KAJOL VISHAL DEVGAN, MUMBAI V. ACIT 16(1), MUMBAI

ITA 1132/MUM/2018

• Counselvise Citation: [2019] 118 COUNSELVISE.COM (IT) 3197 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2014-2015
• Appeal Filed On: 27-02-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard; Fair market value
• Section: 143(3); 10

Judgement Text

H IN THE INCOME TAX APPELLATE TRIBUNAL H BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER ./ I.T.A. NO.1132/ MUM/2018 ( / ASSESSMENT YEAR : 2014 - 15) SMT. KAJOL VISHAL DEVGAN 5/6, SHEETAL APARTMENT, OPP. CHANDAN CINEMA, JUHU, MUMBAI 400049 / V. ACIT - 16(1), AAYAKAR BHAVAN M K ROAD, MUMBAI - 400020 ./ PAN : AAHPM3098F ( / APPELLANT ) .. ( / RESPONDENT ) ASSESSEE BY: SHRI. RUTURAJ H. GURJAR REVENUE BY: SHRI. MANOJ KUMAR SINGH, DR / DATE OF HEARING : 26.0 2 .2019 / DATE OF PRONOUNCEMENT : 26 .02.2019 / O R D E R PER RAMIT KOCHAR, ACCOUNTANT MEMBER: THIS APPEAL, FILED BY ASSESSEE, BEING ITA NO. 1132/MUM/2018, IS DIRECTED AGAINST APPELLATE ORDER DATED 23.01.2018 IN APPEAL NO. CIT( A) - 4/IT - 262/ACIT - 16(1)/2016 - 17, PASSED BY LEARNED COMMISSIONER OF INCOME TAX (APPEALS) - 4 , MUMBAI (HEREINAFTER CALLED THE CIT(A)), FOR ASSESSMENT YEAR 2014 - 15 , THE APPELLATE PROCEEDINGS HAD ARISEN BEFORE LEARNED CIT(A) FROM THE ASSESSMENT ORDER DATED 14. 1 2.2016 PASSED BY LEARNED ASSESS ING OFFICER (HEREINAFTER CALLED THE AO) U/S 143(3) OF THE INCOME - TAX ACT, 1961 (HEREINAFTER CALLED THE ACT) FOR AY 2014 - 15 . I.T.A. NO. 1132/MUM/2018 2 2. THE GROUNDS OF APPEAL RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE INCOME - TAX APPELLATE TRIBUNAL, MUMBAI (HER EINAFTER CALLED THE TRIBUNAL) READ AS UNDER: - ON FACTS AND IN CIRCUMSTANCES OF THE CASE AND IN LAW THE COMMISSIONER OF INCOME TAX (APPEALS) (CIT (A)} HAS ERRED IN: I) REJECTING THE APPELLANT'S CLAIM IN RESPECT OF VA CANCY ALLOWANCE AS MADE U/S.23(1 )( C) OF THE INCOME TAX ACT, IN RESPECT OF THE PROPERTY SITUATED AT UNIT NOS.407, 408, 409, 410 & 411 STANDFORD PLAZA, PLOT NO.B - 65, SURVEY NO.717 OF LINK R OAD, ANDHERI (WEST), MUMBAI 400 069 (MAHARASHTRA). THE APPELLANT BE GRANTED THE BENEFIT OF VACANCY ALLOW ANCE IN RESPECT OF THE ABOVE PROPERTY. II) UPHOLDING THE ALV AT RS.17,96,225/ - AS DETERMINED BY THE ASSESSING OFFICER (AO) IN RESPECT OF THE PROPERTY SITUATED AT UNIT NOS.407, 408, 409, 410 & 411 STANDFORD PLAZA, PLOT NO.B - 65, SURVEY NO.717 OF LINK ROAD , ANDHERI (WEST), MUMBAI 400 069 (MAHARASHTRA). IN DOING SO THE CIT(A) FURTHER ERRED IN NOT ACCEPTING THE ASSESSEE'S PLEA THAT THE MUNICIPAL RATABLE VALUE AS DETERMINE D BY THE LOCAL AUTHORITIES, AT RS.1,23,250/ - , IF AT AL L BE CONSIDERED THE ALV U/S.23(1 )( A) OF THE INCOME TAX ACT. THE APPELLANT RESERVES HER RIGHT TO ADD TO, ALTER, AMEND, MODIFY OR DELETE ANY OF THE GROUNDS TAKEN IN THIS APPEAL. THE GROUNDS TAKEN ABOVE ARE WITHOUT PREJUDICE TO EACH OTHER. 