Subash Agarwal for the Assessee. Jayanta Khanra, JCIT Sr. D/R for the Revenue.

This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) – 18, Kolkata, (hereinafter the “ld.CIT(A)”), dt. 27/08/2019 and the solitary issue involved therein relates to the addition of Rs.24,00,000/- made by the Assessing Officer and confirmed by the ld. CIT(A) by treating the same as lease rent received by the assessee which is chargeable to tax.

2. The assessee in the present case is a company which is engaged in the business of supply of raw jute. The return of income for the year under consideration was filed by it on 31/03/2014, declaring its total income at NIL. During the course of assessment proceedings, it was noticed by the Assessing Officer from the relevant Form No. 26AS that, lease rent of Rs.24,00,000/- was received by the assessee during the year under consideration and even though tax at source was deducted from the said amount, the income from lease rent was not offered to tax by the assessee company in its return of income. In this regard, the following explanation was offered by the assessee:-

“(1) the company has given the Jute Mill at Katihar on lease to Sunbio Manufacturing Pvt. Ltd. on term of Agreement dt. 20/02/2004 for a period of 5 years w.e.f. 01/04/2004,

(2) the said lease has not vacated the Mill even after extension of 8 months from the expiry of lease on 31/03/2009, (3) thus, since 1st Oct, 2009 said company is in possession of Mill as trespasser, (4) Company has filed a suit for possession of the property before High Court at Patna which is pending and (5) Company is neither claiming any lease rent or conversion charges from said compapending the suit before Patna High Court.”

2.1. On the basis of the above explanation, it was claimed by the assessee that the amount of Rs.24,00,000/-, in question was not chargeable to tax in its hands for the year under consideration. The Assessing Officer did not find merit in this claim of the assessee and proceeded to make an addition of Rs.24,00,000/ the assessee in the assessment completed u/s 143(3) of the Act vide order dt.03/03/2015.

3. Against the order passed by the Assessing Officer u/s 143(3) of the Act, an appeal was preferred before the ld. CIT(A) challenging the addition of Rs.24,00,000 made by the Assessing Officer. During the course of appellate proceedings before the ld. CIT(A), the following submissions were made on behalf of the assessee company,in support of its case that the amount of Rs.24,00,000/ chargeable to tax in its hands for the year under consideration:

“1) Appellant Company owns a Jute Sunbio Manufacturing Pvt. Ltd. as per agreement dt. 20/02/2004 for a period of 5 years w.e.f. 01/04/2004.

2) The said leasee has not vacated the Mill even after extension of 6 months from the expiry of lease on 31.03.2009.

3) Thus, since 1st Oct, 2009, said company is in possession of Mill as trespasser.

4) Company has filed a suit for possession of the property before High Court at Patna which was pending as on 31.03.2012.

5) Company treating the said leconversion charges from said leasee company nor recognized the same as income pending the suit before Patna High Court.

6) This fact was given in Note 21 of the audited accounts for the year :

“2.1 Subject to approval from the Concerned Authorities, company had re entered into lease agreement dated 20th February, 2004 valid for 5 years w. e. f 1st April, 2004 whereby the Mill at Katihar was given on lease and accordingly the lessee is liable for pa liabilities arising on day to day running of the Mill. Consequent to the expiry of the Lease Agree up to 30th September, 2009 was given to the surrender the possession of the Jute Inspite of the written Agreement the lessee has so far not surrendered the possession of the Jute Mill and continued to run the Jute document. The matter is currently sub judice a Court. In this regard High Court at Patna which is pending and (5) Company is neither claiming any lease rent or conversion charges from said company nor recognising the same as income pending the suit before Patna High Court.”

