TMI Blog2018 (5) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. Consistency is also one of the recognised rule of tax proceedings like the principle of res judicata. Secondly, the AO while assessing the income of the group concerns in the hands of the assessee had not given discount for maintenance charges. The FAA has rightly pointed out the maintenance charges have to considered as per the established principles of accountancy. AO's of the group entities have not doubted about their existence or genuineness of the income shown by them in their returns of income. Considering these facts cumulatively, we hold that the order of the FAA does not suffer from any legal or factual infirmity. - Decided against revenue - I.T.A./3071/Mum/2016 - - - Dated:- 2-5-2018 - Sh. Rajendra, Accountant Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were declared against the backdrop of higher rental incomes by the group companies, that substantial expenditure had been debited under various heads by those entities, that using a colourable device the assessee had avoided payment of higher taxes, that none of the four companies had declared the lease income under the head income from house property, that they had shown the income under the head business income. He referred to the case of TIP Top Typography (368 ITR 330) of the Hon ble Bombay High Court and assessed the annual value of the property rights including rent received by all the four tenants apart from the three protected tenants. 3. Aggrieved by the order of the AO, the assessee preferred an appeal before the First Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing charts showing particulars of assessment proceedings in the case of the assessee as well as the tenant-companies along with the acknowledgements of the returns of income, that computations of income, the balance sheets and the profit and loss account for the year under consideration for the assessee and the four of the entities. He held that there had been transparency and no selective furnishing of information by the appellant for the four tenant-companies, that AO was not justified in holding that there had been selective return of income by the group companies. Referring to the case of TIP Top Typography (supra), he held that the reliance placed by the AO on the judgment was misplaced, that the ratio of the decision was that annual l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Act for some years, that the AO has accepted the income returned by the assessee in the earlier years, that the AO had not made any addition on account of the rental income received by the group companies. We are aware that principles of res judicata do not apply to the income tax proceedings. But, the AO. s are required to explain as to why they were compelled to deviate from the path followed by their predecessor, if they want to take a new course of action for assessing the same income. Without bringing the distinguishing features that justifies taxing a particular item/head of the income or changing the heads of income in the subsequent years, as compared with the earlier year, the AO. s cannot question the income shown by the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t which the property may be reasonably let out by a willing lessor to a willing lessee uninfluenced by any extraneous circumstances ; (ii) an inflated or deflated rent based on extraneous considerations may take it out of the bounds of reasonableness ; (iii) the actual rent received, in normal circumstances, would be a reliable evidence unless the rent is inflated or deflated by reason of extraneous considerations ; (iv) such annual letting value, however, cannot exceed the standard rent as per the rent control legislation applicable to the property ; (v) if the standard rent has not been fixed by the Rent Controller, then it is the duty of the Assessing Officer to determine the standard rent as per the provisions of rent control enactment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rial in his possession which will indicate that the parties have concealed the real position. He must not make a guess work or act on conjectures and surmises. There must be definite and positive material to indicate that the parties have suppressed the prevailing rate. Then the enquiries that the Assessing Officer can make, would be for ascertaining the going rate. He can make a comparative study and an analysis. In that regard, transactions of identical or similar nature can be ascertained by obtaining the requisite details. However, there also the Assessing Officer must safeguard against adopting the rates stated therein straightaway. He must find out whether the property which has been let out or given on leave and licence basis is of a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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