3. THE ASSESSEE IS A CINE A RTIST AND HAS DECLARED I N COME FRO M HOUSE PROPERTY, INCOME FROM BUSINESS & PROFESSION, INCOME FROM LONG TERM AND SHORT TERM CAPITAL G AIN S AND I NCOME FROM OTHER S OURCES. IT WAS OBSERVED BY THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S. 143 (3) R.W.S. 143(2 ) OF THE INCOME - TAX ACT,1961 THAT IN RESPECT OF COMMERCIAL P ROPERTY SITUATED AT STANDFORD P LAZA , THE ASSESSEE HAS SHOWN INCOME FROM HOUSE PROPERTY AT ( - ) RS. 51,700/ - AFTER OFFERING INCOME OF RS. 1 ,23,250/ - AND CLAIMING DEDUCTION OF P ROPERTY T AX OF RS. 1,74,950/ - , WHICH INCOME FROM HOUSE PROPERTY IN THE OPINION OF THE A O WAS MUCH LESS THAN MARKET RENT IN THE AREA OF POSH ANDHERI SUBURB, MUMBAI WHERE THE AFORESAID PROPERTY IS LOCATED. THE AO APPLIED THE FAIR MARKET VALUE OF 8% OF THE INVESTMENTS I.T.A. NO. 1132/MUM/2018 3 IN THE SAID PROPERTY TO THE TUNE OF RS.2,24,52,80 8/ - TO COMPUTE ALV OF THE AFORESAID COMMERCIAL PROPERTY SITUATED AT STANDFORD PLAZA , AS UNDER: - GROSS ANNUAL VALUE OF THE PROPERTY RS. 17,96,225/ - (8% OF CO S T RS. 2,24,52,808/ - ) LESS:30 % U/S. 24(A) RS. 5,38,868/ - --------------------- TAXABLE INCOME RS. 12,57,357/ - THE AO RELIED UPON THE DECISION OF HONBLE ALLAHABAD HIGH COURT IN THE CASE OF RADHAD EVI DALMIYA V. CIT (1980) 125 I TR 134 (ALL. HC) AND DECISION OF HONBLE GUJARAT HIGH COURT IN THE CASE OF SHRI BIPINBHAI VADILAL FAMILY TRUST NO 1 V. CI T (1994) 208 ITR 1005(GUJ.) TO COMPUTE THE ABOVE INCOME FROM HOUSE PROPERTY , VIDE ASSESSMENT ORDER DATED 14.12.2016 PASSED BY THE AO U/S 143(3) OF THE 1961 ACT . 4. AGGRIEVED BY THE ASSESSMENT ORDER DATED 14.12.2016 PASSED BY THE AO U/S 143(3) OF THE 1961 ACT, T HE ASSESSEE FILED FIRST APPEAL WITH LD. CIT(A) WHO FOLLOWED THE DECISION IN ASSESSEE S OWN CASE FOR AY 2013 - 14 AND PARTLY ALLOWED THE CLAIM OF T HE ASSESSEE , BY HOLDING AS UNDER VIDE APPELLATE ORDER DATED 23.01.2018 PASSED BY LEARNED CIT(A) : - 8.3 I HAVE CAREFULLY CONSIDERED THE FACTS OF THE CASE, ORAL CONTENTIONS AND WRITTEN SUBMISSIO N OF THE ASSESSEE DISCUSSION OF TH E AO IN THE ASSESSMENT ORD ER AND MATERIAL AVAILABLE ON RECORD. THE VERY SAME ISSUE HAS BEEN DECIDED BY MY LD PREDECESSOR IN APPELLANTS OWN CASE FOR A YR 2013 - 14 AS UNDER : I HAVE CONSIDERED ISSUE UNDER APPEAL CAREFULLY. IT IS VERY EVIDENT THAT ASSESSEE HAS GOT FIVE PROPERTIES O UT OF WHICH, PROPERTY SITUATED AT STANDFORD PLAZA IS COMMERCIAL PROPERTY. EARLIER, APPELLANT WAS SHOWING RENTAL INCO ME TO THE EXTENT OF RS.15,00,000 / - TO RS.16,20,941/ - IN F Y 