MANJU LALIT SINGHVI, MUMBAI V. ACIT, CIRCLE- 19 (2), MUMBAI

ITA 1056/MUM/2019

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 8671 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-03-2021
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 25-02-2019
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Assessee Lawyers: SUBODH RATNAPARKHI
• Keywords: Deemed owner of house property
• Section: 143(3); 142(1); 250

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 1056/MUM/2019 (A.Y: 2014-15) MANJU LALIT SINGHVI, 52/5, PURNIMA BUILDING, WALKESHWAR, MUMBAI - 400006 / VS. ACIT, CIRCLE 19(2), ROOM NO. 207, II FLOOR, MATRU MANDIR, TARDEO ROAD, MUMBAI - 400007 PAN/GIR NO. : AAOPS6900K ( APPELLANT ) .. ( RESPONDENT ) APPELLANT BY : SHRI SUBODH RATNA PARKHI, A R RESPONDENT BY : SHRI BHARAT ANDHLE, DR DATE OF HEARING 16 /02 /20 2 1 DATE OF PRONOUNCEMENT 17 /03 /202 1 / O R D E R PER PAVAN KUMAR GADALE, JM: THE ASSESSEE HAS FILED THE APPEAL AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 30, MUMBAI, PASSED U/S. 143 (3) AND 250 OF THE INCOME TAX ACT, 1961. 2. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL:- ITA NO . 1056/MUM/2019 MANJU LALIT SINGHVI - 2 - 1. THE HON. CIT (A) ERRED IN CONFIRMING THE ADDITIO N OF RS. 24,58,884/- MADE BY THE LD.AO UNDER THE HEAD INCOME FROM HOUSE PROPERTY BY DETERMINING THE ANNUAL LETTING VA LUE (ALV) IN RESPECT OF COMMERCIAL PREMISES BEING UNIT NO. 37, 2 ND FLOOR, RAGHUVANSHI MILLS COMPOUND, LOWER PAREL, MUMBAI NOT APPRECIATING THAT THE ALV OF THE SAID PREMISES WAS NIL AS PER THE PROVISIONS SEC. 23 (1) (C) OF THE I.T. ACT, 1961 AN D THEREFORE THE ADDITION WAS NOT JUSTIFIED AND WAS REQUIRED TO BE D ELETED. 2. WITHOUT PREJUDICE, THE HON. CIT (A) ERRED IN NOT ADJUDICATING THE GROUND OF APPEAL PERTAINING TO QUANTUM OF ANNUA L LETTING VALUE (ALV) DETERMINED BY THE LD. AO, BY IGNORING T HE MUNICIPAL RATABLE VALUE OF THE SAID PREMISES WHICH WAS RS. 35 ,150/- PER ANNUM ONLY AND THEREFORE THE ADDITION ON ACCOUNT OF ANNUAL LETTING VALUE (ALV) OF THE SAID PREMISES COULD NOT EXCEED THE MUNICIPAL RATABLE VALUE THEREOF. 3. THE BRIEF FACTS OF THE CASE ARE THAT, THE ASSESS EE IS AN INDIVIDUAL AND HAS INCOME FROM HOUSE PROPERTY AND I NCOME FROM OTHER SOURCES AND FILED THE RETURN OF INCOME F OR THE ASSESSMENT YEAR 2014-15 ON 29.07.2014 WITH THE TOTA L INCOME OF RS.48,81,640/-.THE RETURN OF INCOME WAS PROCESSED U/S 143 (1) OF THE ACT. SUBSEQUENTLY, THE CASE WAS SELECTED FOR SCRUTINY AND NOTICE U/S 143 (2) AN D 142(1) OF THE ACT ARE ISSUED. IN RESPONSE TO THE NOTICE, T HE LD.AR OF THE ASSESSEE APPEARED FROM TIME TO TIME AND SUBMITT ED THE DETAILS. ON PERUSAL OF THE COMPUTATION OF INCOME, T HE ASSESSING OFFICER (A.O.) FOUND THAT THE ASSESSEE IN THE FINANCIAL YEAR 2013-14 HAS NOT DISCLOSED THE RENTAL INCOME ITA NO . 