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IN THE HIGH COURT OF DELHI AT NEW DELHI
32.
% Judgment reserved on: 3rd December, 2007
Date of decision:
10<sup>th</sup> December, 2007
ITA 794/2007
COMMISSIONER OF INCOME TAX .. Appellant Through Ms. Prem Lata Bansal, Advocate. versus
ASIAN HOTELS LIMITED ..... Respondent Through Mr. M.P. Rastogi and Mr. K.N.Ahuja, Advocates.
AND 33.+ ITA 998/2007
> COMMISSIONER OF INCOME TAX Through Ms. Prem Lata Bansal, Advocate. versus
ASIAN HOTELS LIMITED .... Respondent Through Mr. M.P. Rastogi and Mr. K.N. Ahuja, Advocates.
CORAM:
HON'BLE MR. JUSTICE MADAN B. LOKUR HON'BLE DR. JUSTICE S. MURALIDHAR
- 1. Whether Reporters of local papers may be allowed to see the order? - 2. To be referred to the reporter or not? - 3. Whether the order should be reported in the Digest?
DR. S.MURALIDHAR, J.
ITA No. 794 of 2007 is an appeal by the Revenue against the judgment dated 30th November, 2006 passed by the Income Tax Appellate Tribunal ('Tribunal') Delhi Bench "G", New Delhi in ITA No. 1266(Del.)/2004 for the Assessment Year 2000-01. ITA No. 998 of 2007 is an appeal by the
Hotels Limited 53 ITR 450 as well as the decision of this Court in Ravind Singh v. Commissioner of Income Tax (1994) 205 ITR 353 and upheld the order of the CIT(A).
As regards the Assessment Year 1995-96, the CIT(A) concurred with the AO but the Tribunal allowed the Assessee's appeal and reversed the decision of the CIT(A) relying upon its order in the case of the Assessee itself for the Assessment Year 2000-01.
- 6. Mrs. Prem Lata Bansal, learned Senior Standing counsel for the Revenue refers to the relevant statutory provisions and submits that it is inconceivable that the Assessee received the interest free deposit in respect of the premises let out on rent without any benefit accruing to it. The value of such benefit had been reasonably determined by the AO and, therefore, the subsequent order of the reversal of the Tribunal was incorrect in law. According to her the decision of the Tribunal in Bharat Hotel Limited was distinguishable on facts and the question that arose there does not arise for determination in the present cases. - 7. Ms. Bansal is right in her last submission. We may notice that the appeal filed by the Revenue in respect of Bharat Hotels Limited (ITA No. 4969 of 2000) was admitted by this Court on 27<sup>th</sup> November, 2000 on certain questions which do not include the specific question that arises in the present appeals. However, for the reasons explained hereafter, we are unable to be
orders.
Sections 23(1)(a) and 28(iv) of the Act read as under:
"Annual value how determined
- (1) For the purposes of section 22, the annual value of any property shall be deemed to be- - (a) the sum for which the property might reasonably be expected to let from year to year; or - (b) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or - (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable:
Provided that the taxes levied by any local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of accounting regularly employed by him) in determining the annual value of the property of that previous year in which such taxes are actually paid by him.
Explanation.- For the purposes of clause (b) or clause (c) of this subsection, the amount of actual rent received or receivable by the owner shall not include, subject to such rules as may be made in this behalf, the amount of rent which the owner cannot realise."
"Section 28 - Profits and gains of business or profession. The following income shall be chargeable to income-tax under the head "Profits and gains of business or profession",-
- (i) to (iii) xxx xxx xxx - [(iv) the value of any benefit or perquisite, whether convertible into money or not, arising from business or the exercise of a profession;"
A plain reading of the provisions indicates that the question of any notional interest on an interest free deposit being added to the income of an Assessee
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- 10. We therefore, find no infirmity in the order of the Tribunal and are of the view that no subsequent question of law arises. - 11. The appeals are dismissed.
S. MURALIDHAR, J
MADAN B. LOKUR, J
DECEMBER 10, 2007 dn
