SRI PRAVEEN KUMAR KESARWANI, ALLAHABAD V. JT.CIT, RANGE-1, ALLAHABAD

ITA 153/ALLD/2019

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 7307 (ITAT-ALLAHABAD)
• Duration Of Justice: 1 year(s) 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 19-04-2021
• Assessment Year: 2011-2012
• Appeal Filed On: 02-12-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Rule of consistency; Set aside
• Section: 80C

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD SMC BENCH, ALLAHABAD (THROUGH VIRTUAL COURT) BEFORE SHRI.VIJAY PAL RAO, JUDICIAL MEMBER ITA NOS.152/ALLD/2019 ASSESSMENT YEAR: 2011-12 SRI LATE SURYA PRAKASH KESARWANI, THE L/H- SMT. ANJU KESARWANI, SAHSON, ALLAHABAD, U.P. PAN-ADAPK7405L V. JOINT COMMISSIONER OF INCOME TAX, RANGE-I, ALLAHABAD, U.P. (APPELLANT) (RESPONDENT) ITA NOS.153/ALLD/2019 ASSESSMENT YEAR: 2011-12 SRI. PRAVEEN KUMAR KESARWANI, SAHSON, ALLAHABAD, U.P. PAN-AFQPK0683N V. JOINT COMMISSIONER OF INCOME TAX, RANGE-I, ALLAHABAD, U.P. (APPELLANT) (RESPONDENT) APPELLANT BY: MR. PRAVEEN GODBOLE, C.A. RESPONDENT BY: MR. A.K. SINGH, SR. DR DATE OF HEARING: 17.08.2021 DATE OF PRONOUNCEMENT: 17.08.2021 O R D E R PER SHRI VIJAY PAL RAO, JUDICIAL MEMBER: THESE TWO APPEALS BY TWO CO-OWNERS OF THE PROPERTY IN QUESTION ARE DIRECTED AGAINST THE TWO SEPARATE ORDERS OF THE CIT(A) DATED 04.09.2019 AND 23.09.2019 RESPECTIVELY FOR THE ASSESSMENT YEAR 2011-12. THE ASSESSEES HAVE RAISED THE COMMON GROUNDS OF APPEAL WHICH READS AS UNDER:- 2. THE SOLITARY COMMON ISSUE RAISED IN THESE TWO APPEALS IS REGARDING ADDITION MADE BY THE ASSESSING OFFICER UNDER THE HEAD INCOME FROM HOUSE PROPERTY. AT THE ITA NOS.152 & 153/ALLD/2019 SRI. LATE SURYA PRAKASH KESARWANI SRI PRAVEEN KUMAR KESARWANI 2 TIME OF HEARING, LEARNED AR OF THE ASSESSEE HAS POINTED OUT THAT AN IDENTICAL ISSUE HAS BEEN CONSIDERED AND DECIDED BY THIS TRIBUNAL IN THE OTHER CO-OWNERS CASE NAMELY SH. KRISHNA CHANDRA KESARWANI VS. JCIT IN ITA NO. 151/ALLD/2019, VIDE ORDER DATED 16.03.2021. HE HAS ALSO FILED A COPY OF THE ORDER OF THIS TRIBUNAL DATED 16.03.2021 AND SUBMITTED THAT THE ISSUE MAY BE REMANDED TO THE RECORD OF THE ASSESSING OFFICER FOR DETERMINATION FOR ANNUAL LETTING VALUE (ALV) WITH SAME DIRECTIONS. 3. THE LEARNED DR HAS NOT DISPUTED THE FACT THAT THE ISSUE OF ANNUAL LETTING VALUE IS COMMON IN ALL THREE APPEALS BEING THE ASSESSEES ARE CO-OWNERS OF THE SAME PROPERTY AND RAISED NO OBJECTION IF THE MATTER IS REMANDED TO THE RECORD OF THE ASSESSING OFFICER ON SIMILAR TERMS. 4. HAVING CONSIDERED THE RIVAL SUBMISSIONS AS WELL AS RELEVANT MATERIAL ON RECORD, AT THE OUTSET, IT IS NOTED THAT THIS TRIBUNAL IN THE CASE OF CO-OWNER OF THE PROPERTY NAMELY KRISHNA CHANDRA KESARWANI VS. JCIT IN ITA NO. 151/ALLD/2019, VIDE ORDER DATED 16.03.2021 HAS CONSIDERED AND DECIDED THIS ISSUE IN PARA 6 TO 8 AS UNDER: 6. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AS WELL MATERIAL ON RECORD. THE ASSESSING OFFICER HAS TAKEN THE ANNUAL LETTING VALUE OF THE PROPERTY IN QUESTION BY TAKING AN INSTANCE OF PROPERTY LET OUT TO DRT FOR A RENT @ 8.78 PER SQ.FT. THE RELEVANT FINDINGS OF THE ASSESSING OFFICER ARE IN PARA 7 ARE AS UNDER: 7. 