earning miscellaneous income. The summary of the financial activity of the assessee company and the subsidiary company as per their fi .....

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w: Sr.No. Name of the company Gross income in % Salary expenses in % Total expenses % Average% 1 M/s Walchand PeopleFirst Ltd. 9.88 5.02 6.31 7.07 2 M/s Walchand TalentFirst Ltd. 90.12 94.98 93.69 92.93 Based upon the above, 7,07% of area for 4343.40 square feet works out to 307.07 square feet and 92.93% works out to 4036.33 square feet whereby the A.O. held that WTFL has occupied 4036.33 sq. ft. of Construction Building, 1st floor. The A.O. accordingly worked out the deemed rental income under .....

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by the AO u/s 143(3) of the Act, the assessee company carried the matter in appeal before the CIT(A). 15. Before the CIT(A), the assessee company submitted that it occupies first floor premises at Construction House for its business since many decades and the area occupied by the assessee company is 4343 sq.ft. where its registered office is situated. The assessee company submitted that WTFL was not provided with any earmarked area within the office premises occupied by the assessee company, but .....

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this vital and fundamental difference between letting of premises per-se and sharing of common office facilities by two or more persons. The assessee company further submitted that the AO also erred in taking the average rent received by the assessee company from other premises in the same building without appreciating that those premises were let out to the concerned parties enjoying exclusive possession. It was submitted that assessment of notional rent of ₹ 50,10,563/- u/s 22 of the Ac .....

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edly has not been earned by a taxpayer, on the ground that the taxpayer could have, although in fact it has not, earned such income. The assessee company relied on the decision of Hon ble Supreme Court in the cases of CIT v. A Raman & Co. [1968) 67 ITR 11 and CIT v. Calcutta Discount Co. Ltd. [1973) 91 ITR 8. The assessee company particularly referred to the decision of Hon ble Supreme Court in the case of A. Raman & Co. (supra) wherein it has been held that "but the law does not ob .....

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the assessee company has not let out the property to its wholly own subsidiary company but has allowed its premises to be used by the subsidiary company. When the property has not been let out, the question of notional rent, does not arise. Further, the assessee company should have charged certain amount for allowing its infrastructure to be used by the subsidiary company as both the companies are separate and distinct entities. But as the assessee company has not charged any amount from its sub .....

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visions empowering him to do so, like as per section 40A(2) of the Act relating to claim of expenditure to the related parties or non-arm s length international transaction etc. The CIT(A) accordingly held the A.O. s action to estimate the notional rent as invalid and deleted the additions of ₹ 50,10,563/- made by the CIT(A) vide orders dated 05.02.2013. 16. Aggrieved by the orders dated 05.02.2013 of the CIT(A), the Revenue is in appeal before the Tribunal. 17. The ld. D.R. submitted that .....

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The assessee company has transferred its training business to the said subsidiary company WTFL and major portion of the office is being used by the said subsidiary company and the employees were also shifted (as per details of which are placed in paper book page No. 112 & 113). The Ld. DR also submitted that the A.O. has rightly brought to tax the annual letting value of the said property. The Ld. DR submitted that the AO has calculated rent based on the prevailing rental in the same buildin .....

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assessee company reiterated its submissions as made before the authorities below which are not repeated for the sake of brevity. 19. We have heard the rival contentions and also perused the material available on record. We have observed that the assessee company was carrying on the business of financing during the impugned assessment year, apart from having income from house property, dividend income, income from sale of investment and miscellaneous income. The assessee company has transferred i .....

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e said subsidiary company. Section 22 & 23 of the Act stipulates that the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to be let from year to year. Thus section 22 and 23 of the Act warrants that the income from house property under the head income from house property which shall be the annual letting value from year to year for any part of the property which is let , then sum for which the property might reasonably be expecte .....

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le at the same time the premises is allowed to be used by the subsidiary company only without granting any benefits of tenancy such as right of possession and enjoyment of the property as tenant . No tenancy rights has been created in favour of the subsidiary company, the addition of ₹ 50,10,563/- being notional rent on account of allowing subsidiary company to use its office space added in the manner by the ld. AO cannot be sustained in the hands of the assessee company which is ordered t .....

