Itxa/578/2012 Of The Commissioner Of Income Tax -19 v. Shailaja S. Hemdev

sas IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTIONINCOME TAX APPEAL NO.576 OF 2012ANDINCOME TAX APPEAL NO.578 OF 2012 The Commissioner of Income Tax-19, Mumbai ..Appellant. V/s. Shailaja S. Hemdev ..Respondent. Mr.Abhay Ahuja for the appellant. Mr.J.D. Mistri, Senior Advocate i/b. Mr.A.K.Jasani for the respondent. CORAM : S.C.DHARMADHIKARI AND A.K. MENON, JJ. DATED : 4TH SEPTEMBER, 2014 P.C. :- 1.Both these appeals purport to raise the same question and styled as a substantial question of law. That is formulated by the Revenue at page 7 of the paper-book in Income Tax Appeal No.578 of 2012. The question reads as under:- “ Whether on the facts and in the circumstances of the case and in law the Income Tax Appellate Tribunal was justified in upholding the order of the CIT(A) holding that the notional interest income free security deposit and advance rent cannot be included in the income from property for the purpose of section 23(1)(a) of the Income Tax Act, 1961 ? ” 2.When these matters were placed before us earlier and both the parties had requested that since we were to render a judgment in a batch of appeals raising identical issue, that it was decided to await the same. Now that decision has been rendered, but the present appeals are placed for directions as Mr.Mistri, learned senior counsel for the assessee submitted that the question of law which has been reproduced by us above and formulated in the paper-book of the revenue is not accurate and correct. 3.The question of law ought to be in the context of section 23(1)(b) of the Income Tax Act, 1961 [the I.T. Act]. In that regard, Mr.Mistri has taken us through the paper-book in Income Tax Appeal No.578 of 2012. He first points out the order of the assessing officer on the relevant issue in question. He then also invites our attention to the finding of the Commissioner and the Tribunal to urge that the issue was, whether interest free security deposit, as it was refundable, could have been taken into consideration for computation of annual letting value. Meaning thereby, the assessing officer's view that such deposit is collected, the amount invested and it would earn interest and, therefore, such notional interest could be taken into consideration for the above computation is correct or not. 4.Placing reliance upon the Division Bench of this Court in the case of Commissioner of Income Tax V/s. J.K. Investors (Bombay) Ltd. reported in [2001] 248 ITR 723, which has been stated to be confirmed by the Hon'ble Supreme Court, Mr.Mistry urged that the appeals do not raise any substantial question of law. 5.On the other hand, Mr.Abhay Ahuja, learned counsel appearing for the Revenue submits that the Tribunal has referred to both the sections 23(1)(a) and 23(1)(b) of the I.T. Act. It also relied upon the judgment of the Full Bench of the Delhi High Court in the case of Commissioner of Income Tax V/s. Moni Kumar Subba reported in [2011] 333 ITR 38 (Del). Mr.Ahuja, therefore, submits that the reference to sub-clause (a) of section (1) of section 23 of the I.T. Act is correct. 6.Without entering into this controversy but finding that the notional interest on such security deposits cannot be taken into consideration for determining and computing the annual letting value, we answer this question as framed, against the revenue and in favour of the assessee and for that we rely not only on the Division Bench judgment in the case of J.K.Investors (Bombay) Ltd. (supra) but the judgment delivered by this Court, to which one of us [S.C.Dharmadhikari, J.] was a party in the case of Commissioner of Income Tax-12, Mumbai V/s. Tip Top Typography [Income Tax Appeal No.1213 of 2011] and other connected appeals pronounced on 8[th ]August, 2014. 8.In the result, the appeals do not raise any substantial question of law and are accordingly dismissed. No costs. (A.K. MENON, J.) (S.C.DHARMADHIKARI, J.)