Shri Laxmi Kant Todi, Kolkata V. ITO, Ward - 35(3), Kolkata, Kolkata

ITA 1636/KOL/2011

• Counselvise Citation: [2013] 120 COUNSELVISE.COM (IT) 4936 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-08-2013
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2004-2005
• Appeal Filed On: 28-11-2011
• Court: TRIBUNAL
• Department Lawyers: P V C KOLHE
• Keywords: Fair market value

Judgement Text

, C , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH: KOL KATA () BEFORE , /AND ! ' ! , ) [BEFORE SHRI PRAMOD KUMAR, AM & SHRI MAHAVIR SINGH, JM] # # # # / I.T.A NOS. 1634 TO 1637/KOL/2011 '$% &' '$% &' '$% &' '$% &'/ // / ASSESSMENT YEARS: 2002-03 TO 2005-06 SHRI LAXMI KANT TODI VS. INCOME-TAX OFFICER, WD -35(3), KOLKATA (PAN: ABTPT7710N) ()* /APPELLANT ) (+)*/ RESPONDENT ) DATE OF HEARING : 23.07.2013 DATE OF PRONOUNCEMENT: 23.08.2013 FOR THE APPELLANT: SHRI RAJEEVA KUMAR FOR THE RESPONDENT: SHRI P. V. C. KOLHE, ADDL. C IT, DR , / ORDER PER MAHAVIR SINGH, JM ( ! ' ! ! ' ! ! ' ! ! ' !, , , , ) ALL THESE APPEALS BY ASSESSEE ARE ARISING OUT OF SE PARATE ORDERS OF CIT(A)-XX, KOLKATA IN APPEAL NOS. 142, 141, 140 & 139/CIT(A)-XX/WD-35( 3)/09-10/KOL DATED 21.09.2011 RESPECTIVELY. ASSESSMENTS WERE FRAMED SEPARATELY BY ITO, WARD-35(3), KOLKATA U/S. 143(3)/147 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER REFERRED TO AS THE ACT) FOR AY 2002-03 TO 2005-06 VIDE HIS ORDERS DATED 30.10.2009. SINCE COMMON ISSUES ARE INVOLVED IN ALL THESE APPEALS, WE DISPOSE OF THE SAME BY A CONSOLIDATED O RDER. 2. THE FIRST COMMON ISSUE IN THESE FOUR APPEALS OF THE ASSESSEE IS AS REGARDS TO ESTIMATION OF NOTIONAL INCOME FROM HOUSE PROPERTY. FOR THIS, ASSESSEE HAS RAISED FOLLOWING MODIFIED GROUND IN ALL THE YEARS AND THE RELEVANT GROUND AS RAISED IN AY 2002-03 IN ITA NO.1634/K/2011 READS AS UNDER: 1. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE EST IMATION OF NOTIONAL INCOME FROM HOUSE PROPERTY WITHOUT GIVING ANY COGENT REASONS THEREOF. SUCH ESTIMATION OF NOTIONAL INCOME IS WRONG AND NEED TO BE DELETED. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS NOTICED THAT THE ASSESSEE IS HAVING THREE HOUSE PROPERTIES I.E. RESIDENTIAL HOUS E I.E. ONE EACH AT KOLKATA, MADRAS AND 2 ITA NOS. 1634 TO 1637/K/2011 SHRI LAXMI KANT TODI AY: 2002-03 TO 2005-06 VRINDABAN. THE AO NOTED FROM THE COMPUTATION OF IN COME THAT ASSESSEE HAS NOT DISCLOSED ANY INCOME FROM HOUSE PROPERTY FROM ANY OF THE ABOVE ST ATED HOUSE PROPERTIES. THE AO REQUIRED THE ASSESSEE TO EXPLAIN AS TO WHY NOTIONAL VALUE I. E. FAIR MARKET VALUE OF RENT SHOULD NOT BE ASSESSED. THE ASSESSEE CLAIMED THAT PROPERTY AT CH ENNAI IS