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y Pvt. Ltd. 4,343.40 01/04/2008 to 31/03/2009 17,725/- 2 M/s Walchand & Company Pvt. Ltd. 4,343.40 01/04/2008 to 31/03/2009 17,725/- 3 M/s Walchand & Company Pvt. Ltd. 3,690.00 01/04/2008 to 31/03/2009 15,055/- TOTAL 50,505/- It was also seen by the A.O. that the related party of the assessee company i.e. Walchand & Company Pvt. Ltd. has further let out these premises on exorbitant rent to third parties, the details of which are as under:- Sr.No. Name of the party Area in sq. ft. Per .....

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,22,510/-. Similarly, the assessee company has received rent from M/s Walchand & Company Pvt. Ltd. of ₹ 15,055/- and the said premises was let out by M/s Walchand & Company Pvt. Ltd. to M/s Khaitan and Co. and received rent of ₹ 64,18,755/-. The assessee company was asked to furnish the copies of rent agreement entered into with M/s Walchand & Company Pvt. Ltd. In response, the assessee company submitted the details in Tapal. The A.O. observed that the assessee company ha .....

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he assessee company submitted that income from house property can be charged to tax in the hands of the owner and once the annual value of house property has been assessed in the hands of one taxpayer as the owner, the same cannot be assessed in the hands of another taxpayer again as the owner because there cannot be two owners in respect of the same property at the same time , otherwise it would amount to assessment of the same income twice, which is not permissible in law. The assessee company .....

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ble Apex Court has held that the "owner" for the purpose of Section 22 of the Act is the persons who is the beneficial owner of the property, who earns the income from the house property in his own right. The assessee company refers to clause 2(d) of the Agreement to Lease executed with M/s Walchand & Co. Pvt. Ltd. which reads as under:- "(d) The Lessee shall have the right and shall be entitled to further sublet, or give on leave and licence basis or on such other basis as t .....

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erty leased to them and the rental income earned by M/s Walchand & Co. Private Limited from these premises was offered to tax by them under the head income from house property which is assessed accordingly by the Revenue consistently year after year, hence, the rent received by the assessee company from M/s Walchand & Co. Pvt. Ltd. aggregating to ₹ 50,505/- should be assessed u/s 56 of the Act as income from other sources and Section 56 of the Act stipulate charging of actual incom .....

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for which the property might reasonably be expected to let from year to year. b. Where the property or any part of the property is let out and the actual rent received or receivable by the owner in respect thereof is in excess of sum referred to in Clause(a), the amount so received or receivable shall be the Annual Value for the purpose of determination of income from House Property. The AO held that the word used in Section 23 of the Act is the property might reasonably be expected to let from .....

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pany itself has offered rental income of ₹ 50,505/- earned from Walchand & Co. Pvt. Ltd. under the head income from house property . As the assessee company is the owner of the Construction House and entitled to receive rent on its own right, income from letting out the same is taxable under the head income from house property as provided u/s.22 of Act. It may be noted that the assessee company has placed reliance on Podar Cement Ltd.(supra) that rental income may be taxed under the he .....

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of the premises and is entitled to receive income from property in its own right. The A.O. relied upon the decision of The Hon'ble Bombay High Court in the case of Pallonji M. Mistry v. CIT (2009) 178taxmann 341(Bom.) whereby it was held that owner is a person who is entitled to receive income from the property in his own right and in view of the above legal position the rental income earned from the letting out of the Construction House to M/s Walchand and Company Private Limited is taxed u .....

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same is brought to tax as the amount of ₹ 1,54,41,265/- is adopted as market rent of the premises let out to related party M/s Walchand and Company Private Limited without renewal of agreements , vide assessment orders passed u/s 143(3) of the Act dated 29.12.2011. 22. Aggrieved by the assessment orders dated 29.12.2011 passed by the AO u/s 143(3) of the Act, the assessee company has preferred an appeal before the CIT(A). 23. Before the CIT(A) , the assessee company submitted that M/s Wal .....

