Income Tax Officer Ward04(3)(2), Bangalore V. Sri K m Muniswamy Reddy , Bangalore

ITA 1294/BANG/2018

• Counselvise Citation: [2018] 125 COUNSELVISE.COM (IT) 1315 (ITAT-BANGALORE)
• Duration Of Justice: 4 month(s) 10 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 21-08-2018
• Assessment Year: 2013-2014
• Appeal Filed On: 20-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Tax effect

Judgement Text

ITA.1294/BANG/2018 PAGE - 1 IN THE INCOME TAX APPELLATE TRIBUNAL BENGALURU BENCH 'C', BENGALURU BEFORE SHRI. A. K. GARODIA, ACCOUNTANT MEMBER AND SHRI. LALIET KUMAR, JUDICIAL MEMBER I.T.A NO.1294/BANG/2018 (ASSESSMENT YEAR : 2013-14) INCOME-TAX OFFICER, WARD 4 (3)(2), BENGALURU .. APPELLANT V. SHRI K. M. MUNISWAMY REDDY, NO.85/24, 17 TH CROSS, 24 TH MAIN, 1 ST SECTOR, HSR LAYOUT, VANGANAHALLI, BENGALURU 560 034 .. RESPONDENT PAN : ABOPC5215A ASSESSEE BY : SHRI. NARENDRA SHARMA, ADVOCATE REVENUE BY : SHRI. S. T. SESHADRI, JCIT HEARD ON : 21.08.2018 PRONOUNCED ON : 31.08.2018 O R D E R PER LALIET KUMAR, JUDICIAL MEMBER : THE PRESENT APPEAL IS FILED BY THE REVENUE AGAINST THE ORDER OF THE CIT (A) -4, BANGALORE, DT.05.03.2018, FOR TH E ASSESSMENT YEAR 2013 14, ON THE FOLLOWING EFFECTIVE GROUNDS : 2. ON FACTS OF THE CASE, WHETHER THE LD CIT (A) WAS CORRECT IN ALLOWING THE APPEAL OF THE ASSESSEE ON THE BASIS OF THE ITA.1294/BANG/2018 PAGE - 2 ORDER OF THE HONBLE ITAT IN ASSESSEES OWN CASE FO R AY 2012-13, WHICH WAS ACCEPTED BY THE DEPARTMENT DUE T O LOW TAX EFFECT. 3. ON FACTS OF THE CASE, THE LD CIT (A) OUGHT TO HA VE APPRECIATED THAT THE VACANT FLATS ARE OWNED BY THE ASSESSEE AND PROVISION OF SEC. 23 APPLIES TO THE FACTS OF TH E CASE AS HELD BY THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT V ANSAL HOUSING FINANCE AND LEASING COMPANY, REPORTED IN [3 45 ITR 180 DELHI HIGH COURT]. 02. IN THE PRESENT CASE, THE AO HAD PROPOSED TO ADD NOTIONAL INCOME IN RESPECT OF THE PROPERTIES SITUATED AT NO. K-312, SY NO.135/2, KORAMANGALA AND PROPERTY NO.4, SY NO.130, KORAMANGALA, BENGALURU, WHICH WERE PREVIOUSLY LET O UT TO WIPRO AND M/S. TEAM LEASE SERVICES P LTD, RESPECTIVELY. THE AO HAS FIXED THE NOTIONAL RENT IN RESPECT OF THESE TWO PRO PERTIES AT AN AMOUNT OF RS1,01,54,000/-. BEING AGGRIEVED THE ASS ESSEE FILED APPEAL BEFORE THE CIT (A). 03. ON APPEAL BEFORE THE CIT (A), THE CIT (A) FOLLO WING THE ORDER OF THE TRIBUNAL FOR AY 2012-13 IN THE ASSESSE ES OWN CASE, HAD ALLOWED THE APPEAL OF THE ASSESSEE. FEELING AG GRIEVED, THE REVENUE IS IN APPEAL BEFORE US. 04. BEFORE US IT WAS SUBMITTED BY THE LD. DR THAT T HE ORDER PASSED BY THE TRIBUNAL FOR AY 2012-13 HAS NOT BEEN ACCEPTED BY THE REVENUE AND HAS PREFERRED APPEAL BEFORE THE HIG H COURT. 