On the basis of the above explanation, it was claimed by the assessee that the, in question was not chargeable to tax in its hands for the under consideration. The Assessing Officer did not find merit in this claim of the assessee and proceeded to make an addition of Rs.24,00,000/- to the total income of the assessee in the assessment completed u/s 143(3) of the Act vide order dt. Against the order passed by the Assessing Officer u/s 143(3) of the Act, an appeal was preferred before the ld. CIT(A) challenging the addition of Rs.24,00,000/ made by the Assessing Officer. During the course of appellate proceedings before the CIT(A), the following submissions were made on behalf of the assessee company,in support of its case that the amount of Rs.24,00,000/- in question was not chargeable to tax in its hands for the year under consideration:-

1) Appellant Company owns a Jute Mill at Katihar (Bihar), which was leased to m/s. Sunbio Manufacturing Pvt. Ltd. as per agreement dt. 20/02/2004 for a period of 5 years.

2) The said leasee has not vacated the Mill even after extension of 6 months from the on 31.03.2009. Oct, 2009, said company is in possession of Mill as trespasser.

4) Company has filed a suit for possession of the property before High Court at Patna which was pending as on 31.03.2012.

5) Company treating the said leasee as Trespasser has neither claimed any lease rent or conversion charges from said leasee company nor recognized the same as income pending the suit before Patna High Court.

6) This fact was given in Note 21 of the audited accounts for the year :-

Subject to approval from the Concerned Authorities, company had re entered into lease agreement dated 20th February, 2004 valid for 5 years w. e. f 1st April, 2004 whereby the Mill at Katihar was given on lease and accordingly the lessee is liable for payment of interest on Term Loan, statutory and other liabilities arising on day to day running of the Mill. Consequent to the expiry of the Lease Agreement w.e.f. 1st April, 2009 a temporary extension for six months September, 2009 was given to the lessee where after the lessee was to surrender the possession of the Jute Mill w. e. j. 1st October, 2009 to the lessor. of the written Agreement the lessee has so far not surrendered the possession of the Jute Mill and continued to run the Jute Mill without any valid document. The matter is currently sub judice and pending in the Patna High this regard the company has also come to learn that the lessee also High Court at Patna which is pending and (5) Company is neither claiming any lease any nor recognising the same as income On the basis of the above explanation, it was claimed by the assessee that the, in question was not chargeable to tax in its hands for the under consideration. The Assessing Officer did not find merit in this claim of the to the total income of the assessee in the assessment completed u/s 143(3) of the Act vide order dt. Against the order passed by the Assessing Officer u/s 143(3) of the Act, an appeal was preferred before the ld. CIT(A) challenging the addition of Rs.24,00,000/- made by the Assessing Officer. During the course of appellate proceedings before the CIT(A), the following submissions were made on behalf of the assessee company, in question was not Mill at Katihar (Bihar), which was leased to m/s. Sunbio Manufacturing Pvt. Ltd. as per agreement dt. 20/02/2004 for a period of 5 years.

2) The said leasee has not vacated the Mill even after extension of 6 months from the Oct, 2009, said company is in possession of Mill as trespasser.

4) Company has filed a suit for possession of the property before High Court at Patna as Trespasser has neither claimed any lease rent or conversion charges from said leasee company nor recognized the same as income Subject to approval from the Concerned Authorities, company had re- entered into lease agreement dated 20th February, 2004 valid for 5 years w. e. f 1st April, 2004 whereby the Mill at Katihar was given on lease and accordingly payment of interest on Term Loan, statutory and other liabilities arising on day to day running of the Mill. Consequent to the expiry of a temporary extension for six months lessee whereafter the lessee was to Mill w. e. j. 1st October, 2009 to the lessor. of the written Agreement the lessee has so far not surrendered the ill without any valid pending in the Patna High company has also come to learn that the lessee also deposited TDS amounting to Rs.2.40 Lacs with the Income Tax authorities. Since no amount was received by the company from the lessee, it has not provided any lease rent during the year.”

7) As a matter of fact,Ashopa as Director of the appellant, made a renewal of lease agreement 07/02/2009.

8) Appellant filed suit before Patna High Court being Civil Writ J 11486 of 2011 making leasee as well as other the suit.

9) a) The leasee to mislead the proceeding deducted TDS lease rent of Rs.2,40,000/ 07/02/2009. Such TDS was reflected in Form No. 26AS.

