TMI Blog2022 (4) TMI 501X X X X Extracts X X X X X X X X Extracts X X X X ..... the decision of Hon ble Jurisdictional High Court in Tip Top Typography (supra). Accordingly, ground nos.1 to 4 raised in assessee s appeal are allowed for statistical purpose. - ITA No. 4449/Mum./2018 - - - Dated:- 8-4-2022 - Shri Amarjit Singh, Accountant Member And Shri Sandeep Singh Karhail, Judicial Member For the Assessee : Shri Yogesh Thar, a/w Shri Chaitanya D. Joshi And Ms. Ketki Mittal For the Revenue : Shri T. Shankar, Sr. A.R. CIT ORDER PER SANDEEP SINGH KARHAIL, J.M. The present appeal has been filed by the assessee against the order dated 13 June 2018 passed by the Commissioner of Income Tax (Appeals)-9, Mumbai ( CIT(A) ) for the assessment year 2014 15. 2. The appeal is listed before us pursuant to order dated 16 August 2021 passed under section 254(2) of the Act in MA No. 16/MUM/2021, whereby the Co-ordinate Bench of Tribunal recalled its earlier order dated 22 July 2020 passed under section 254(1) of the Act and restored the appeal to its original position for fresh hearing. 3. In this appeal, the assessee has raised following grounds: 1) The Learned CIT(A) has erred in retaining and confirming the addition of ₹ 17 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rces . The assessee had also given her residential flat on rental basis to Asit C. Mehta Investment Intermediate Ltd for annual rent of ₹ 9 lakhs on and from 1 April 2012. After deducting 30% standard deduction, the balance income of ₹ 6,30,000 was declared as Income from House Property . The assessee also received interest free deposits from the licensees amounting to ₹ 2.70 crores. The Assessing Officer vide order dated 8 November 2016 passed under section 143(3) of the Act, following the approach adopted in assessment year 2012 13 which was upheld by CIT(A), added 10% of security deposit received by assessee under the head Income from Other Sources . 6. The CIT(A) vide impugned order dated 13 June 2018, following the decision of Co-ordinate Bench of Tribunal in assessee s own case for assessment year 2012 13, added amount equal to 9% of security deposit as additional Annual Letting Value under the head Income from House Property . The CIT(A) further allowed deduction under section 24(a) of the Act at 30% and made net addition under the head Income from House Property of RS.17,01,000. Being aggrieved the assessee is in appeal before us. 7. During the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment year 2012 13, the Co-ordinate Bench of Tribunal in ITA No. 3549/MUM/2016 vide order dated 9 February 2018 dismissed the appeal following the decision of Hon ble Punjab and Haryana High Court in CIT v/s K. Streetlite Electric Corporation (2011) 336 ITR 348 and held that security deposit was to circumvent real rent and same shall fall within the ambit of Income from House Property . Though, the Co-ordinate Bench of Tribunal passed its order for assessment year 2012 13 on 9 February 2018, however, the decision dated 8 August 2014 passed by Hon ble Jurisdictional High Court in Tip Top Typography (supra) was not brought to its attention. In Tip Top Typography (supra), substantial questions of law, which arose for consideration before the Hon ble Jurisdictional High Court, are as under: (i) Whether on the facts and circumstances of the case and in law, Tribunal was right in holding that the fair rental value specified in section 23(1)(a) is the municipal value or actual rent received whichever is higher and not the annual letting value on the basis of comparable instances as adopted by the Assessing Officer, though the property under consideration was not covered by Rent Cont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... applied or whether a departure therefrom can be made, for example, because of the area, the measurement, the location, the use to which the property has been put, the access thereto and the special advantages or benefits. It is possible that in a high rise building because of special advantages and benefits an office or a block on the upper floor may fetch higher returns or vice versa. Therefore, there is no magic formula and everything depends upon the facts and circumstances in each case. However, we emphasize that before the Assessing Officer determines the rate by the above exercise or similar permissible process he is bound to disclose the material in his possession to the parties. He must not proceed to rely upon the material in his possession and disbelieve the parties. The satisfaction of the Assessing Officer that the bargain reveals an inflated or deflated rate based on fraud, emergency, relationship and other considerations makes it unreasonable must precede the undertaking of the above exercise. After the above ascertainment is done by the Officer he must, then, comply with the principles of fairness and justice and make the disclosure to the Assessee so as to obtain hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of the transaction. The Assessing Officer ought to be aware of several aspects and matters involved in such transactions. It is not necessary that if the license is for three years that it will operative and continuing till the end. There are terms and conditions on which the leave and license agreement is executed by parties. These terms and conditions are willingly accepted. They enable the license to be determined even before the stated period expires. Equally, the licensee can opt out of the deal. A leave and license does not create any interest in the property. Therefore, it is not as if the security deposit being made, it will be necessarily refundable after the third year and not otherwise. Everything depends upon the facts and circumstances in each case and the nature of the deal or transaction. These are not matters which abide by any fixed formula and which can be universally applied. Today, it may be commercially unviable to enter into a lease and, therefore, this mode of inducting a 'third party' in the premises is adopted. This may not be the trend tomorrow, therefore, we do not wish to conclude the matter by evolving any rigid test. 52] We have also not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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