05. ON THE OTHER HAND, THE LD. AR RELIES ON THE ORD ER PASSED BY THE TRIBUNAL IN ITA.1274/BANG/2017, DT.28.09.2017. ITA.1294/BANG/2018 PAGE - 3 06. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RECORD. IN PARA 4 AND 5, THE TRIBUNAL HELD AS UNDER : 4. IT WAS SUBMITTED BY LD. AR OF ASSESSEE THAT IN B OTH THESE APPEALS, ONE ISSUE IS COMMON I.E. AN ADDITION MADE BY THE AO OF RS. 36.30 LAKHS IN EACH CASE AS NOTIONAL RENT WH ICH IS RAISED AS PER GROUND NO. 4 IN ITA NO. 1274/BANG/2017 AND A S PER GROUND NO. 3 IN ITA NO. 1275/BANG/2017.REGARDING TH IS ISSUE, HE SUBMITTED THAT HE DRAWN OUR ATTENTION TO PARA NO . 7.3 OF ORDER OF CIT(A) WHERE IT IS NOTED BY CIT(A) THAT TH E PROPERTY HAS REMAINED VACANT SINCE 2011 AFTER THE PREVIOUS T ENANT HAS VACATED THE PREMISES. HE SUBMITTED THAT FROM THESE FACTS, IT IS CLEAR THAT THE PROPERTY IN QUESTION IN BOTH THE CAS ES IS A LET OUT PROPERTY. HE DRAWN OUR ATTENTION TO THE PROVISIONS OF SECTION 23(1)(C) OF THE I.T. ACT, 1961 AND SUBMITTED THAT A S PER THIS SECTION, IF THE PROPERTY IS LET OUT AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR AND OWING TO SUCH VACANCY, ACTUAL RENT RECEIVED OR RECEIVABLE IS LESS THAN THE SAME REFERRED TO CLAUSE A OF SECTION 23(1) OF THE I.T. A CT, 1961 THEN THE AMOUNT SO RECEIVED / RECEIVABLE IS TAXABLE. HE SUBMITTED UNDER THESE FACTS, THE ADDITION MADE BY THE AO AND UPHELD BY THE CIT(A) SHOULD BE DELETED. LEARNED DR OF THE REV ENUE SUPPORTED THE ORDERS OF LOWER AUTHORITIES. 5. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. IN VIE W OF THE FACTS OF THE PRESENT CASE AS PER WHICH IT IS ADMITTED POS ITION THAT THE PROPERTY IN QUESTION IS A LET OUT PROPERTY AND IN V IEW OF THE PROVISIONS OF SECTION 23(1)(C) OF THE I.T. ACT, 196 1, WE HOLD THAT SINCE THE RENT RECEIVED IS NIL BECAUSE OF VACANCY, THE ADDITION MADE BY THE A. O. IS NOT JUSTIFIED AND HENCE DELETE D. AS THERE IS NO CHANGE IN FACTS IN THE PRESENT CASE FOR THIS ASSESSMENT YEAR, IN RESPECT OF THE VACANCY IN THE PROPERTIES, THEREFORE FOLLOWING THE DECISION OF THE TRIBUNAL FOR IMMEDIATE EARLIER YEAR IN CASE OF THE ASSESSEE, WE DISMISS THE APPEAL OF THE REVENUE. ITA.1294/BANG/2018 PAGE - 4 07. IN THE RESULT, APPEAL OF THE REVENUE IS DISMISS ED. ORDER PRONOUNCED IN THE OPEN COURT ON 31 ST DAY OF AUGUST, 2018. SD/- SD/- (A. K. GARODIA) (LALIET KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER BENGALURU DATED : 31.08.2018 MCN* COPY TO: 1. THE ASSESSEE 2. THE ASSESSING OFFICER 3. THE COMMISSIONER OF INCOME-TAX 4. COMMISSIONER OF INCOME-TAX(A) 5. DR 6. GF, ITAT, BANGALORE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.