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TMI Blog2012 (8) TMI 582X X X X Extracts X X X X X X X X Extracts X X X X ..... holder and beneficial shareholder - It is not in dispute that the assessee company is not holding any share in the company who provided advances i.e. neither the assessee company is a registered share holder nor beneficial share holder in the said company the provisions of section 2(22)(e) are not applicable - inclined to uphold the findings of the ld. CIT (A) in deleting the addition made by the A.O - against revenue. - ITA 4330 to 4334 & 4309 /M/2011 - - - Dated:- 16-6-2012 - SHRI DINESH KUMAR AGARWAL AND SHRI RAJENDRA JJ. Revenue by : Shri A.C. Tejpal Assessee by : Shri R. Muralidhar O R D E R PER BENCH. All these appeals preferred by the Revenue are directed against the separate order dated 29-3-2011 in the case of Oberoi Construction Pvt. Ltd. for A.Y. 2007-08 and separate orders dated 22-3-2011 in the case of Oberoi Realty Ltd. for assessment years 2002-03, 2003-04, 2004-05, 2005-06 2006-07 passed by the ld. CIT (A) - 40, Mumbai. Since facts are identical and issues involved are common, all these appeals are disposed of by this common order for the sake of convenience. ITA No. 4330/Mum/2011 (A.Y. 2007-08) 2. Briefly stated facts of the case ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... period of 3 months at the rate of Rs. 10,83,333/- per month. The extension of license period was made following the specific request of the tenant. The total area of the flat given on lease was admeasuring approx. 3,500 sq. ft. with use of the terrace and swimming pool. As per the agreement, the assessee has received a refundable security deposit amounting to Rs. 3,50,00,000/. He further observed that the assessee had taken security deposit against the said premises to ensure that tenant will vacate the premises after the expiry of the lease period, proper payment of rent on due date, tenant will not misuse the property and tenant will not damage the premises or make any unauthorised alteration. He further observed that the security deposit is refundable upon vacation of the property by the tenant. Accordingly the assessee received a rental income of Rs. 31,66,667/- for the 12 months and offered the same for tax under the head income from House Property . He further observed that the rateable value as per the Mumbai Municipal Corporation (MMC) is Rs. 1,58,372/- whereas the assessee has earned rent of Rs. 31,66,667/- for 12 months which is much higher than the Municipal valuatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tribunal after considering the provisions of section 23 and the decision of the Tribunal in the case of Reclamation Realty India Pvt. Ltd. (supra) wherein it has been held that we find that the Bombay High Court which is the jurisdictional High Court has held that the rateable value under the Municipal law has to be adopted as annual value u/s. 23(a) of the Act , has held that the A.O. has grossly erred by calculating the annual let out value by estimating the market value of the property at Rs. 7 crores and at the same time ignoring the fact that the Municipal Rateable Value given by the Government Authority i.e Mumbai Municipal Corporation at Rs. 1,55,310/-, is much lower than the actual rent received by the assessee and accordingly upheld the order passed by the ld. CIT(A) in deleting the addition made by the A.O. Similar view has been taken by the Tribunal in other cases cited supra. 11. In the absence of any contrary material or distinguishing feature brought on record by the Revenue, we respectfully following the consistent view of the Tribunal, hold that the A.O. was not justified in taking the gross ALV at Rs. 1,20,00,000/- under the head income from house property and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd advance. Thus according to the A.O. all the conditions in respect of treating the monies advanced by M/s NDCPL to the assessee as deemed dividends as per the provisions of section 2(22)(e) were satisfied. On being asked, it was inter alia submitted by the assessee that the amount received by KPPL were not withdrawn/appropriated by the share holders of the company for personal benefits or interest, therefore, the present case falls beyond the clutches of section 2(22)(e) of the Act. However, the A.O. did not accept the assessee s explanation. According to the A.O. Mr. Vikas Oberoi is beneficial share holder of KPPL which has received advance in the garb of share application money of Rs. 74,06,226/- from NDCPL of which Mr. Vikas Oberoi is a beneficial share holder and hence the provisions of section 2(22)(e) are applicable and accordingly he made an addition of Rs. 74,06,226/- to the total income of the assessee. 14. On appeal the ld. CIT(A) while relying on the decision of Hon ble jurisdictional High Court in CIT vs. Universal Medicare Private Limited (2010) 324 ITR 264 (Bom) held that the appellant company is not holding any shares in NDCPL, hence, the addition cannot be made ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessing Officer. Respectfully following the above decisions, we hold that the provisions of section 2(22)(e) are not applicable to the case of the assessee and accordingly we are inclined to uphold the findings of the ld. CIT(A) in deleting the addition made by the A.O. The grounds taken by the Revenue are, therefore, rejected. 20. Common grounds of appeal No. c , d e taken from ITA No. 4331/M/2011 for A.Y. 2002-03 except difference in figures read as under:- c. On the facts and circumstances of the case and in law, the CIT(A) failed to appreciate that the Annual Value as offered by the assessee was grossly understated and the A.O. was justified in determining Fair Market Value in terms of Sec. 23(1)(a) by re-computing annual letting value of the property of the basis of circumstantial evidences. d. On the facts and circumstances of the case the Ld. CIT(A) erred in deleting the addition made at Rs. 19,44,793/- being notional annual letting value, which could form a part of Annual Letting Value of the property , in terms sec. 23(1)(a) of the I.T. Act, 1961. e. Whether on the facts and circumstances of the case the Ld. CIT(A) erred in holding that the rateable va ..... X X X X Extracts X X X X X X X X Extracts X X X X
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