2012 - 13, APPELLAN T H AS NOT SHOWN ANY INCOME. SIMILARLY NIL INCOME HAS BEEN SHO WN IN THIS YEAR HENCE ASSESSING OFFICER IS DUTY HOUND TO ESTIMATE ANNUAL LETTING V ALUE OF THIS PROPERTY . I T IS PERTINENT TO MENTION THAT APPELLANT HAS NOT DEMONSTRATED ANY EVI DENCE THAT ATTEMPT WAS MADE TO R ENT OUT THE PROPERTY. FURTHER, THE STATEMENT THAT FOR REASONS BEYOND CONTROL THIS PROPERTY WAS NOT LET OUT IS FOUND TO BE UNSUBSTANTIATED ONE. THEREFORE, VARIOUS ARGUMENT ADVANCED BY LD AUTHORIZED REPRESENTATIVE ARE NOT APPLICABLE WHEN PROPERTY WAS IN WORK ING CONDITION, IT WAS TO BE LET OUT. IF IT WAS NOT LET OUT, THEN ANNUAL LETTING VALUE HAS TO BE ESTIMATED. WHEN PROPERTY UNDER REFERENCE IS NOT COVERED UNDER RENT CONTROL ACT, FAIR RENT OF I.T.A. NO. 1132/MUM/2018 4 PROPERTY HAS TO BE TAKEN AS ANNUAL VALUE WHICH IS TO BE DETERMINED ON THE BASIS OF FACTS OR MATERIAL ON RECORD VIDE WOODLAND ASSOCIATES (P) LTD. VS. ITO5(3)(4) (2013) 29 TAXMAN.COM216 (MUM.)(TRIB.). IN THE CASE OF C.I.T DELHI CENTRAL 3 VS. MONIKUMAR SU BBA (2011) 10 TAXMANN.COM 795 LTAT(DELHI )(FULL BENCH), IT IS HELD THAT IF RATEABLE VALUE UNDER MUNICIPAL LAW DOES NOT REPRESENT CORRECT FAIR RENT THEN ASSESSING OFFICER CAN DETERMINED ANNUAL LETTING VALUE ON THE BASIS OF MATERIAL OR EVIDENCES ON RECORD . HERE IN THIS CASE, IT IS ADMITTED FACT THAT PROPERTY WAS BEING RENTE D OU T IN F.Y 2008 - 09 FOR RS. 15,50,003/ - IN F.Y 2009 - 10 FOR RS. 15,37 500/ - . IN F.Y. 2010 - 11 FOR RS 16,20,941/ - , HENCE THERE IS MATERIAL FACTS AND EVIDENCES ON RECORD THAT IN EARLIER YEAR PROPERTY WAS BEING RENTED OUT FOR MORE THAN RS. 16.00.000/ - ANNUALLY. I N THIS YEAR, ASSESSEE HAS NOT SHOWN RENT WITHOUT ANY VALID REASON THEREFORE BY VIRTUE OF SECTION 22 OF I. T. ACT 1961, ASSESSING OFFICER HAS TO DETERMINED ANNUAL VALUE U/S 23(1)(A) WHICH PROVIDES THAT ANNUAL LETTING VALUE SHOULD BE SUM FOR WHICH THE PROPER TY MIGHT REASONABLY BE EXPECTED TO LET OUT FOR YEAR TO YEAR LD. ASSESSING OFFICER HAS ESTIMATED 8% OF INVESTMENT AND HAS CALCULATED GROSS ANNUAL VALUE AT RS 17,96,225/ - WHICH IS MOST REASONABLE, BECAUSE OF THE FACT THAT SUCH COMMERCIAL PROPERTIES SHOWN AS OFFICE PREMISES NO.407, 408, 409. 410 AND 411 OF STANDFORD P LAZA OFF. LINK ROAD ANDHERI(W), MUMABI - 400069 WAS RENTED IN F.Y 2015 - 16 FOR RS.18.69.000/ - AND F.Y. 2010 - 11 FOR RS.16,20,941/ - . THUS, ESTIMATION OF ANNUAL LETTING VALUE OF RS. 17.96.225/ - IS BASE D ON REASONABLE MATERIAL. SUCH FINDING OF ASSESSING OFFICER GET SU PPORT FROM DECISION OF HONBLE ITAT IN CASE OF EMTICI ENGINEERING LTD VS ACIT( 1991) 58 TTJ 27 (AHMEDABAD). ITO VS CHEM MECH PVT. LT D. (2002) 83 ITD 427 (MUM) (ITA T) AND SHRI BIPINBHAI VADILA L FAMILY TRUST NO 1 VS CT T (1994) 208 ITR 1005(GUJ.) THUS, TH E ESTIMATION OF ANNUAL LETTING VALUE OF COMMERCIAL PROPERTY AT RS. 17,96,225/ - IS SUSTAINED. 