JATOYAH INVESTMENTS & HOLDINGS LTD,MUMBAI vs. ITO 12(3)(1), MUMBAI

This is an appeal filed by the assessee against the order of CIT(A)- 20, Mumbai dated 02/03/2017 in the matter of order passed u/s.143(3) of the IT Act.

In the appeal memo, assessee has taken four grounds for taxing the entire rental income in the hands of the assessee.

Rival contentions have been heard and record perused.

Facts in brief are that assessee is an investment company. It was owing the property jointly with M/s. Aryadeep Investments and Holdings Pvt. Ltd., This property was given on rent, rental income was given by the M/s. Jatoyah Investments & Holdings Pvt. Ltd., lessee by account payee cheque to the assessee in the joint ownership. Contention of assessee was that only that portion of rental income should be assessed in the hands of assessee of which assessee is owner. However, the AO taxed the entire rental income, taking the same as shown by the assessee in the earlier year. AO observed that in the preceding year entire rental income was offered by the assessee in its return of income, therefore, in the year under consideration also assessee should have offered the entire rental income in his return of income.

By the impugned order, CIT(A) confirmed the action of the AO against which assessee is in further appeal before us.

I have considered rival contentions and carefully gone through the orders of the authorities below.

From the record I found that in the present case a stilt portion of around 1000 sq.ft. of Allied Bunglow, 207/208 St. John Road, Bandra(W), Mumbai - 400050, the property is jointly owned by assessee with M/s.Aryadeep Investments and Holdings Pvt. Ltd. The assessee had entered into a rental agreement with M/s. K Black Fashions for the both the properties i.e. plot no.207 and 208, plot no.207 is owned by assessee and plot 208 owned by M/s.Aryadeep Investments Pvt. Ltd. Assessee entered into rent agreement for both the properties, but the Sub-Registrar refused to register single agreement in respect of both the properties and finally it was registered in the name of assessee itself. I found that the rent was received by both the Companies in the ratio 50:50 in their bank account separately and u/s.1941 of the Income Tax Act,