However appellant has not recognized the renewal trespasser and required the possession.

b) Assessee company has not received such sum at all. We are lease Rent for the period from F. Y. 2009

10) Hon'ble Patna High Court under :-

11) "The writ application was filed for quashi Scientist “F" & Head, Bureau This is the second round respondent no. 6 had approached this Court by filing CWJC No. 931/2011 which was disposed of by order dated 0 of Indian Standards, Patna Branch mwhether Ramawtar Ashopa was the relevant date and had signed matter of renewal of licence of the petitioner of that case (respondent no. 8 in this case).

From the facts stated in the pleadings of the parties there appears to be a dispute between two factions in the petitioner company one represented through its Director,Saurav Banerjee who has other through another represent the Company which has which has also been added as respondent no. 8 to the present writ application. The same position was also noted in the earlier order dated 01.03.2011. While passing the impugned order dated 29.04.2011, the Indian Standards, Patna, could not arrive at any specific conclusion as to whether the lease agreement had actually been executed by Mr. Ashopa since Mr. Ashopa appearing before him denied the said execution but relying 25 lacs was duly paid to the lessor and the same was also accepted and encashed by the lessor and necessary income tax was also deducted from the said payment, came to the conclusion that by accept Agreement has been acted of law and the issue can only be decided by a competent Court of Law.

In my view, the said issue can only be evidence by authorities under the Companies Act, in this It is apparent that issues of deposited TDS amounting to Rs.2.40 Lacs with the Income Tax authorities. Since amount was received by the company from the lessee, it has not provided any lease rent during the year.”

the leasee by obtaining fraudulent signature of Sri Ramawatar as Director of the appellant, made a renewal of lease agreement

8) Appellant filed suit before Patna High Court being Civil Writ Jurisdiction 11486 of 2011 making leasee as well as other group of Kali Charori Sharma as party to.

9) a) The leasee to mislead the proceeding deducted TDS of Rs.2,40,000 lease rent of Rs.2,40,000/- in terms of said fraudulent lease agree 07/02/2009. Such TDS was reflected in Form No. 26AS of the appellant. However appellant has not recognized the renewal agreement, treated the leasee as trespasser and required the possession of the Jute Mill.

b) Assessee company has not received such sum at all. We are submitting period from F. Y. 2009-10 to F. Y. 2012-13. Hon'ble Patna High Court vide order dated 05/02/2013 disposed off the writ as "The writ application was filed for quashing the order dated 29.04.2011 passed by t F" & Head, Bureau of Indian Standards, Patna and for consequential.

This is the second round of litigation before this Court. On the earlier occasion the respondent no. 6 had approached this Court by filing CWJC No. 931/2011 which was disposed of by order dated 01.03.2011 with a direction to the Director & Head of Bureau Standards, Patna Branch Office to take up the matter afresh and decide whether Ramawtar Ashopa was the Director of M/s. Sun Bio Technology Limited on the relevant date and had signed the lease agreement and also to consider and decide the licence of the petitioner of that case (respondent no. 8 in this case).

From the facts stated in the pleadings of the parties there appears to be a dispute in the petitioner company one represented through its Director, Banerjee who has filed the writ application on behalf of the Company and another Director, Kali Charan Sharma, who has been allowed to represent the Company which has also been added as respondent no. 8 to the which has also been added as respondent no. 8 to the present writ application. The same position was also noted in the earlier order dated 01.03.2011. While passing the impugned order dated 29.04.2011, the Scientist, “F” & Head, Bureau of Indian Standards, Patna, could not arrive at any specific conclusion as to whether the lease agreement had actually been executed by Mr. Ashopa since Mr. Ashopa appearing said execution but relying only upon the fact that lease rent was duly paid to the lessor and the same was also accepted and encashed by the lessor and necessary income tax was also deducted from the said payment, came to the conclusion that by accepting the payment of lease rent, it seems that the Lease has been acted upon. However, it was held that it is a complicated question of law and the issue can only be decided by a competent Court of Law.