1056/MUM/2019 MANJU LALIT SINGHVI - 3 - FROM ONE PROPERTY AT 2 FLOOR RAGHUVANSHI MANSION AND ISSUED SHOW CAUSE NOTICE. THE ASSESSEE HAS FILED TH E SUBMISSIONS MENTIONING THAT THE SAID PROPERTY WAS VACANT IN THE F.Y. 2013-14 DUE TO RENOVATION AND REPAIR WO RK AND THEREFORE NO RENTAL INCOME IS RECEIVED. BUT THE EXPLANATIONS FILED ARE NOT TO THE SATISFACTION OF THE A.O. AND APPLIED THE PROVISIONS OF SECTION 23(1) OF THE ACT AND CALCULATED DEEMED RENTAL INCOME. THE A.O. BASED ON THE RENTAL INCOME DISCLOSED BY THE ASSESSEE IN THE AY 2 013-14 HAS ALLOWED DEDUCTION OF MUNICIPAL TAXES AND WORKE D OUT THE NET RENTAL INCOME OF RS. 35,12,691/- AND FURTH ER ALLOWED DEDUCTION U/SEC24 OF THE ACT @ 30% OF NET R ENTAL INCOME AND MADE AN ADDITION OF RS. 24,58,884/- UND ER THE HEAD INCOME FROM HOUSE PROPERTY AND PASSED THE ORDE R U/S 143(3) OF THE ACT DATED 01.11.2016. 4. AGGRIEVED BY THE ORDER, THE ASSESSEE HAS FILED THE APPEAL WITH THE CIT (APPEALS), WHERE AS THE LD.CIT (A) CONSIDERED THE GROUNDS OF APPEAL, SUBMISSIONS OF TH E ASSESSEE, FINDINGS OF THE AO AND OBSERVED THAT ANNU AL LET OUT VALUE CALCULATED BY THE AO IS UPHELD AND DISMIS SED THE ASSESSEES APPEAL. AGGRIEVED BY THE ORDER OF THE CI T (A), THE ASSESSEE HAS FILED THE APPEAL WITH THE HONBLE TRIB UNAL. ITA NO . 1056/MUM/2019 MANJU LALIT SINGHVI - 4 - 5. AT THE TIME OF HEARING, THE LD. AR OF THE ASSESS EE SUBMITTED THAT THE LD. CIT (A) HAS ERRED IN CONFIRM ING THE ACTION OF THE A.O. THE LD. AR REFERRED TO THE OBSE RVATIONS OF THE LD. CIT (A) AT PAGE 5 PARA 5.3.2 OF THE ORDER A ND EMPHASIZED THAT THE PROPERTY WAS VACANT AND REQUIRE D REPAIRS AND HENCE COULD NOT BE LET OUT. FURTHER THE INCOME TAX DEPARTMENT HAS NOT CONSIDERED THE MUNICIPAL RAT EABLE VALUE (MRV) WHILE CALCULATING DEEMED LET OUT VALUE OF THE PROPERTY.THE LD.AR SUPPORTED HIS ARGUMENTS WITH ELA BORATE SUBMISSIONS ON THE FACTS AND RELIED ON THE JUDICIAL DECISIONS AND WRITTEN SUBMISSIONS AND PRAYED FOR AL LOWING THE APPEAL. CONTRA, THE LD.DR SUPPORTED THE ORDER O F THE LD. CIT (A). 6. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE SOLE MATRIX OF THE DISPUTED ISSUE IS IN RESPECT CALCULATION OF DEEMED LET OUT VALUE OF T HE VACANT PROPERTY AND THE APPLICABILITY OF PROVISIONS OF SEC TION 23 (1) OF THE ACT, WERE THE VACANT PROPERTY IS UNDER RENO VATION AND REPAIR WORKS.. THE LD.AR SUBMITTED THAT THE A.O . HAS WRONGLY DETERMINED THE DEEMED LET-OUT VALUE OF THE VACANT PROPERTY U/SEC 23 (1) (C) OF THE ACT IGNORING THE F ACTUAL ASPECTS OF RENOVATION AND REPAIR WORKS UNDERTAKEN I N THE F.Y.2013-2014.THE LD.AR EMPHASIZED THAT THE SAID ITA NO . 