5.3 AS REGARDS CONTENTION THAT APPELLANT MAY BE GIVEN VACANCY ALLOWANCE IT IS PERTINENT MENTION THAT AS PER LAW U/S 23(1)(C) VACANCY ALLOWANCE CAN ONLY BE GIVEN WHERE PROPERTY IS NOT LET OUT AND IS VACANT DURING THE YEAR THEREFORE, THERE IS NO QUESTION OF GRANTING VACANCY ALLOWANCE U/S. 23(1)(C). THIS FINDING IS B OSED ON DECISION OF HONBLE A.P HIGH COURT IN THE CASE OF VIVEK JAIN VS. ACIT 202 TAXMAN 499/63 D TR 174(AP). THUS BECAUSE OF FACTS OF THE CASE, NONE OF T HE DECISIONS RELIED UPON BY APPELLANT IS APPLICABLE. IT IS ALSO WORTHWHILE LO MENTION THAT THIS PROPERTY UNDER REFERENCE IS COMMERCIAL PROP ERTY SITUATED IN COMMERCIAL AREA OF ANDHERI WHICH CANNOT BE EQUIVATED WITH RESIDENTIAL PROPERTY, THE LD. AUTHORIZED REPRESENTATIVE HAS RELIED UPON DECIS ION M THE CASE OF CIT VS SMT PRA BHAH ATI BANSALI (1983) 141 ITR 419 (CA L), WHICH GOES AGAINST THE APPELLA NT BECAUSE IN THAT CASE, IT HAS BEEN HELD THAT INCOME FROM HOUSE PROPERTY MUST BE COMPUTED ON THE BASIS OF SUM WHICH MIGHT REASONABLE BE EXPECTED TO LET YEAR TO YEAR. WHERE MARKET VALUE OR RATEABLE VALUE IS BASED ON THE FACTS ON RECORD AS POINTED OUT HEREI N ABOVE, OTHER DECISIONS REFERRED TO BY LD. AUTHORIZED REPRESENTATIVE ARE NOT FOUND APPLICABLE. AS REGARDS REQUEST THAT WHILE DETERMINING ANNUAL LETTING VALUE. ASSESSING OFFICER HAS TO ALLOW MUNICIPAL TAXES OF RS. 3,83.462/ - THIS CLAIM APPEARS TO BE CORREC T. LD. AUTHORIZED REPRESENTATIVE HAS SUBMITTED COPY OF THE TAX BILL. ASSESSING OFFICER IS THEREFORE DIRECTED TO ALLOW THE MUNICIPAL TAXES, WHILE DETERMINING ANNUAL LETTING VALUE OF RS. 17,96,225/ - AFTER VERIFICATION. GROUND NO. 3 IS PARTLY ALLOWED. I.T.A. NO. 1132/MUM/2018 5 AS THE ISSUE UNDER CONSIDERATION IS IDENTICAL AND FACTS ARE SAME, FOLLOWING THE PRINCIPLES OF CONSISTENCY, THE DETERMINATION OF ALV BY A.O AT RS17,96,225/ - IS SUSTAINED AND A.O IS DIRECTED TO ALLOW THE MUNICIPAL TAXES WHILE DETERMINING INCOME FROM HOUSE PROPERTY BY ADOPTING ALV AT RS 17,96,225/ - AFTER DUE VERIFICATION. THUS, THIS GROUND IS PARTLY ALLOWED. 5. AGGRIEVED BY THE APPELLATE ORDER DATED 23.01.2018 PASSED BY LEARNED CIT(A), THE ASSESSEE FILED AN APPEAL BEFORE THE TRIBUNAL. A T THE OUTSET LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ISSUE IS SQUARELY COVERED BY THE DECISION OF THE TRIBUNAL IN ASSESSEE S OWN CASE WHEREIN IDENTICAL GROUNDS WERE RAISED BY THE ASSESSEE IN INCOME TAX APPEAL FOR AY 2013 - 14 IN ITA NO. 1702/M UM / 2017 , WHEREIN THE TRIBUNAL VIDE ORDERS DATED 12.10.2018 FOR AY 2013 - 14 IN ITA NO. 1702/MUM/2017 H AD SET ASIDE AND RESTORED THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION IN ACCORDANCE WITH DIRECTION S GIVEN IN THE AFORE SAID ORDER BY THE TRIBUNAL , AS UNDER: - AFORESAID APPEAL HAS BEEN FILED BY THE ASSESSE E CHALLENGING THE ORDER DATED 5 TH DECEMBER 2016, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 4, MUMBAI, FOR ASSESSMENT YEAR 2013 14. 