M/s Aristocrat Garments, Ludhiana V. ITO, Ludhiana

ITA 1244/CHANDI/2011

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 64078 (ITAT-CHANDIGARH)
• Duration Of Justice: 11 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2012
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 13-12-2012
• Assessment Year: 2005-2006
• Appeal Filed On: 27-12-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: J S NAGAR
• Keywords: Additional evidence
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL CHANDIGARH BENCH A, CHANDIGARH BEFORE SHRI T.R.SOOD, ACCOUNTANT MEMBER AND MS. SUSHMA CHOWLA, JUDICIAL MEMBER ITA NO. 1244/CHD/2012 (ASSESSMENT YEAR : 2005-06) M/S ARISTOCRAT GARMENTS VS. THE INCOME TAX OFFICE R, CHAUARA BAZAR, WARD II(1), LUDHIANA. LUDHIANA. PAN: AAIFA7667B (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI ASHWANI KUMAR RESPONDENT BY : SHRI J.S.NAGAR, DR DATE OF HEARING : 13.12.2012 DATE OF PRONOUNCEMENT : 18.12.2012 O R D E R PER SUSHMA CHOWLA, J.M, : THE APPEAL FILED BY THE ASSESSEE IS AGAINST THE ORD ER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-II, LUDHIANA D ATED 17.11.2011 RELATING TO ASSESSMENT YEAR 2005-06 AGAINST THE ORD ER PASSED U/S 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT). 2. THE ONLY GROUND OF APPEAL RAISED BY THE ASSESSEE READS AS UNDER: 1. THAT ORDER PASSED U/S 250(6) IS AGAINST LAW AND FAC TS ON THE FILE IN AS MUCH AS THE LD. CIT(A) WAS NOT JUSTI FIED TO ARBITRARILY UPHOLD THE ADDITION OF RS.4,09,500/- TO THE RETURNED INCOME REPRESENTING ALLEGED NOTIONAL VALUE OF THE PROPERTY LET OUT BY THE APPELLANT. 2. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE YEA R UNDER CONSIDERATION THE ASSESSEE HAD SHOWN RENTAL VALUE O F THE PROPERTY MEASURING 1152 SQ.FT. AT LOWER GROUND FLOOR, FLAT N O.I, SURYA TOWERS, LUDHIANA AT RS.15,000/- PER ANNUM. THE SAID PROPER TY WAS LET OUT BY THE ASSESSEE TO ITS SISTER CONCERN. THE ASSESSING OFFI CER DURING THE COURSE 2 OF ASSESSMENT PROCEEDINGS SOUGHT INFORMATION FROM M UNICIPAL CORPORATION, LUDHIANA IN WHICH IT WAS INFORMED THAT THE ANNUAL RENTAL VALUE OF THE PROPERTY NO.B-XIX-86/7A, THE MALL, LUD HIANA WAS RS.4,80,000/-. THE ASSESSING OFFICER WAS SHOW CAUS ED TO EXPLAIN AS TO WHY THE SAID VALUATION GIVEN BY THE MUNICIPAL CORPO RATION, LUDHIANA SHOULD NOT BE ADOPTED WHILE ASSESSING THE INCOME FR OM PROPERTY IN THE HANDS OF THE ASSESSEE. THE EXPLANATION OF THE ASSE SSEE WAS THAT THE SAID PROPERTY WAS OWNED BY ITS SISTER CONCERN M/S ARISTO CRAT GALLERY AND THE SAME WAS SITUATED AT UPPER GROUND FLOOR, WHEREAS TH E PROPERTY OF THE ASSESSEE WAS SITUATED AT LOWER GROUND FLOOR. THE A SSESSING OFFICER FURTHER MADE FIELD ENQUIRY THROUGH INSPECTOR AND IT WAS REPORTED THAT M/S ARISTOCRAT GALLERY, SISTER CONCERN OF THE ASSES SEE WAS OCCUPYING BOTH THE PREMISES AND THERE WAS ONLY ONE INLET TO T HE PREMISES FROM LOWER GROUND FLOOR. THE ASSESSING OFFICER IN VIEW OF THE PROVISIONS OF SECTION 23(1)(B) OF THE ACT DETERMINED THE VALUE OF PROPERTY AT RS.6 LACS I.E. RS.15,000/- RENT FOR A MONTH AND COMPUTED THE INCOME FROM PROPERTY. 3. BEFORE THE CIT (APPEALS) THE LEARNED A.R. FOR TH E ASSESSEE CLAIMS TO HAVE FILED A LETTER FROM THE MUNICIPAL CORPORATI ON, LUDHIANA IN WHICH IT WAS INTIMATED THAT THE ANNUAL RENTAL VALUE OF TH E PROPERTY NO.B-XIX- 86/7A HAD BEEN FIXED @ RS.72,000 VIDE ORDER DATED 1 0.7.2001. THE CIT (APPEALS), HOWEVER DISMISSED THE APPEAL OF THE ASSE SSEE UPHOLDING THE ORDER OF THE ASSESSING OFFICER. 4. