TaxTMI 
TaxTMI 
2021 (11) TMI 535
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....s. Sobha Glazing & Metal Works [P] Ltd. 3. The appeals were admitted by this Court to consider the following substantial questions of law: IN ITA No.164/2017: 1. Whether the Tribunal is justified in law in holding that the annual value to be adopted at Rs. 54,88,798/- being Rs. 7/- per square feet without appreciating the various factors and consequently passed a perverse order on the facts and circumstances of the case? 2. Without prejudice whether the Tribunal was justified in law in not holding that for the purposes of computing annual value under section 23 of the Income-tax Act, the certificate issued of 'Jigani Gram Panchayat' Rs. 1.60/- per square feet has to be adopted consequently passed a perverse order on the facts and circumstances of the case? IN ITA No.166/2017: 1. Whether the Tribunal is justified in law in holding that the annual value to be adopted at Rs. 24,12,039/- being Rs. 7/- per square feet without appreciating the various factors and consequently passed a perverse order on the facts and circumstances of the case? 2. Without prejudice whether the Tribunal was justified in law in not holding that for the purposes of computing annual value u....
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....ding. The assessee had shown a sum of Rs. 25 Crores as lease deposit as on 31.03.2006 under the head, current liabilities in its financial statements. Similarly, the assessee - M/s. Sobha Glazing & Metal Works [P] Ltd., had entered into a lease agreement with M/s. Sobha Developers [P] Ltd., vide agreement dated 01.04.2006, for a monthly rent of Rs. 5,00,000/-. Vide subsequent agreement dated 30.03.2007, the payment of rent was reduced to Rs. 25,000/- per month with interest free security deposit of Rs. 11 Crores the said amount was shown at the current liability in the financial statements of the assessee. Learned counsel submitted that the assessee instead of taking loan from outside at a higher rate of interest had availed loan from its sister concern and hence was put to advantage and thus the rent was reduced from Rs. 5,00,000/- p.m., to Rs. 25,000/- p.m. The Assessing Officer has determined the annual letting value of the property in question comparing the lease between M/s. MTR Distributors [P] Ltd., and M/s. MTR Foods Ltd., without providing an opportunity to the appellant to rebut the same, non-furnishing of the copy of the said lease deed is against the principles of natu....
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.... the customers representing trade advances grouped under current liabilities were used for building the factory. The assessee being a regular supplier of interior materials, the entry in respect of current liability cannot perse be said to relate to a loan given out for construction activities. The shift from advances to loans was not satisfactory, no property tax documents were produced despite given several opportunities. The assessee had made arrangements in the context of the intending public issue in the case of the parent company. As such, the amount towards security deposit shown in the balance sheet of the assessee as on 31.03.2007 cannot represent a rent deposit as claimed. Thus, the Revenue has been completely subverted within this arrangement entered into by the appellant on the so called "commercial expediency" claimed by it. Having considered these findings, the Tribunal has analyzed the matter in the light of the judgments cited by the learned counsel for both the parties and confirmed the finding of the Commissioner of Income Tax [Appeals] in both the cases. 10. In the case of Azadi Bachao Andolan and Another supra, the Hon'ble Apex Court has held that th....
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....artmental representative. Nextly, it did not give any opportunity to the company to rebut the material furnished to it by him and it declined to take all the material that the assessee wanted to produce in support of its case. Placing reliance on this judgment, though the learned counsel for the assessee argued that the documents/lease agreements relied upon by the department with respect to M/s. MTR Products was not made available to the assessee would not be fatal for the determination of Annual Letting Value [ALV] of the property since the assessee had leased out the building for a monthly rent of Rs. 5,00,000/- as per the lease deed dated 01.04.2006 and 31.03.2006, by supplementary lease deed, entered on 29.03.2007, the monthly rent was reduced to Rs. 25,000/- per month with interest free security deposit of Rs. 25 Crores relating to ITA Nos.1607 and 1692/2012. Similarly, supplementary lease deed was entered on 30.03.2007 whereby the monthly rent was reduced to Rs. 25,000/- p.m., from Rs. 5,00,000/- p.m., with interest free security deposit of Rs. 11 Crores relating to ITA No.1630/2012. The interest free security deposit would certainly indicate the ALV of the property though i....