1 HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE REPLY MENTIONED IN PARA 6. BUT NOT CONVINCED WITH THE ARGUMENTS OF THE ASSESSEE. PROVISIONS OF INCOME TAX ACT CANNOT BE INTERPRETED AS PER INTENTION OF ANY INDIVIDUAL BUT AS PER INTENTION OF PARLIAMENT. AS PER PROVISIONS CONTAINED IN SEC.23 OF THE I.T.ACTL961, THE ANNUAL VALUE FOR THE PURPOSES OF SEC.22 OF ANY PROPERTY SHALL BE DEEMED TO BE (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR, OR (B) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS IN EXCESS OF THE SUM REFERRED TO IN CLAUSE (A), THE AMOUNT SO RECEIVED OR RECEIVABLE; OR (C) ............................... THE ALV OF ANY BUILDING IS BASED ON WHAT RENT IT MIGHT GET NOT THE RENT RECEIVED. THE BUILDING IN QUESTION IS SITUATED ON LOWTHER ROAD IN DARBHANGA CASTEL AREA AND IS HAVING AREA OF 1600SQ. YARD. THE COMPARABLE BUILDING WHICH IS ALSO SITUATED IN THE DARBHANGA CASTEL AREA ON PANNA LAL ROAD AT A DISTANCE OF 100 YARDS INSIDE THE ROAD AND IS OCCUPIED BY DEBT RECOVERY TRIBUNAL (DRT). THE DRT IS PAYING RENT @ RS 8.78/- PER SQ. FT. CONSIDERING ALL ASPECT OF THE CASE THE FAIR RENT OF THE BUILDING IN QUESTION OCCUPIED BY KESARWANI HOSPITAL & RESEARCH INSTITUTE ITA NOS.152 & 153/ALLD/2019 SRI. LATE SURYA PRAKASH KESARWANI SRI PRAVEEN KUMAR KESARWANI 3 P. LTD IS COMPUTED AT THE RATE OF THE RENT PAID BY DRT. THE ASSESEE COULD NOT FURNISH THE CONVEYANCE DEED AND SO THE EXTENT OF BUILDING ACTUALLY CONSTRUCTED BEFORE TAKING INTO POSSESSION BY HOSPITAL IS NOT KNOWN THEREFORE IT IS ASSUMED THAT TOTAL BUILDING BELONGS TO OWNERS WHO HAVE LEGAL TITLE OVER THE PROPERTY. THE ALV OF THE BUILDING OCCUPIED BY THE KESARWANI HOSPITAL & RESEARCH INSTITUTE P. LID OF WHICH ASSESSES IS A CO-OWNER IS BEING COMPUTED AS UNDERTOTAL AREA 1600( AS PER SUBMISSION OF ASSESSEE}X 9 SQ. FT = 14400 SQ.FT. THUS FAIR RENT OF BUILDING IN QUESTION =RS 8.78X 14400= RS 126432/- PER MONTH. THUS ALV OF THE BUILDING IN QUESTION = RS 15,17,184/- (RS 1,26,432X 12) LESS DEDUCTION U/S 24{L)I,E 30% OF RS 15,17,184/- =RS 4,55,155/= INCOME FROM HOUSE PROPERTY - =RS 10,62,029/- THE SHARE OF ASSESSEE RS_ 10,62,029/13- RS 81,695/- THE ASSESSEE HAS SHOWN HIS INCOME FORM HOUSE PROPERTY AT RS 6,3007- THERE FORE DIFFERENCE 'OF RS 81,695- RS 6,300 I.E, RS 75,395 IS ADDED TOWARDS INCOME FROM HOUSE PROPERTY OF THE ASSESSEE. SUBJECT TO OBSERVATION ABOVE THE INCOME OF ASSESSEE IS COMPUTED AS UNDER:- 1. INCOME FROM BUSINESS RS 10,64,4467- 2. INCOME FROM HOUSE PROPERTY AS SHOWN RS 6.300/- AS DISCUSSED IN PARA 7 RS 75,3957- RS 81,695/- 3. INCOME FROM OTHER SOURCE RS 12,76,439/- 4. GROSS TOTAL INCOME RS 24,22,580/- 5. DEDUCTION UNDER SECTION 80C RS 1,00,000/-- TOTAL INCOME' - RS 23,22,580/- ASSESSED ACCORDINGLY AT THE TOTAL INCOME OF RS. 23,22,560/-. CHARGE INTEREST U/S 234D. NOTICE OF DEMAND AND CHALLAN ARE BEING ISSUED. 