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF T HE CIT (APPEALS). THE LEARNED A.R. FOR THE ASSESSEE MADE REFERENCE TO THE LETTER ISSUED BY THE MUNICIPAL CORPORATION PLACED AT PAGE 5 OF THE P APER BOOK AND ALSO REFERRED TO THE REMAND REPORT FILED BY THE ASSESSIN G OFFICER BEFORE THE CIT (APPEALS) PLACED AT PAGE 6 OF THE PAPER BOOK. 3 5. THE LEARNED D.R. FOR THE REVENUE PLACED RELIANCE ON THE ORDERS OF THE AUTHORITIES BELOW AND POINTED OUT THAT THE RENT OF RS.15,000/- PER ANNUM WAS ON THE LOWER SIDE. 6. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS IN RELATION TO THE COMPUTATION OF THE RENTAL VALUE OF THE PROPERTY OWNED BY THE ASSES SEE. THE ASSESSEE WAS THE OWNER OF THE PROPERTY AT LOWER GROUND FLOOR, FL AT NO.I, SURYA TOWER, LUDHIANA MEASURING 1152 SQ.FT. THE ASSESSEE HAD LE T OUT THE SAID PROPERTY TO ITS SISTER CONCERN M/S ARISTOCRAT GALLE RY AT ANNUAL RENT OF RS.15,000/-. AS AGAINST THE SAME, THE ANNUAL RENTA L VALUE WAS ADOPTED BY THE ASSESSING OFFICER AT RS.6 LACS ON THE BASIS OF INFORMATION RECEIVED FROM THE MUNICIPAL VALUATION. THE LEARNED A.R. FOR THE ASSESSEE BEFORE US HAS PLACED RELIANCE ON THE LETTE R DATED 22.10.2009 ISSUED BY THE HOUSE TAX SUPERINTENDENT (ZONE-D), MU NICIPAL CORPORATION, LUDHIANA WHICH IS IN RESPECT OF HOUSE TAX FOR PROPERTY NO.B-XIX-86/7A IN WHICH IT HAS BEEN REPORTED THAT T HE ANNUAL RENTAL VALUE OF THE SAID PROPERTY HAD BEEN FIXED AT RS.72, 000/- ON WHICH ANNUAL TAX WAS RS.9720/-. THE PLEA OF THE ASSESSEE IS THA T THE SAID DOCUMENT WAS PLACED AS ADDITIONAL EVIDENCE BEFORE THE CIT (A PPEALS), WHICH WAS CONFRONTED TO THE ASSESSING OFFICER WHO HAD VIDE HI S REMAND REPORT ADMITTED TO TAKE THE SAID ADDITIONAL EVIDENCE ON RE CORD. THE COPY OF THE LETTER ISSUED BY THE MUNICIPAL CORPORATION DATED 22 .10.2009 IS PLACED AT PAGE 5 OF THE PAPER BOOK AND COPY OF REMAND REPORT IS PLACED AT PAGE 6 OF THE PAPER BOOK. THE PERUSAL OF THE ORDER OF THE CIT (APPEALS) REFLECTS NO REFERENCE TO THE ABOVE ADDITIONAL EVIDE NCE FILED BY THE ASSESSEE. FURTHER IT IS NOT CLEAR WHICH PROPERTY I S OWNED BY THE ASSESSEE I.E. EITHER IT IS NO.B-XIX-86/7 OR B-XIX-86/7A. I N THE ENTIRETY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN VIEW OF THE ADDITIONAL 4 EVIDENCE FURNISHED BY THE ASSESSEE WE ARE OF THE VI EW THAT THE MATTER NEEDS TO BE RELOOKED AT THE LEVEL OF ASSESSING OFFI CER. ACCORDINGLY, WE RESTORE THE ISSUE BACK TO THE FILE OF THE ASSESSING OFFICER TO REDECIDE THE SAME IN LINE WITH THE EVIDENCE FILED BY THE ASS ESSEE. IN CASE THE ASSESSEE IS ABLE TO LEAD EVIDENCE THAT THE MUNICIPA L VALUATION OF THE PROPERTY OWNED BY IT IS ON THE LOWER SIDE THEN SUCH MUNICIPAL VALUE IS TO BE ADOPTED AS RATEABLE VALUE FOR COMPUTING THE INCO ME FROM HOUSE PROPERTY IN THE HANDS OF THE ASSESSEE IN VIEW OF TH E PROVISIONS OF SECTION 23(1)(B) OF THE ACT. 7. THE LEARNED A.R. FOR THE ASSESSEE FURTHER STATED THAT THE ANNUAL RENT RECEIVED BY THE ASSESSEE WAS RS.18,000/- AND N OT RS.15,000/- AS REPORTED IN THE ASSESSMENT ORDER AND ALSO IN THE OR DER OF CIT (APPEALS). THE ASSESSING OFFICER SHALL VERIFY THE CLAIM OF THE ASSESSEE AND RE- ADJUDICATE THE ISSUE IN ACCORDANCE WITH LAW AFTER A FFORDING REASONABLE OPPORTUNITY OF HEARING TO THE ASSESSEE. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 18 TH DAY OF DECEMBER, 2012. SD/- SD/- (T.R.SOOD) (SUSHMA CHOWLA) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 18 TH DECEMBER, 2012 *RATI* COPY TO: THE APPELLANT/THE RESPONDENT/THE CIT(A)/TH E CIT/THE DR. ASSISTANT REGISTRAR, ITAT, CHANDIGARH 5