In my view, the said issue can only be properly resolved after taking evidence by authorities under the Companies Act, in this case, the Company Law Board.

It is apparent that issues of management control of the company in such circumstances deposited TDS amounting to Rs.2.40 Lacs with the Income Tax authorities. Since amount was received by the company from the lessee, it has not provided any the leasee by obtaining fraudulent signature of Sri Ramawatar as Director of the appellant, made a renewal of lease agreement on dated urisdiction Case No. Sharma as party to 000/ - on purported fraudulent lease agreement dated ppellant. treated the leasee as submitting the ledger of disposed off the writ as the order dated 29.04.2011 passed by the and for consequential orders.

On the earlier occasion the respondent no. 6 had approached this Court by filing CWJC No. 931/2011 which was 03.2011 with a direction to the Director & Head of Bureau afresh and decide as to Technology Limited on the the lease agreement and also to consider and decide the licence of the petitioner of that case (respondent no. 8 in this case).

From the facts stated in the pleadings of the parties there appears to be a dispute in the petitioner company one represented through its Director, application on behalf of the Company and the Director, Kali Charan Sharma, who has been allowed to also been added as respondent no. 8 to the Company which has also been added as respondent no. 8 to the present writ application. The same & Head, Bureau of Indian Standards, Patna, could not arrive at any specific conclusion as to whether the lease agreement had actually been executed by Mr. Ashopa since Mr. Ashopa appearing act that lease rent of Rs. was duly paid to the lessor and the same was also accepted and encashed by the lessor and necessary income tax was also deducted from the said payment, came to the lease rent, it seems that the Lease held that it is a complicated question taking appropriate , the Company Law Board. company in such circumstances could have been brought to the notice of the Company Law Board a sought under Section 398 (l)(b) of the Companies Act and had that been d matter would have been resolved by now. However, consider complicated issues of fact ad to who is in actual control and management of the company has arisen and repeated being the true representative of the as also the parties who claim like respondent no. 6 to have taken lease of company's plant and machinery and factory. Let the said issue be resolved by the Company Law Board efficaciously.

The writ application is, accordingly Board to decide the issue as to which of the Board of Directors of the Company remain on the Board of the Company taking int resolutions are in existence stating that some of the Directors have Board of Directors. Let all these issues be considered and decided by the Company Law Board after giving opportunity to both the parties period of three months from the date of appearance of the It is made clear that the order resolved as to whether the lease agreement dated 07.02.2009 as also the lease agreement dated 29.08.2011 were entered into with a Director of the Comp legally authorized by the company on that date to sign the lease agreement) which shall also be decided by the Company Law Board while deciding main issue.

12) Legal Portion in this regards is as under a) Section 108 of the Transfer lease, the erstwhile lessee is obligated to put the even if there is no express covenant in the contract.

b) In M/s. Raptakos Brett & Co. Ltd. v. Ganesh Property that, when a lease comes to an end by there be a breach and the sufferance, and it becomes the duty of the lessee under Property Act to restore possession to the Iessor forthwith.

13) Appellant company is not record 07/02/2009 and lease agreement dated 29/08/20 group.

14) In the aforesaid such a situation

a) Vacate and peaceful possession and

b) Mesne Profit for unauthorized use of the Jute Mill w. e. f 01.10.20 handing over of the possess.

15) In view of the peculiar litigations, company has not recognized t books when it is fighting against the leasee to Mill and shall be subsequently entitled to Mesne Pro could have been brought to the notice of the Company Law Board a ought under Section 398 (l)(b) of the Companies Act and had that been matter would have been resolved by now. However, consider in complicated issues of fact ad to who is in actual control and management of the any has arisen and repeated by both the factions are approachin true representative of the company, it would be in the interest of the company as also the parties who claim like respondent no. 6 to have taken lease of company's and machinery and factory. Let the said issue be resolved by the Company Law.