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remises has been taxed , then taxing the very same amount once again in the hands of the owner would amount to taxing an income twice which is not permissible in law. The assessee company also relied upon the decision of Hon ble jurisdictional High Court in the case of CIT v. Akshay Textiles & Agencies P. Ltd. (2008) 304 ITR 401(Bom.) wherein the Hon ble Court held that in the absence of any cogent evidence to show that transaction was not genuine, the amount received by an intermediary cann .....

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its hands in the past without any doubt or question by the Revenue. The CIT(A) after considering the submission of the assessee company and the A.O. held that assessee company s contention that it is a case of taxing the same income in the hand of the assessee company and also in the hands of M/s Walchand & Co. Pvt. Ltd. and the same income cannot be taxed twice is found to be valid. Accordingly the CIT(A) directed the A.O. to delete the income taxed for the second time in the hands of the .....

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ghtly brought to tax in the hands of the assessee company, the same rental value as sub-let by M/s Walchand and Company Private Limited as the same represented the market rental value of the said premise s which need to be brought to tax in the hands of the assessee company as per provisions of Section 22 and 23 of the Act. Whereas the ld. Counsel for the assessee company submitted that this building was constructed in the year 1930 by the Walchand Group. It is six storey building. Portion of th .....

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onths . This lease agreement had expired on 11-09-2006 and a letter was issued by the assessee company on 15-01-2009 agreeing to renew the lease for a further period of 11 years and 11 months in response to letter of the lessee dated 05-01-2009 that the renewal shall be executed in due course. The ld. Counsel also submitted that portion of the fourth floor area was also leased to Vikhroli Metal Fabricators Ltd. vide agreement dated 12-10-1994 for a period of 11 years and 11 months and subsequent .....

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per agreement which is not a sham transaction as the AO has not doubted the genuineness of the lease agreements with Walchand and Company Private Limited. The ld. Counsel submitted that the Revenue has treated the lessee as owner of the property and the assessed the rental income in the hands of the lessee as income from house property and again charged to tax the income as income from house property in the hands of the assessee company as owner of the property which is not permissible in law. .....

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operty . The ld. Counsel submitted that the CIT(A) has rightly deleted the addition by relying upon the decision of Hon ble jurisdictional High Court in the cases of M/s Sahney Kirkwood Private Limited & Akshay Textiles & Agencies P. Ltd. (supra) 26. We have considered the rival contention and also perused the material on record. We have observed that the assessee company has given on rent the property Construction House 4th floor to M/s Walchand & Co. Pvt. Ltd. whereby the total ren .....

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letter dated 15- 01-2009 in response to the lessee letter dated 05-01-2009. M/s Walchand & Co. Pvt. Ltd. has duly paid the tax on the actual rent of ₹ 1,54,41,265/- received under the head income from house property for which necessary supporting material was brought on record (paper book page 74 to 84) and the same has been accepted by the Revenue in the case of Walchand & Company Private Limited and accordingly framed the assessment order u/s 143(3) of the Act, further income tax .....

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x under the head income from house property in the return of income filed with the Revenue. 27. Section 27(iii)(b) of the Act reads as under:- Owner of house property", "annual charge", etc., defined. Section 27 For the purposes of sections 22 to 26- (iiib) a person who acquires any rights (excluding any rights by way of a lease from month to month or for a period not exceeding one year) in or with respect to any building or part thereof, by virtue of any such transaction as is re .....

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in sub-clause (i) of clause (d), means transfer of such property by way of sale or exchange or lease for a term of not less than twelve years, and includes allowing the possession of such property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882). Explanation: For the purposes of this sub-clause, a lease which provides for the extension of the term thereof by a further term or terms shall be deeme .....

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A of the Transfer of Property Act, 1882 and shall be deemed to be the owner of the property u/s 27(iii)(b) of the Act for the purposes of computing under the head Income from House Property . We have observed that the assessee company has been granted lease w.e.f. 12th October, 1994 for a period of 11 years 11 months, however, it is stipulated in the agreement that the lessee is occupying the same since last several years. Further the right of sub-letting has also been provided to the lessee. Th .....

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