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TMI Blog2024 (8) TMI 340X X X X Extracts X X X X X X X X Extracts X X X X ..... 2011 (3) TMI 497 - DELHI HIGH COURT] to submit that the rateable value is not binding on the AO if the rateable value as per Municipal record does not represent the correct fair rent. The learned Assessing Officer may consider the same and after giving an opportunity to the assessee decide the issue afresh. Accordingly, ground no.1 of the appeal is allowed with the above direction. Expenses provided at the end of the year which were reversed at the beginning of the year and no tax is deducted thereon at the time of making provision - HELD THAT:- As the payer and the payee are identified, the nature of services is also ascertained and the amount of liability is also determined, there is no reason why the tax should not have been deducted thereon. Only in those circumstances provisions of Section 40a(ia) of the Act applies. However, it is apparent that if the assessee has paid such tax on or before the due date specified under Section 139(1) of the Act, no disallowance can be made. It is the claim of the assessee before AO also that even if it is accepted that the tax should have been deducted, assessee has subsequently deposited the impugned amount of TDs on or before the due date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is aggrieved with the same and has raised following grounds of appeal:- 1. Ground no. 1. Whether on the facts and circumstances of the case and in law, the learned CIT (A) was correct in deleting the addition on account of annual let out value of the property ₹ 13,21,000/- ignoring the decision of the Hon'ble Delhi High Court in case of CIT Vs. Moni Kumar Subba (333 ITR 38) wherein it was held that rateable value is not binding on the Assessing Officer if the Assessing Officer shows the rateable value as per municipal value of the property is not represents correct fair rent? 2. Ground no.2. whether on the facts and circumstances of the case and in law, the learned CIT (A) was correct in deleting the addition made by Assessing Officer on account of expenses which were reversed at the beginning of next year and in respect of which no tax was deducted at source as per the provisions of Chapter XVIIB? 3. Ground no.3 whether on the facts and circumstances of the case and in law, the learned CIT (A) was correct in deleting the addition made b Assessing Officer on account of shortage in stock amounting to ₹ 78,000/- despite the facts that the evidence of shortage of stock ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... flat given on rent to Deutsche Bank at a monthly rate of ₹ 3,12,500/- is only having a security deposit of the same amount. Thus, the learned Assessing Officer was of the view that the flat given on rent to Tata Sky is not proper. When questioned, the assessee submitted that the flat given on rent to Tata Sky is slightly higher because of Municipal Ratable Value of the house property. The assessee has relied upon several judicial precedents. The learned Assessing Officer held that according to the provision of Section 23 of the Act, the annual value of the property is to be determined. According to him, the flat given on rent to Deutsche Bank is deriving the monthly rent of ₹ 3,12,500/-, whereas the rent charged from the Tata Sky is ₹ 1,92,500/-. The difference in rent is only because of the security deposit. Therefore, he held that fair market rent of the flat is ₹ 3,12,500/-. Accordingly, he took the annual value of the flat at rent of ₹ 3,12,500/- per month. Accordingly, the difference of ₹ 13,21,000/- was added to the income of the assessee under the head house property determining the fair rate of ₹ 37,50,000/- against the rent declare ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not charge any security deposit but only one month rent. The learned Assessing Officer has compared the rent received from Deutsche Bank and then made the addition. According to Section 23 of the Act, the annual value of let out property is to be determined on the basis of the same for which the property is expected to let out from year to year therefore, it has to be the market rate of the rent. As in case of assessee s own case for earlier years the co-ordinate Bench has resorted the matter back to the file of the learned Assessing Officer to determine the annual letable value, we also restore this matter back to the file of the learned Assessing Officer for reason being that he has compared the rent of F.Y. 2010-11, received from Deutsche Bank with rent received in F.Y. 2013-14 from Tata Sky. The learned Departmental Representative also relied upon the decision of the Hon'ble Delhi High Court in CIT Vs. Moni Kumar Subba (333 ITR 38) to submit that the rateable value is not binding on the learned Assessing Officer if the rateable value as per Municipal record does not represent the correct fair rent. The learned Assessing Officer may consider the same and after giving an oppo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... td. in ITA No. 8597/Mum/2010, based on this, he deleted the disallowance. 010. The learned Departmental Representative vehemently submitted that the assessee has made provisions in the books of account determining the party, quantum of work, and the actual amount of provision. Therefore, the payee and the amount are identified in this case. Assessee has provided this expenditure in its books of account as assessee has incurred these expenses wholly and exclusively for the purpose of the business. Therefore, the tax should have been deducted at source at the time of making the provision. He otherwise submitted that if the amount of tax due on the whole sum has not been deducted as at the end of the year but subsequently, tax has been deducted and same is deposited on or before the due date of filing of the return of income of the assessment year in which provision is made, disallowance to that extent could not have been made. However, no such fact is available on the record. Therefore, the order of the learned CIT(A) is not sustainable. 011. We have carefully considered the contention of the learned Departmental Representative. We find that the provision has been made by the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt of half yearly physical verification of raw material, chemicals and also finished goods. The assessee s closing stock and opening stock is in the range of Rs. 13,200 lacs. The difference arisen in the stock is only ₹ 78,000/- hence, this is a normal occurrence in such account of engineering producing company having multi state operations. The learned CIT (A) look to the totality of the facts has deleted the addition. We do not find any infirmity in the same. Even otherwise in absence of any adverse material if on physical verification shortage of stock is found, it is an ordinary loss in case of a manufacturer, same could not have been disallowed by the learned Assessing Officer, accordingly, we dismiss round no.3 of the appeal. 015. Ground no.4 is with respect to the deletion of the addition of ₹ 7,56,000/-. The learned Assessing Officer found that assessee has shown ₹ 689,00,000/- as sale of scrap till 27thMarch 2014. The learned Assessing Officer questioned the stock from 27th March 2014 to 31stMarch 2014, and why same is not accounted for. The assessee submitted that scrap is recorded as sale only when it is sold. Generation of scrap is not at all recorded ..... X X X X Extracts X X X X X X X X Extracts X X X X
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