2. GROUNDS RAISED BY THE ASSESSEE ARE AS UNDER: 1. REJECTING THE AP PELLANT'S CLAIM IN RESPECT OF VACANCY ALLOWANCE AS MADE U/S.23(1)(C) OF THE INCOME TAX ACT, IN RESPECT OF THE PROPERTY SITUATED AT UNIT NOS.407, 408, 409, 410 & 411 STANDFORD PLAZA, PLOT NO.B - 65, SURVEY NO.717 OF LINK ROAD, ANDHERI (WEST), MUMBAI 400 069 (MAHARASHTRA). THE APPELLANT BE GRANTED THE BENEFIT OF VACANCY ALLOWANCE IN RESPECT OF THE ABOVE PROPERTY. 2. UPHOLDING THE ALV AT RS.17,96,225/ - AS DETERMINED BY THE ASSESSING OFFICER (AO) IN RESPECT OF THE PROPERTY SITUATED AT UNIT NOS.407, 408, 409, 41 0 & 411 STANDFORD PLAZA, PLOT NO.13 - 65, SURVEY NO.7 17 OF LINK ROAD, ANDHERI (WEST), MUMBAI 400 069 (MAHARASHTRA). IN DOING SO THE CIT(A) FURTHER ERRED IN NOT ACCEPTING THE ASSESSEE'S PLEA THAT THE MUNICIPAL RATABLE VALUE AS DETERMINED BY THE LOCAL AUTHORI TIES, AT RS. 1,23,250/ - , IF AT ALL BE CONSIDERED THE ALV U/S.23(1)(A) OF THE INCOME TAX ACT. 3. BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL. FOR THE ASSESSMENT YEAR UNDER DISPUTE, THE ASSESSEE FILED HER RETURN OF INCOME ON 30TH SEPTEMBER 2013, DECLARI NG TOTAL INCOME OF RS. 10,03,14,580. DURING THE ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER WHILE VERIFYING THE RETURN OF INCOME ALONG WITH COMPUTATION OF INCOME FILED BY THE ASSESSEE NOTICED THAT, THOUGH, IN I.T.A. NO. 1132/MUM/2018 6 THE BALANCE SHEET THE ASSESSEE HAS SHOWN FIVE PROPERTIES, HOWEVER, SHE HAS OFFERED INCOME UNDER THE HEAD HOUSE PROPERTY IN RESPECT OF FOUR PROPERTIES ONLY. HE NOTICED THAT THE ASSESSEE HAS NOT SHOWN ANY INCOME IN RESPECT OF COMMERCIAL PROPERTY AT STANFORD PLAZA. WHEN THE ASSESSING OFFICER CALLED UPON THE ASSESSEE TO EXPLAIN WHY ANNUAL LETTABLE VALUE (ALV) SHOULD NOT BE COMPUTED BY TREATING THE PROPERTY AS DEEMED TO HAVE BEEN LET OUT, IT WAS SUBMITTED BY THE ASSESSEE THAT THE PROPERTY REMAINED VACANT DURING THE FINANCIAL YEAR ENDING MARCH 2013, MARCH 2 014 AND MARCH 2015. IT WAS SUBMITTED, THE PROPERTY WAS SUBSEQUENTLY LET OUT IN FINANCIAL YEAR 2015 16. THUS, IT WAS SUBMITTED, NO HOUSE PROPERTY INCOME SHOULD BE COMPUTED IN RESPECT OF THE SAID PROPERTY. HOWEVER, THE ASSESSING OFFICER DID NOT FIND MERIT IN THE SUBMISSIONS OF THE ASSESSEE. REFERRING TO THE DECISION OF THE HON'BLE ALLAHABAD HIGH COURT IN RADHA DEVI DALMIA V/S CIT, 125 ITR 134 (ALL.), THE ASSESSING OFFICER