1. Heard Mr.Vimal Gupta, learned Senior Advocate appearing on behalf of the appellant-Revenue and Mr.P.J.Pardiwala, learned Sr. Advocate appearing on behalf of Respondent - Assessee. Perused the orders passed by the Commissioner of Income Tax Appeals and the Appellate Tribunal.
2. Mr.Gupta, learned Counsel for Revenue in support of his submissions submits that the Assessing Officer had noticed that the company had received rent of Rs.91,95,000/- on the premises let out by it and also received interest free deposit of Rs.3,22,50,000/-. The Assessing Officer noted that the property had been let out to the sister concern of the Assessee Company and therefore, the interest free deposit has influenced the rent fixed by the Assessee company. The premises therefore being not covered by the Maharashtra Rent Control Act, the Assessing Officer was justified in going by the mandate of Section 23(1) (a) of the Income Tax Act,1961.
3. In the submission of Shri.Gupta, the Commissioner as also the Tribunal have erred in going by the requirement stipulated by Section 23(1)(b) of the Act and the judgment of the Division Bench of this Court. That was confined to Section 23(1)(b) of the Act. The Division Bench has taken care and clarified Section 23(1)(a) of the Act, has not been considered by them. In such circumstances, the judgment was hardly a precedent for the purpose of the present case. The substantial question of law, therefore, directly arises for determination and viz. 'Whether the percentage of the interest free deposit received by the Assessee company from its sister concern against the premises let out to them can be added or not to the annual letting value of the property under Section 23(1)(a) of the Income Tax Act.'
4. On the other hand Mr.Pardiwala, learned Senior Advocate submits that this is not the case of a distinct assessee but the very assessee before it earlier, as held by the Tribunal and the Commissioner concurrently. The stand of the assessee has not been questioned by the department as far as the assessment year 2005-06 is concerned as observed by the Commissioner, Income Tax (Appeals), in an order which has been made on 9.2.2009. So far as the said order is concerned, the Tribunal has, in paragraph (3), held that the Bench by its order dated 21.5.2010 has considered only the issue of determination of annual letting value of the flat at Andheri which pertains to the second ground. As far as the first ground is concerned, the judgment of the Bombay Court in the case of CIT v. J.K.Investors (Bombay) Ltd. [2001] 248 ITR 723/[2000] 112 Taxman 107 was applied. The Revenue did not file any appeal against the findings of the first Appellate Authority for the earlier year 2005-2006, though the facts are identical. The only appeal filed was for the current assessment year. In such circumstances, Mr.Pardiwala would submit that the department now cannot say that a substantial question of law arises for determination and consideration in this appeal.
5. Having heard the learned Counsel at some length and perusing with their assistance the concurrent orders, we find that as far as very assessee is concerned, in the assessment year 2005-2006 an order was made and which was not questioned. That has been explained in paragraphs (3) and (4) of its order by the Appellate Tribunal. Firstly, when in the assessment year previous to one under consideration, the CIT (Appeals) has directed the Assessment officer to adopt the ratable value determined by BMC for financial year 2005-06 as the annual value of the flat, then, we are of the opinion that merely for the present year a different view need not be taken. The matter essentially, therefore, rests on the peculiar facts of the case of the present assessee. The situation in the previous assessment year and the assessment year under consideration has not changed and to such an extent as would enable us to interfere in the matter in exercise of jurisdiction under Section 260 A of the Income Tax Act 1961. Since the matter was essentially decided on the facts peculiar to the assessee's case, we are of the opinion that the larger controversy need not be gone into and/or does not arise in this Appeal. Keeping in view the peculiar facts of the case, no substantial question of law would arise for determination in this appeal. The appeal fails and it is dismissed. No costs.