1056/MUM/2019 MANJU LALIT SINGHVI - 5 - PROPERTY WAS UNDER TENANCY FOR 10 YEARS AND RENTAL INCOME WAS DISCLOSED UNDER INCOME FROM HOUSE PROPERTY IN T HE EARLIER ASSESSMENT YEARS AND FILLED THE INCOME TAX RETURNS. IN THE F.Y.2013-14 THE PROPERTY WAS VACATED BY TH E TENANT AND DUE TO SEVERE DAMAGES TO PROPERTY, THE ASSESSEE HAS TO UNDERTAKE HEAVY REPAIR WORKS AND IN SUCH CIRCUMSTAN CES THE ASSESSEE COULD NOT FIND SUITABLE TENANT. THE LD .AR REFERRED TO THE PROPOSALS RECEIVED FROM THE PARTIES FOR LEASE OF PROPERTY WITH CONDITIONS AT PAGE 24 AND 25 OF TH E PAPER BOOK .THE LD.AR DEMONSTRATED THE RATEABLE VALE CE RTIFICATE FROM MUNICIPAL CORPORATION MUMBAI (M.C.G.M) AT PAG E 26 TO 34 OF THE PAPER BOOK AND ARGUED THAT THE ASSESS ING OFFICER HAS TOTALLY IGNORED THIS CERTIFICATE.THE AS SESSEES INTENTIONS WAS ALWAYS TO LET OUT THE PROPERTY BU T THE FACT REMAINS THAT THE ASSESSEE HAS TO UNDERTAKE THE REP AIR WORKS WHICH CANNOT BE COMPLETED IN A SHORT PERIOD. THE LD. AR OF THE ASSESSEE REFERRED TO THE SUBMISSIONS MA DE BEFORE THE A.O. AT PAGE 11 TO 23 OF THE PAPER BOOK. WE ON PERUSAL OF THE ASSESSMENT ORDER, DO NOT FIND ANY FINDINGS OF THE A.O. ON THE SUBMISSIONS AND RATEABLE CERTIFI CATE ISSUED THE MUNICIPAL CORPORATION MUMBAI. WE ARE OF THE SUBSTANTIATE VIEW THAT THE MAJOR FACTS WITH RESPECT TO DETERMINATION OF ANNUAL LET VALUE ARE OVER LOOKED .HENCE ITA NO . 1056/MUM/2019 MANJU LALIT SINGHVI - 6 - TO MEET THE ENDS OF JUSTICE, WE PROVIDE ONE MORE OPPORTUNITY TO THE ASSESSEE TO SUBSTANTIATE THE CAS E WITH THE RATEABLE VALUE CERTIFICATE AND EVIDENCES BEFO RE THE ASSESSING OFFICER. ACCORDINGLY, WE SET-ASIDE THE OR DER OF THE CIT(A) AND RESTORE THE DISPUTED ISSUE FOR LIMITED P URPOSE TO THE FILE OF THE ASSESSING OFFICER TO ADJUDICATE AF RESH. THE A.O. SHOULD PROVIDE ADEQUATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THE ASSESSEE SHOULD CO-OPERATE IN SUB MITTING THE INFORMATION IN THE PROCEEDINGS AND ALLOW THE G ROUNDS OF APPEAL OF THE ASSESSEE FOR STATISTICAL PURPOSES. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17.03.2021. SD/- SD/- (M. BALAGANESH) (PAVAN KUMAR GA DALE ) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED 17.03.2021 AK, PS ITA NO . 1056/MUM/2019 MANJU LALIT SINGHVI - 7 - / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. / THE CIT(A) 4. ( ) / CONCERNED CIT 5. !!' , $ % , / DR, ITAT, MUMBAI 6. &' ( ) / GUARD FILE. / BY ORDER, ! //TRUE COPY// / ( ASST. REGISTRAR) , / ITAT, MUMBAI