OBSERVED THAT ALV CAN BE DETERMINED AS A PERCENTAGE OF INVESTMENT IN THE PROPERTY. ACCOR DINGLY, HE ESTIMATED THE ALV OF THE PROPERTY AT 8% OF THE BOOK VALUE SHOWN AT RS. 2,24,52,808, AND ACCORDINGLY, DETERMINED THE GROSS ANNUAL VALUE OF THE PROPERTY AT RS. 17,96,225. AFTER ALLOWING DEDUCTION UNDER SECTION 24(A) OF THE INCOME TAX ACT, 1961 (FO R SHORT THE ACT), HE ADDED BACK AN AMOUNT OF RS. 12,57,357 UNDER THE HEAD INCOME FROM HOUSE PROPERTY. BEING AGGRIEVED OF THE AFORESAID ADDITION, THOUGH, THE ASSESSEE FILED AN APPEAL BEFORE THE LEARNED COMMISSIONER (APPEALS), HOWEVER, HE ALSO SUSTAINED T HE ADDITION MADE BY THE ASSESSING OFFICER. 4. BEFORE THE LEARNED COMMISSIONER (APPEALS) THE ASSESSEE ALSO PLEADED FOR VACANCY ALLOWANCE IN RESPECT OF THE SAID PROPERTY. HOWEVER, THE LEARNED COMMISSIONER (APPEALS) ALSO REJECTED ASSESSEES PLEA IN THAT REGA RD. 5. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED, DETERMINATION OF ALV @ 8% OF THE COST OF THE PROPERTY IS PURELY ON AD HOC BASIS HAVING NO SANCTITY AS IT IS NOT AS PER THE MARKET RATE. HE SUBMITTED, IN CASE OF CIT V/S TIP TOP TYPOGRAPHY, [2015] 368 ITR 330 (BOM.), THE HON'BLE JURISDICTIONAL HIGH COURT HAS HELD THAT THE ASSESSING OFFICER CANNOT DETERMINE THE ALV ON AD HOC BASIS WHICH CANNOT BE TREATED AS FAIR RENT AS PER MUNICIPAL RATABLE VALUE. HE FURTHER SUBMITTED, THE ASSESSEES CLAIM OF VACANCY A LLOWANCE UNDER SECTION 23(1)(C) OF THE ACT ALSO REQUIRES TO BE CONSIDERED PROPERTY. THEREFORE, HE SUBMITTED, ISSUES MAY BE RESTORED TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION. 6. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED UPON THE OBSERVATIONS OF THE LEARNED COMMISSIONER (APPEALS). 7. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, IN RESPECT OF COMMERCIAL PROPERTY AT STANFORD PLAZA, THE ASSESSEE DID NOT OFFER ANY RENTAL INCOME UN DER THE HEAD INCOME FROM HOUSE PROPERTY, SINCE, THE SAID PROPERTY WAS NOT LET OUT DURING THE RELEVANT PREVIOUS YEAR. HOWEVER, THE ASSESSING OFFICER COMPUTED NOTIONAL RENT UNDER SECTION 23(1)(A) OF THE ACT. WHILE DOING SO, THE ASSESSEE DETERMINED THE ALV @ 8% OF THE BOOK VALUE OF THE PROPERTY. THE AFORESAID METHODOLOGY APPLIED BY THE ASSESSING OFFICER IS PURELY ON ESTIMATE OR AD HOC BASIS WITHOUT HAVING ANY CONNECTION TO THE FAIR RENT, THEREFORE, CANNOT BE SUSTAINED. THE HON'BLE JURISDICTIONAL HIGH COURT IN TIP TOP TYPOGRAPHY I.T.A. NO. 1132/MUM/2018 7 (SUPRA) HAS DISAPPROVED ADDITION OF NOTIONAL RENT ON SUCH ESTIMATE / AD HOC BASIS. THE SAME VIEW HAS AGAIN BEEN REITERATED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN PCIT V/S KARIA CAN CO. LTD., [2018] 96 TAXMANN.COM 193 (BOM.). THEREFO RE, THE ADDITION MADE BY THE