The writ application is, accordingly disposed of with a direction to the Company l.aiu Board to decide the issue as to which of the factions is in control and management Board of Directors of the Company Including as to which of the Directors are entitled to Board of the Company taking into account the fact that several resolutions are in existence stating that some of the Directors have been removed by the Board of Directors. Let all these issues be considered and decided by the Company Law Board after giving opportunity to both the parties to be heard in the matter within months from the date of appearance of the parties before it at the order dated 29.04.2011 shall not be acted upon until it is resolved as to whether the lease agreement dated 07.02.2009 as also the lease agreement dated 29.08.2011 were entered into with a Director of the Comp by the company on that date to sign the lease agreement) which i shall also be decided by the Company Law Board while deciding main issue. Legal Portion in this regards is as under.

a) Section 108 of the Transfer of Property Act provides that, upon determination of a lessee is obligated to put the lessor in possession o] tile prop even if there is no express covenant in the contract.

M/s. Raptakos Brett & Co. Ltd. v. Ganesh Property, the Supreme Court when a lease comes to an end by efflux of time, or by notice of termination there be a breach and the lessee's rights are forfeited, the lessee becomes a tenant sufferance, and it becomes the duty of the lessee under Section 108 of restore possession to the Iessor forthwith. Apellant company is not recognizing the renewal of lease agreement dated 07/02/2009 and lease agreement dated 29/08/2011 fraudulently executed by other.

14) In the aforesaid such a situation, company's claim shall be :-

a) Vacate and peaceful possession and

b) Mesne Profit for unauthorized use of the Jute Mill w. e. f 01.10.20 handing over of the possession to the appellant.

15) In view of the peculiar litigations, company has not recognized the books when it is fighting against the leasee to be termed as not validly in possequently entitled to Mesne Profit from lease. could have been brought to the notice of the Company Law Board and its decision ought under Section 398 (l)(b) of the Companies Act and had that been done, me ring the fact that complicated issues of fact ad to who is in actual control and management of the are approaching this Court as, it would be in the interest of the company as also the parties who claim like respondent no. 6 to have taken lease of company's and machinery and factory. Let the said issue be resolved by the Company Law direction to the Company l.aiu and management of the Directors are entitled to account the fact that several been removed by the Board of Directors. Let all these issues be considered and decided by the Company Law be heard in the matter within a parties before it. all not be acted upon until it is resolved as to whether the lease agreement dated 07.02.2009 as also the lease agreement dated 29.08.2011 were entered into with a Director of the Company who was by the company on that date to sign the lease agreement) which issue shall also be decided by the Company Law Board while deciding main issue.” determination of a lessor in possession o] tile property, Supreme Court held of time, or by notice of termination, or ifm the lessee becomes a tenant at 08 of the Transfer of agreement dated fraudulently executed by other.

b) Mesne Profit for unauthorized use of the Jute Mill w. e. f 01.10.2009 till the he lease rent in its validly in possession of

16) Appellant shall recognize said lease rent, mesne profit and resolving of the dispute finally and under the order of otherwise company has several legal.

17) Deposit of TDS on the Lease Rent was just to strengthen the fraud case by the lease having remained in possession on

18) We draw your kind attention to the case of Pal Properties (India) Pvt. Ltd. v.CIT 254 ITR 687 (Delhi) held:

"Head Note

After termination of lease, lessee occupied premises even after expiry of However, after a lapse of 2 1⁄2 Years not paid by lessee - Assessee returned cheques and filed suit which is pending before High Court - Assessing Officer while framing assessm upon assessee to explain as to why rent terminal it was explained on behalf of assessee that lease term assessee was not filed legal suit against lease dispute, it was submitted on behalf of assessee that same could not be brought to tax Assessing Officer rejected assessee's claim and brought rent for taxation.

(Appeals) confirmed order of assessin to be determined by High Court, does not come within purview of an accrued income for the purpose of sections 4 and 5.

Ratio: Mesne profit which is yet to be determined by High Court within purview of accrued income for purpose of section 4 and 5."

19) Under these circumstance, fastening the said income as income of the appellant is not correct.

