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TMI Blog2013 (6) TMI 781X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of CIT Vs. P. Mariappa Gounder, 147 ITR 676, holding the same to be revenue in nature. 3. The facts in brief are that during the year under consideration the assessee company received mense profit for unauthorised occupation ITA No.8185/2011 of the premises (Novelty Chambers) from Central Bank of India who was in possession of the rented premise in the Novelty Chambers. The tenancy of Central Bank of India ended on 1.6.2000. As per the order of the Supreme Court vide SLP 19635 of 2002 in which the court directed the Bank to hand over the possession to the assessee company by 30/06/2003 due to which the Bank gave possession to the assessee company of Novelty Chambers on 30/09/2003. Hence a suit was filed by the assessee company ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a capitol receipt exempt from Income-tax. The appeal of the Central Bank of India vide its appeal number 1744 of 2007 is still pending for adjudication. 4. Assessee preferred appeal before the CIT(A). Detailed written submissions were filed before him. It was submitted that mesne profit received for unauthorized occupation of the premises is a capital receipt not chargeable to tax in the light of the decision of Special Bench of the Tribunal in the case of Narang Overseas Pvt. Ltd. Vs. ACIT, reported in 100 ITD (Mum)(SB). Further reliance was placed on the decision in the case of CIT Vs. Mrs. Annamma Alexander, 191 ITR 551 (Ker.). Regarding the decision of the Hon'ble Madras High Court relied upon by the learned AO, it was submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... considered the facts. It is seen that the AO has relied in the case of P. Mariappa Gounder 147 ITD 676 (Mad) which has been affirmed by the Supreme Court in 232 ITR 2 (SC) wherein the issue was the year of taxability of the msene profit. Wherein as per the order of Supreme Court, the trial Court has determine the amount of mesne portit payable to the appellant and the trial court has determined the liability and passed an order on December 22, 1962. Therefore, it was held that the amount was ascertained on 22.12.1962. Hence, it was liable to be charge on the basis of mercantile system of accounting in the AY. 1963-64. It is further seen that the Appellant has contested that the issue whether the mesne profit was capital or revenue was not t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not chargeable to tax. 6. After going through the order of AO and the above findings of the learned CIT(A), we noted that the AO decided the issue against the assessee following the decision of the Hon'ble Madras High Court in the case of P. Mariappa Gounder (supra). This decision of the Hon'ble Madras High Court and the decision of the Hon'ble Supreme Court confirming the order of Hon'ble Madras High Court has been considered by the Special Bench and found that the facts are different. It is further seen that the decision of the Special Bench has been confirmed by the Hon'ble Bombay High Court vide order dated 25-6- 2009. All these facts have been considered by the learned CIT(A), which remained uncontroverted. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is reflected in the profit and loss account, hence, it is rightly taxable for computing book profit, hence, on principle, the findings of the AO were upheld. However, since the mesne profit is held to be capital in nature, hence, not chargeable to tax, then it ITA No.8185/2011 becomes consequential in nature. Therefore, the income computed under Section 115JB was also deleted by the learned CIT(A). 10. Learned DR placed reliance on the order of AO. On the other hand, learned counsel of the assessee stated that the findings of the learned CIT(A) recorded in para 5.1 are partly incorrect. It was stated that it is incorrect to note at the end of the learned CIT(A) that since the mesne profit is reflected in profit and loss account, hence, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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