ASSESSING OFFICER TO THE INCOME FROM HOUSE PROPERTY AND SUSTAINED BY THE LEARNED COMMISSIONER (APPEALS) CANNOT BE UPHELD. THEREFORE, WE RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION KEEPING IN VIEW THE DEC ISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT REFERRED TO ABOVE. WHILE DOING SO, THE ASSESSING OFFICER IS ALSO DIRECTED TO EXAMINE ASSESSEES CLAIM OF VACANCY ALLOWANCE UNDER SECTION 23(1)(C) OF THE ACT AND IN ACCORDANCE WITH LAW. NEEDLESS TO SAY, ASSESS ING OFFICER MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUES. WITH THE AFORESAID OBSERVATIONS, GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. 6. THE LD . DR FAIRLY A G R E E D THAT THE ISSUE IS COVERED BY THE DECISIO N OF TRIBUNAL IN ASSESSES OWN CASE FOR AY 2013 - 14 VIDE ORDERS DATED 12.10.2018 IN ITA NO. 1702/MUM/2017 . 7. WE HAVE CONSIDERED RIVAL CONTENTIONS AND PERUSED THE MATERIAL ON RECORD INCLUDING ORDERS OF THE AUTHORITIES BELOW AND CITED CASE LAWS . W E HAVE OBSERVED THAT THE ASSESSEE I S CINE A RTIST AND HAS DECLARED INCOME FROM HOUSE PROPERTY, INCOME FROM BUSINESS & PROFESSION, INCOME FROM LONG TERM AND S HORT TERM CAPITAL G AIN S AND I NCOME FROM OTHER SOURCES . WE HAVE OBSERVED THAT THE ASSESSEE HAS SHOWN INCOME FROM HOUSE PROPERTY IN ITS RETURN OF INCOME FILED WITH REVENUE WITH RESPECT TO COMMERCIAL PROPERTY SITUATED AT STANDFORD PLAZA AT ( - ) RS. 51,700/ - AFTER OFFERING INCOME OF RS. 1,23,250/ - AND CLAIMED DEDUCTION OF PROPERTY TAX OF RS. 1,74,950/ - , WHILE AS P ER THE AO THE SAID ALV AS WAS DECLARED IN RETURN OF INCOME FILED WITH REVENUE IS MUCH LOWER THAN MARKET RENT OF SIMILAR PROPERTIES IN THE AREA OF POSH ANDHERI SUBURB, MUMBAI WHERE THE AFORESAID PROPERTY OF THE ASSESSEE IS LOCATED. THE AO APPLIED THE FAIR M ARKET VALUE OF 8% OF THE INVESTMENTS IN THE SAID PROPERTY TO THE TUNE OF RS.2,24,52,808/ - TO COMPUTE THE ALV , AS UNDER: - GROSS ANNUAL VALUE OF THE PROPERTY RS. 17,96,225/ - (8% OF CO S T RS. 2,24,52,808/ - ) LESS:30 % U/S. 24(A) RS. 5,38,868/ - --------------------- TAXABLE INCOME RS. 12,57,357/ - _____________ I.T.A. NO. 1132/MUM/2018 8 THE ASSESSMENT ORDER OF THE AO WAS UPHELD BY LEARNED CIT(A). T HE TRIBUNAL IN THE ASSESSEES OWN CASE HAS RESTORED THE MATTER TO THE FILE OF THE AO FOR FRESH ADJUDICATION OF ALV IN ACCORDANCE WITH RATIO OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF CIT V. TIPTOP TYPOGRAPHY (2014) 368 ITR 330(BOM.) AND KARIA CAN CO. LTD. (2018) 96 TAXMANN.COM 193(BOM. HC) . SIMILARLY FOR THE SECOND ISSUE ALSO, THE TRIBUNAL IN ASSESSEES OWN CASE FOR IMMEDIATELY PRECEDING YEAR HAD SET ASIDE THE ISSUE OF COMPUTATION OF VACANCY ALLOWANCE , BY HOLDING AS UNDER: - 7. WE HAVE CONSI DERED RIVAL