Avinash Agencies, Karur V. ITO, Karur

ITA 1343/CHNY/2017

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 5274 (ITAT-CHENNAI)
• Duration Of Justice: 11 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2018
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Appeal Filed On: 25-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S VIJAYAPRABHA
• Assessee Lawyers: N QUADIR HOSEYN
• Keywords: Fair market value
• Section: 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, CHENNAI . . . , . !' , $ % BEFORE SHRI N.R.S. GANESAN, JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ ITA NO.1343/CHNY/2017 ' (' / ASSESSMENT YEAR : 2012-13 M/S AVINASH AGENCIES, NO.15A, RAMAKRISHNAPURAM EAST, KARUR 639 001. PAN : AAAFA 9798 B V. THE INCOME TAX OFFICER, WARD 1, KARUR. (*+/ APPELLANT) (,-*+/ RESPONDENT) *+ . / / APPELLANT BY : SHRI N. QUADIR HOSEYN, ADVOCATE ,-*+ . / / RESPONDENT BY : MS. S. VIJAYAPRABHA, JCIT 0 . 1$ / DATE OF HEARING : 02.04.2018 2!( . 1$ / DATE OF PRONOUNCEMENT : 26.04.2018 / O R D E R PER N.R.S. GANESAN, JUDICIAL MEMBER: THIS APPEAL OF THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE PRINCIPAL COMMISSIONER OF INCOME TAX, TRICHY-1, TRICHY, DATED 27.03.2017 AND PERTAINS TO ASSESSMENT YEAR 2012-13. 2. SHRI N. QUADIR HOSEYN, THE LD.COUNSEL FOR THE AS SESSEE, SUBMITTED THAT THE ASSESSEE HAS SHOWN AN AMOUNT OF 20,00,000/- 2 I.T.A. NO.1343/CHNY/17 AS LIABILITY TOWARDS BUILDING ADVANCE ACCOUNT AND A DMITTED RENTAL INCOME FROM GODOWN AT 24,000/-. WHILE COMPUTING THE LET OUT VALUE OF PROPERTY, ACCORDING TO THE LD. COUNSEL, TH E ASSESSING OFFICER HAS TO COMPARE THE FAIR RENTAL VALUE, MUNIC IPAL VALUE, STANDARD RENT AND ACTUAL RENT RECEIVED. IN FACT, T HE ASSESSING OFFICER RAISED A QUERY, A COPY OF WHICH IS AVAILABL E AT PAGE 12 OF THE PAPER-BOOK. ACCORDING TO THE LD. COUNSEL, THE ASSE SSING OFFICER FOUND THAT IT WAS A NORMAL COMMERCIAL PRACTICE TO R ECEIVE TEN TIMES OF MONTHLY RENT AS ADVANCE. HOWEVER, THE ASSESSEE HAS SHOWN ONLY 2,00,000/-. AFTER CONSIDERING THE EXPLANATION OF T HE ASSESSEE, ACCORDING TO THE LD. COUNSEL, THE ASSESSING OFFICER ACCEPTED THE CASE OF THE ASSESSEE. HOWEVER, THE PRINCIPAL COMMI SSIONER FOUND THAT THE RENTAL VALUE OF THE PROPERTY HAS TO BE DET ERMINED AS PER SECTION 23(1)(A) OF THE INCOME-TAX ACT, 1961 (IN SH ORT 'THE ACT'). HAVING INFLUENCED BY THE RENTAL ADVANCE RECEIVED BY THE ASSESSEE, THE PRINCIPAL COMMISSIONER FOUND THAT THE ANNUAL RE NTAL VALUE WOULD BE MUCH MORE THAN WHAT WAS DECLARED BY THE ASSESSEE . ACCORDING TO THE LD. COUNSEL, WHEN THE ASSESSING OFFICER HAS TAKEN ONE OF THE POSSIBLE VIEWS AFTER CONSIDERING THE MATERIAL AVAIL ABLE ON RECORD, THE PRINCIPAL COMMISSIONER CANNOT REVISE THE ORDER IN EXERCISE OF HIS REVISIONAL JURISDICTION UNDER SECTION 263 OF TH E ACT. 3 I.T.A. NO.1343/CHNY/17 3. WE HEARD MS. S. VIJAYAPRABHA, THE LD. DEPARTMENT AL REPRESENTATIVE ALSO. A PERUSAL OF THE ORDER OF THE ASSESSING OFFICER DOES NOT INDICATE THE APPLICATION OF MIND OF THE AS SESSING OFFICER WITH RESPECT TO FAIR MARKET VALUE OR THE ANNUAL REN TAL VALUE OR THE ACTUAL RENT RECEIVED BY THE ASSESSEE ON THE GODOWN LET OUT BY IT. THE PROCEEDING BEFORE THE ASSESSING OFFICER IS A JU DICIAL PROCEEDING. THEREFORE, IT IS FOR THE ASSESSING OFF ICER TO EXAMINE THE MATERIAL AVAILABLE ON RECORD AND DECIDE THE ISSUE I N ONE WAY OR OTHER. THE APPLICATION OF MIND OF THE ASSESSING OF FICER TO THE MATERIAL AVAILABLE ON RECORD SHOULD BE REFLECTED IN THE ASSESSMENT ORDER. UNLESS THE ASSESSING OFFICER DISCUSSES THE REASON FOR CONCLUSION REACHED IN THE ASSESSMENT ORDER, THE REV ISIONAL / APPELLATE AUTHORITY MAY NOT BE ABLE TO APPRECIATE T HE ORDER OF THE ASSESSING OFFICER. THIS TRIBUNAL IS OF THE CONSIDE RED OPINION THAT DISCLOSING REASON FOR CONCLUSION REACHED IN THE ASS ESSMENT ORDER WOULD ESTABLISH LIVE LINK BETWEEN THE MIND OF THE D ECISION MAKER AND MATERIAL AVAILABLE ON RECORD. MOREOVER, IT WOU LD AVOID ARBITRARINESS IN THE DECISION MAKING PROCESS. SINC E THE ASSESSMENT ORDER IS SILENT AND THE ASSESSING OFFICER HAS NOT R ECORDED ANY REASON FOR THE CONCLUSION REACHED, THIS TRIBUNAL IS OF THE CONSIDERED 4 I.T.A. NO.1343/CHNY/17 OPINION THAT THE PRINCIPAL COMMISSIONER HAS RIGHTLY FOUND THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS AND PRE JUDICIAL TO THE INTERESTS OF REVENUE. THEREFORE, THIS TRIBUNAL DO NOT FIND ANY REASON TO INTERFERE WITH THE ORDER OF THE LOWER AUT HORITY AND ACCORDINGLY THE SAME IS CONFIRMED. 4. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE STANDS DISMISSED. ORDER PRONOUNCED ON 26 TH APRIL, 2018 AT CHENNAI. SD/- SD/- (. !' ) ( . . . ) (A. MOHAN ALANKAMONY) (N.R.S. GANESAN) $ / ACCOUNTANT MEMBER /JUDICIAL MEMBER /CHENNAI, 4 /DATED, THE 26 TH APRIL, 2018. KRI. . ,156 76(1 /COPY TO: 1. *+ /APPELLANT 2. ,-*+ /RESPONDENT 3. PRINCIPAL CIT, TRICHY-1, TRICHY 4. 68 ,1 /DR 5. 9' : /GF.