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TMI Blog2020 (8) TMI 812X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee was allowed specifically in the circumstances when the assessment order was passed u/s 143(3) of the Act. CIT(A) has examined number of aspects of the cases and by going through all the facts and circumstances, we are of the view that the CIT(A) has decided the matter of controversy judiciously and correctly which is not liable to be interfere with at this appellate stage. Decided in favour of the assessee against the revenue. - I.T.A. No.4382/Mum/2017 - - - Dated:- 25-8-2020 - Shri Shamim Yahya, AM And Shri Amarjit Singh, JM For the Assessee : Shri Vipul Joshi / Shubham Rathi For the Revenue : Shri V. Justin (DR) ORDER PER AMARJIT SINGH, JM: The revenue has filed the present appeal against the order dated 20.03.2017 passed by the Commissioner of Income Tax (Appeals) -9, Mumbai [hereinafter referred to as the CIT(A) ] relevant to the A.Y.2012-13. 2. The revenue has raised the following grounds: - I. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the AO to delete the addition made of ₹ 3,38,00,000/- towards payment made to Mumbai Port Trust claimed by assessee u/s 23 of the I. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... inst the Income from House Property earned by the Appellant. In this regard, the argument of the Appellant is four fold. Firstly, it is argued that tinder the Income Tax Act only the real income could be brought to tax. In the present case since Income from is taxed on the basis of rent actually received / receivable which of ground rent to BPT, it is argued that on the basis rent to BPT, it is argued that on the basis of real income theory the income is not liable to be read since there is no actual receipt of rent and on the contrary there is a loss. Secondly, it is argued that the deduction in respect of ground rent to BPT is allowable as the same is akin to certain expenses which have to be incurred in order to ensure that the rent income is regularly received. According to the Appellant such expenses are allowable even if not specifically provided under the Act. In this regard the Appellant has relied on various judgements wherein expenses like society maintenance charges, brokerage charges, security charges, etc. have been allowed as a deduction from the Income from House property though they have not been specifically provided under the Act. Thirdly and lastly, it is argu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proviso that taxes paid to a local authority and allowable as deduction. Further as per section 27(vi), the amounts eligible for deduction also includes payments in the nature of service taxes levied by the Authority. As such the deduction is to be allowed to the assessee if the amounts paid are in the nature of services taxes and the same are actually paid during the year to a local authority. At this juncture, it is useful to refer the judgement of the Hon ble Bombay High Court in the case of C1T vs. M.G. Chitnavis (1957)32 1TR 520 (Bombay). In that case, it was held that amounts paid in respect of water rates and conservancy tax to Nagpur Municipal Corporation was allowable as a deduction from the Income from House Property. In that case, the term taxes in respect of the property was broadly viewed so as to even include water rates and conservancy taxes. These items were treated as akin to taxes since the same were amounts collected in lieu of services rendered by the Corporation. Drawing an analogy from the said ruling, it has to be held that for the purpose of allowing the use of re of ground rent charged to be held as service taxes in respect of the property. As regards ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has been granted deduction in respect of ground rent and the same has been allowed year after year to Appellant even under scrutiny assessments by the AO himself. The Hon'ble Apex Court in the case of Radhasoami Satsang vs. CIT (1992) 193 ITR 321 (SC) observed as follows: 76. We are aware of the fact that strictly speaking res-judicata does not apply to income tax proceedings. Again, each assessment year being a unit, what is decided in one year may not apply in the following year but where a fundamental aspect permeating through the different assessment years has been found as a fact one way or the other and parties have allowed that position to be sustained by not challenging the order, it would not be at all appropriate to allow the position to be changed in a subsequent year As such, even on the Principle of Consistency the deduction has to be allowed to the Appellant and is accordingly allowed. As regards the allowance of interest of ₹ 430,751/- the AO has considered the same as having been paid to BPT as interest on arrears, etc. However, the Appellant has stated that the same was in respect of loans taken for payments made to 8FF. According to the Appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umerate the circumstances which have led to delay in pronouncement of this order. The hearing of the matter was concluded on 07/02/2020 and in terms of Rule 34(5) of Income Tax (Appellate Tribunal) Rules, 1963, the matter was required to be pronounced within a total period of 90 days. As per sub-clause (c) of Rule 34(5), every endeavor was to be made to pronounce the order within 60 days after conclusion of hearing. However, where it is not practicable to do so on the ground of exceptional and extraordinary circumstances, the bench could fix a future date of pronouncement of the order which shall not ordinarily be a day beyond a further period of 30 days. Thus, a period of 60 days has been provided under the extant rule for pronouncement of the order. This period could be extended by the bench on the ground of exceptional and extraordinary circumstances. However, the extended period shall not ordinarily exceed a period of 30 days. 6.2 Although the order was well drafted as well as approved before the expiry of 90 days, however, unfortunately, on 24/03/2020, a nationwide lockdown was imposed by the Government of India in view of adverse circumstances created by pandemic covid-19 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... te clearly, ordinarily the order on an appeal should be pronounced by the bench within no more than 90 days from the date of concluding the hearing. It is, however, important to note that the expression ordinarily has been used in the said rule itself. This rule was inserted as a result of directions of Hon ble jurisdictional High Court in the case of Shivsagar Veg Restaurant Vs ACIT [(2009) 317 ITR 433 (Bom)] wherein Their Lordships had, inter alia, directed that We, therefore, direct the President of the Appellate Tribunal to frame and lay down the guidelines in the similar lines as are laid down by the Apex Court in the case of Anil Rai (supra) and to issue appropriate administrative directions to all the benches of the Tribunal in that behalf. We hope and trust that suitable guidelines shall be framed and issued by the President of the Appellate Tribunal within shortest reasonable time and followed strictly by all the Benches of the Tribunal. In the meanwhile(emphasis, by underlining, supplied by us now), all the revisional and appellate authorities under the Income-tax Act are directed to decide matters heard by them within a period of three months from the date case is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dented situation not only in India but all over the world. Government of India has, vide notification dated 19th February 2020, taken the stand that, the coronavirus should be considered a case of natural calamity and FMC (i.e. force majeure clause) maybe invoked, wherever considered appropriate, following the due procedure . The term force majeure has been defined in Black s Law Dictionary, as an event or effect that can be neither anticipated nor controlled When such is the position, and it is officially so notified by the Government of India and the Covid-19 epidemic has been notified as a disaster under the National Disaster Management Act, 2005, and also in the light of the discussions above, the period during which lockdown was in force can be anything but an ordinary period. 10. In the light of the above discussions, we are of the considered view that rather than taking a pedantic view of the rule requiring pronouncement of orders within 90 days, disregarding the important fact that the entire country was in lockdown, we should compute the period of 90 days by excludingat least the period during which the lockdown was in force. We must factor ground realities in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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