20) Therefore, Ld. A. o. was wrong in taking said Rs. neither accrued to the appellant nor received by it.

21) We are attaching the Form 26A honour shall find that no such fraudulent TDS was deducted by opposite group and trespassers.

22) We therefore, request and oblige.”

3.1. The ld. CIT(A) did not find merit in the submissions made on behalf of the assessee as above and proceeded to confirm the addition of Rs.24,00,000/ the Assessing Officer for the following reasons given in paragraph no. 5.2. of his impugned order, which is reproduced below:

“5.2 The above contention of the appellant is considered. T whether the lease rental income which is not recognized b litigation could be considered as its income TOS is deducted by the deductor of deductee. As per the section 198 "all sums deducted in accordance with the provisions of this chapter (that means computing the income of an assessee be

16) Appellant shall recognize said lease rent, mesne profit and TDS resolving of the dispute finally and under the order of the court to accept such rent, otherwise company has several legal claims including mesne profits etc.

17) Deposit of TDS on the Lease Rent was just to strengthen the fraud case by the lease having remained in possession on the basis of fraudulent agreement of renewal of lease.

18) We draw your kind attention to Delhi High Court Judgment dated Pal Properties (India) Pvt. Ltd. v.CIT 254 ITR 687 (Delhi) lease, lessee occupied premises even after expiry.

However, after a lapse of 2 1⁄2 Years lessee sent cheques for the period for which rent was Assessee returned cheques and filed suit which is pending before High Court - Assessing Officer while framing assessment under section 143(3) called upon assessee to explain as to why rent termination of lease was not offered on behalf of assessee that tenancy was not valid after termination of was not entitled to receive rent – it was explained that assessee not filed legal suit against lease for vacation of premises – As right to receive rent was in dispute, it was submitted on behalf of assessee that same could not be brought to tax Assessing Officer rejected assessee's claim and brought rent for taxation order of assessing officer - Not justified - Mesne profit which is to be determined by High Court, does not come within purview of an accrued income for the purpose of sections 4 and 5.

Ratio: Mesne profit which is yet to be determined by High Court within purview of accrued income for purpose of section 4 and 5."

19) Under these circumstance, fastening the said income as income of the appellant is

20) Therefore, Ld. A. o. was wrong in taking said Rs. 24,00,000/ - as incom neither accrued to the appellant nor received by it.

21) We are attaching the Form 26ASfromAsst year 2014-15 to 2018- honour shall find that no such fraudulent TDS was deducted by opposite group and, request your honour to kindly delete the addition of Rs. 24,00,000/ The ld. CIT(A) did not find merit in the submissions made on behalf of the above and proceeded to confirm the addition of Rs.24,00,000/ the Assessing Officer for the following reasons given in paragraph no. 5.2. of his impugned order, which is reproduced below:-

“5.2 The above contention of the appellant is considered. The question t whether the lease rental income which is not recognized by the appellant in view of the litigation could be considered as its income or not. As per the Income Tax A deductor the corresponding income becomes taxable in the hands the section 198 "all sums deducted in accordance with the provisions of this chapter (that means from Sec lion 192 to 196) shall for computing the income of an assessee be deemed to be income received court to accept such rent, including profits etc.

17) Deposit of TDS on the Lease Rent was just to strengthen the fraud case by the lease fraudulent agreement of renewal of lease. dated 21-12-2001 in Pal Properties (India) Pvt. Ltd. v.CIT 254 ITR 687 (Delhi) wherein it was lease, lessee occupied premises even after expiry of lease term. ques for the period for which rent was Assessee returned cheques and filed suit which is pending before rent under section 143(3) called of lease was not offered for taxation valid after termination of explained that assessee had receive rent was in dispute, it was submitted on behalf of assessee that same could not be brought to tax - Assessing Officer rejected assessee's claim and brought rent for taxation - Commissioner profit which is yet to be determined by High Court, does not come within purview of an accrued income for Ratio: Mesne profit which is yet to be determined by High Court does not come within purview of accrued income for purpose of section 4 and 5."