7. THOUGH, THE ASSESSING OFFICER HAS TAKEN THE ALV AS THE RATE OF RENT IN RESPECT OF A BUILDING SITUATED IN THE AREA, HOWEVER, THE ASSESSING OFFICER HAS NOT GIVEN THE ASSESSEE A FAIR OPPORTUNITY TO RAISE THE OBJECTION AGAINST ADOPTING THE SAID RATE OF RENT AS FAIR MARKET RENTAL VALUE OF THE PROPERTY IN QUESTION WHILE DETERMINING THE ALV OF THE PROPERTY. THERE IS NOT DISPUTE THAT IN CASE THE ASSESSING OFFICER FINDS THAT THE RENTAL INCOME SHOWN BY THE ASSESSEE IS NOT IN THE PARITY OF THE REASONABLE EXPECTED SUM FOR LETTING OUT OF THE PROPERTY IN TERMS OF SECTION 23 (1) OF THE INCOME TAX ACT. THE ASSESSING OFFICER CAN PROCEED TO DETERMINE THE ANNUAL LETTING VALUE. THE ANNUAL LETTING VALUE OF THE PROPERTY IS THE SUM WHICH IS REASONABLY EXPECTED TO BE FETCHED BY LETTING OUT FOR THE PROPERTY FROM YEAR TO YEAR BASIS. THUS, THE REASONABLE AND PROPER CRITERIA FOR DETERMINING THE ANNUAL LETTING VALUE IS THE FAIR MARKET RENTAL FOR WHICH THE PROPERTY CAN BE REASONABLY LET OUT FROM YEAR TO YEAR. THE ASSESSING OFFICER HAS THOUGH ADOPTED THE RATE OF RENT AS IT WAS AGREED UPON BETWEEN THE PARTIES IN RESPECT OF PROPERTY IN THE VICINITY HOWEVER, THE ASSESSEE DID NOT GIVE THE OPPORTUNITY TO THE ASSESSEE TO PRESENT ITS CASE AGAINST SUCH ADOPTION OF THE ANNUAL LETTING VALUE. THE ASSESSING OFFICER HAS ALSO NOT TAKEN THE FACTS WHICH MIGHT HAVE INFLUENCED THE FAIR MARKET RENTAL VALUE OF THE PROPERTY BEING THE DIFFERENCE IN THE LOCALITY OF THE PROPERTIES, THE AREA LET OUT ADVANTAGE AND DISADVANTAGE IF ANY ATTACHED TO THE PROPERTIES. THEREFORE, THE ASSESSING OFFICER HAS ADOPTED THE SAID RENT WITHOUT EVEN GIVING A SHOW CAUSE NOTICE TO THE ASSESSEE. THE LD. CIT (A) THOUGH CONFIRMED THE ORDER OF THE ASSESSING OFFICER HOWEVER, THE COMPARABLE OF THE RATE ADOPTED BY THE ASSESSING OFFICER NOT BEEN EXAMINED BY THE LD. CIT (A). ACCORDINGLY, IN THE FACTS AND CIRCUMSTANCES OF THE CASE THE MATTER IS SET ASIDE TO THE RECORD OF THE ASSESSING OFFICER FOR RE-ADJUDICATION OF THE SAME AFTER GIVING AN APPROPRIATE OPPORTUNITIES OF HEARING TO THE ASSESSEE AND THEN DETERMINING ITA NO. ITA NOS.152 & 153/ALLD/2019 SRI. LATE SURYA PRAKASH KESARWANI SRI PRAVEEN KUMAR KESARWANI 4 151/ALLD/2019 7 THE ANNUAL LETTING VALUE STRICTLY IN ACCORDANCE WITH THE PROVISIONS OF SECTION 23 (1) OF THE INCOME TAX ACT. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. 5. SINCE THE PROPERTY IN QUESTION IS SAME AND ISSUE IN ALL THESE APPEALS IS IDENTICAL REGARDING DETERMINATION OF ALV IN RESPECT OF THE PROPERTY IN QUESTION AND THE ASSESSEES ARE CO-OWNER OF THE SAID PROPERTY, THEREFORE TO MAINTAIN THE RULE OF CONSISTENCY AND FOLLOWING THE EARLIER DECISION OF THIS TRIBUNAL, THE ISSUE IS SET ASIDE TO THE RECORD OF THE ASSESSING OFFICER FOR RE-ADJUDICATION OF THE SAME AFTER GIVING AN APPROPRIATE OPPORTUNITY OF HEARING TO THE ASSESSEE AND THEN DETERMINED THE ALV STRICTLY IN ACCORDANCE WITH SECTION 23(1) OF THE INCOME TAX ACT. 6. IN THE RESULT, THESE TWO APPEALS ARE ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 17.08.2021 THROUGH VIDEO CONFERENCING AT ALLAHABAD. SD/- [VIJAY PAL RAO] JUDICIAL MEMBER DATED: 17/08/2021 SH COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT(A) , ALLAHABAD 4. CIT 5. DR - BY ORDER ASSISTANT REGISTRAR