SUBMISSIONS AND PERUSED MATERIALS ON RECORD. AS COULD BE SEEN FROM THE FACTS ON RECORD, IN RESPECT OF COMMERCIAL PROPERTY AT STANFORD PLAZA, THE ASSESSEE DID NOT OFFER ANY RENTAL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY, SINCE, THE SAID PROPERTY WAS NOT LET OUT DURING THE RELEVANT PREVIOUS YEAR. HOWEVER, THE ASSESSING OFFICER COMPUTED NOTIONAL RENT UNDER SECTION 23(1)(A) OF THE ACT. WHILE DOING SO, THE ASSESSEE DETERMINED THE ALV @ 8% OF THE BOOK VALUE OF THE PROPERTY. THE AFORESAID METH ODOLOGY APPLIED BY THE ASSESSING OFFICER IS PURELY ON ESTIMATE OR AD HOC BASIS WITHOUT HAVING ANY CONNECTION TO THE FAIR RENT, THEREFORE, CANNOT BE SUSTAINED. THE HON'BLE JURISDICTIONAL HIGH COURT IN TIP TOP TYPOGRAPHY (SUPRA) HAS DISAPPROVED ADDITION OF N OTIONAL RENT ON SUCH ESTIMATE / AD HOC BASIS. THE SAME VIEW HAS AGAIN BEEN REITERATED BY THE HON'BLE JURISDICTIONAL HIGH COURT IN PCIT V/S KARIA CAN CO. LTD., [2018] 96 TAXMANN.COM 193 (BOM.). THEREFORE, THE ADDITION MADE BY THE ASSESSING OFFICER TO THE IN COME FROM HOUSE PROPERTY AND SUSTAINED BY THE LEARNED COMMISSIONER (APPEALS) CANNOT BE UPHELD. THEREFORE, WE RESTORE THE ISSUE TO THE ASSESSING OFFICER FOR DE NOVO ADJUDICATION KEEPING IN VIEW THE DECISIONS OF THE HON'BLE JURISDICTIONAL HIGH COURT REFERRED TO ABOVE. WHILE DOING SO, THE ASSESSING OFFICER IS ALSO DIRECTED TO EXAMINE ASSESSEES CLAIM OF VACANCY ALLOWANCE UNDER SECTION 23(1)(C) OF THE ACT AND IN ACCORDANCE WITH LAW. NEEDLESS TO SAY, ASSESSING OFFICER MUST AFFORD REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUES. WITH THE AFORESAID OBSERVATIONS, GROUNDS ARE ALLOWED FOR STATISTICAL PURPOSES. RESPECTFULLY , FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE FOR IMMEDIATELY PRECEDING YEAR VIZ. AY 2013 - 14 IN ITA NO. 1702/MUM/2017 VIDE ORDERS DATED 12.10.2018 , WE RESTORE THE ISSUE S BACK TO THE FILE OF THE AO FOR F DE - NOVO ADJUDICATION IN ACCORDANCE WITH RATIO OF DECISION OF HONBLE BOMBAY HIGH COURT IN THE CASE OF TIPTOP TYPOGRAPHY(SUPRA) A ND KARIA CAN CO. LTD. (SUPRA ) AND I.T.A. NO. 1132/MUM/2018 9 BY FOLLOWING AFORESAID DECISION OF THE TRIBUNAL FOR AY 2013 - 14. WE ORDER ACCORDINGLY. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO. 1132/MUM/2018 FOR AY 2014 - 15 IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN C OURT ON 26 .02.2019. 26 .02.2019 S D / - S D / - (SAKTIJIT DEY) (RAMIT KOCHAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI, DATED: 2 6 .02.2019 NISHANT VERMA SR. PRIVATE SECRETARY COPY TO 1 . THE APPELLANT 2 . THE RESPONDENT 3 . THE CIT(A) CONCERNED, MUMBAI 4 . THE CIT - CONCERNED, MUMBAI 5 . THE DR BENCH, 6 . MASTER FILE // TUE COPY// BY ORDER DY/ASSTT. REGISTRAR ITAT, MUMBAI