19) Under these circumstance, fastening the said income as income of the appellant is as income which is -19, wherein your honour shall find that no such fraudulent TDS was deducted by opposite group and our honour to kindly delete the addition of Rs. 24,00,000/ -

The ld. CIT(A) did not find merit in the submissions made on behalf of the above and proceeded to confirm the addition of Rs.24,00,000/- made by the Assessing Officer for the following reasons given in paragraph no. 5.2. of his he question to be answered is the appellant in view of the per the Income Tax Act, once the income becomes taxable in the hands the section 198 "all sums deducted in accordance with the foregoing from Sec lion 192 to 196) shall for the purpose of me received. In this case, as per 26AS the TDS has been deducted by the lesser which means the corresponding income, of Rs. 24,00,000/ this regard, it is relevant t recognized the renewal of 29.08.2011 which, as per the appellant fraudulently will not recognize the lease rent till the issue Court. However, for Income Tax 'purposes the income deducte reflected in Form 26AS shall be deemed to be the income deducted by the lessee, as per the Section 199 of the appellant and hence the income received during the year. The appellant should have recognized the income wit stipulation or rider in the accounts that the said in offered only for the purpose lease agreement is forged not established the TDS on rent and credited form 26AS. Hence in this case, the amount of appellant should have admitted the Hon’ble court determines the this amount.

Therefore, the facts of the case relied upon by the appellant are distinguishable and not applicable to the case of the appellant.”

4. Aggrieved by the order of the ld. CIT(A), the assessee has before the Tribunal.

5. I have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel of the assessee has submitted that the addition of Rs.24,00,000/- in question made by th by the ld. CIT(A) by relying on the provision of Section 198 of the Act, which are not applicable to the facts of the present case. He has contended amount in question received by the assessee itself such nature is determined, the chargeability of the same to tax cannot be decided. He has contended that this issue is pending before the Company Law Board as a result of the order dt. 05/02/2013 passed by the Hon’ble aspect was completely overlooked by the ld. CIT(A). By relying on the decision of Mumbai Special Bench of the ITAT in the case of (2008) 100 ITD (Mum) S.B, he assessee for wrongful deprivation of use and occupation of property constitutes capital receipt and hence not chargeable to tax under the provisions of the Income Tax Act, 1961 (‘Act’). He has urged that this issue, therefore, is required back to the Assessing Officer for deciding the same afresh after taking into has been deducted by the lesser which means the corresponding income, of Rs. 24,00,000/- should have been recognized as income of the appellant. In this regard, it is relevant to mention that the appellant submitted that it has not of lease agreement dated 07.02.2009 and lease agreement dated which, as per the appellant fraudulently executed by the lessee and hence will not recognize the lease rent till the issue is resolved by the Hon’ble Court. However, for Income Tax 'purposes the income deducted and which is duly reflected in Form 26AS shall be deemed to be the income of the appellant deducted by the lessee, as per the Section 199 is considered as payment or Tax on behalf he appellant and hence the appellant shall consider the corresponding income during the year. The appellant should have recognized the income with stipulation or rider in the accounts that the said income is in dispute an offered only for the purpose of Taxation. The issue is in subjudice and the fact lease agreement is forged not established. However, the tenant or lessee has deducted on rent and credited to the government account and it is duly reflected in the in this case, the amount of rent is determined to an extent and the should have admitted it as its income for the year under consideration. Eve the Hon’ble court determines the mense profits the rent payment would not be less than this amount. Therefore, the facts of the case relied upon by the appellant are distinguishable and not applicable to the case of the appellant.” Aggrieved by the order of the ld. CIT(A), the assessee has preferred this appeal.

I have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel of the assessee has submitted that the in question made by the Assessing Officer was confirmed by the ld. CIT(A) by relying on the provision of Section 198 of the Act, which are not applicable to the facts of the present case. He has contended that the nature of the amount in question received by the assessee itself is in dispute and unless and until such nature is determined, the chargeability of the same to tax cannot be decided. He has contended that this issue is pending before the Company Law Board as a result of the order dt. 05/02/2013 passed by the Hon’ble Patna High Court and this vital aspect was completely overlooked by the ld. CIT(A). By relying on the decision of Mumbai Special Bench of the ITAT in the case of Narang Overseas (, he has contended that mense profits received by the deprivation of use and occupation of property constitutes capital receipt and hence not chargeable to tax under the provisions of the Income (‘Act’). He has urged that this issue, therefore, is required back to the Assessing Officer for deciding the same afresh after taking into has been deducted by the lesser which means the corresponding should have been recognized as income of the appellant. In appellant submitted that it has not lease agreement dated 07.02.2009 and lease agreement dated executed by the lessee and hence is resolved by the Hon’ble Patna High and which is duly of the appellant. The Tax as payment or Tax on behalf consider the corresponding income as during the year. The appellant should have recognized the income with come is in dispute and the income is of Taxation. The issue is in subjudice and the fact that the . However, the tenant or lessee has deducted and it is duly reflected in the rent is determined to an extent and the the year under consideration. Even profits the rent payment would not be less than this amount. Therefore, the facts of the case relied upon by the appellant are preferred this appeal.

I have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel of the assessee has submitted that the Assessing Officer was confirmed by the ld. CIT(A) by relying on the provision of Section 198 of the Act, which are not that the nature of the is in dispute and unless and until such nature is determined, the chargeability of the same to tax cannot be decided. He has contended that this issue is pending before the Company Law Board as a result of High Court and this vital aspect was completely overlooked by the ld. CIT(A). By relying on the decision of (P) Ltd. vs. ACIT received by the deprivation of use and occupation of property constitutes capital receipt and hence not chargeable to tax under the provisions of the Income (‘Act’). He has urged that this issue, therefore, is required to be sent back to the Assessing Officer for deciding the same afresh after taking into consideration the decision to be the exact nature of the amount in question received by the assessee.

6. The ld. D/R has not raised any objection for sending the matter back to the Assessing Officer keeping in view all the facts and circumstances of the case as explained by the ld. Counsel for the assessee before the ld. CIT(A) as well as before the Tribunal. He, however, has contended that specific directions may be given to the Assessing Officer while sending the matter back to him for reconsideration.

7. After taking into consideration the submissions made by the learned representatives of both the sides in case, I consider it just and proper to set aside the impugned order of the ld. CIT(A) confirming the addition of Rs.24,00,000/ the matter to the file of the Assessee into consideration the decision of Company Law Board determining the exact nature of amount in question received by the assessee during the year under consideration. Keeping in view the nature of the said Board, the Assessing Officer shall decide the chargeability or otherwise of the said amount to tax in the hands of the assessee for the year under consideration.

8. In the result, appeal of the assessee is tr purposes.

Order pronounced in the open court on to be rendered by the Company Law Board, determining the exact nature of the amount in question received by the assessee. The ld. D/R has not raised any objection for sending the matter back to the Assessing Officer keeping in view all the facts and circumstances of the case as explained by the ld. Counsel for the assessee before the ld. CIT(A) as well as before He, however, has contended that specific directions may be given to the Assessing Officer while sending the matter back to him for reconsideration.

After taking into consideration the submissions made by the learned representatives of both the sides in the light of the facts and circumstances of the case, I consider it just and proper to set aside the impugned order of the ld. CIT(A) confirming the addition of Rs.24,00,000/- made by the Assessing Officer and restore the matter to the file of the Assessing Officer for deciding the same afresh after taking the decision of Company Law Board determining the exact nature of amount in question received by the assessee during the year under consideration.

Keeping in view the nature of the said amount, as finally decided by the Company Law Board, the Assessing Officer shall decide the chargeability or otherwise of the said amount to tax in the hands of the assessee for the year under consideration.

In the result, appeal of the assessee is treated as allowed for statistical Order pronounced in the open court on the 2nd day of June

Sd/-

[P.M. Jagtap]

Vice President