USED FOR ASSESSEES RESIDENCE AND THE PROPERTY AT VRINDABAN IS USED PARTLY BY ASSESSE E AND PARTLY BY ASSESSEES UNCLE. IN RESPECT TO KOLKATA PROPERTY THE ASSESSEE HAS NOT COMMITTED ANYTHING. ACCORDINGLY, AO COMPUTED THE FAIR MARKET VALUE OF THESE PROPERTIES AS UNDER: SINCE ASSESSEE IN ITS SUBMISSION DATED 10/08/09 FU RNISHED VERY LOW RENTAL VA1UE OF THE HOUSE PROPERTY WHICH IS NOT ACCEPTED CONSIDERIN G THE LOCALITY IN WHICH PROPERTY ARE SITUATED AND VALUE OF THESE TWO HOUSE PROPERTIE S SHOWN IN THE BALANCE SHEET. HENCE FAIR MARKET VALUE QUOTED BY THE ASSESSEE CANN OT BE ACCEPTED AS REASONABLE EXPECTED RENT OF THE HOUSES. FAIR MARKET RENT DETER MINED BY THE DEPARTMENTAL INSPECTOR S VERY CLOSE TO THE EXPECTED RENTAL VALU E OF THE SALT LAKE HOUSE PROPERTY. THEREFORE, AFTER CONSIDERING THE SUBMSSION OF THE ASSESSEE AND THE INSPECTORS REPORT I TAKE THE FAIR MARKET RENT DERIVED BY THE DEPARTME NTAL INSPECTOR AS REASONABLE EXPECTED RENT FOR THE SALT LAKE HOUSE PROPERTY. WIT H THIS REASONABLE EXPECTED RENTAL VALUE OR THE ANNUAL VALUE OF THE SALT LAKE PROPERTY IS TAKEN AT RS.72,000/- BEING FAIR MARKET RENT FOR THE F.Y.2001- 02 AS DETERMINED BY T HE DEPARTMENTAL INSPECTOR. THE ANNUAL VALUE OF THE VRINDABAN HOUSE PROPERTY IS TAK EN AT RS.60,000/- (BEING 5000/- PER MONTH) FOR ASSESSEE SHARE. THEREFORE, RS.72000/ - & RS.60,000/- ARE BEING TAKEN AS ANNUAL VALUE OF THE HOUSE PROPERTIES AT SALT LAKE A ND VRINDAVAN RESPECTIVELY ON ESTIMATE BASIS FOR THE A.Y. 2002-03. 4. AGGRIEVED, ASSESSEE PREFERRED APPEAL BEFORE CIT (A). BEFORE HIM ALSO NOTHING WAS EXPLAINED. AGGRIEVED AGAINST THE ORDER OF CIT(A) C ONFIRMING THE ADDITION, ASSESSEE CAME IN APPEAL BEFORE US. BEFORE US ASSESSEE STATED THAT TH E TRIBUNAL IN AY 2006-07 IN ITA NO. 341/K/2011 DATED 15.12.2011 HAS ALREADY SET ASIDE T HE ISSUE TO THE FILE OF AO FOR RECOMPUTATION OF ANNUAL VALUE OF RENT ON THE BASIS OF MUNICIPAL VALUATION VIDE PARA 9.1 AS UNDER: 9.1. GROUND NOS. 3 & 4 REGARDING HOUSE PROPERTY OF THE ASSESSEE WHICH IS VACANT, WE ARE OF THE VIEW THAT THE REVENUE WAS JUSTIFIED TO T AKE THE VALUE AS PER MUNICIPAL VALUATION AND NOT THE FAIR MARKET VALUE OF RENT AS ADOPTED BY THE INSPECTOR . THEREFORE, WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO WITH THE DIRECTION TO TAKE THE ANNUAL VALUE OF THE VACANT HOUSE ON THE BASIS OF MUNICIPAL VALUATIO N. 5. WE FIND THAT THE ISSUE IS COVERED BY TRIBUNALS EARLIER ORDER WHEREIN TRIBUNAL HAS DIRECTED TO TAKE THE MUNICIPAL VALUE FOR ASCERTAINI NG ANNUAL LETTING OUT VALUE (ALV) OF THESE THREE PROPERTIES AS THE ASSESSEE HAS FILED MUNICIPA L CORPORATION VALUATION OF BIDHANNAGAR MUNICIPALITY IN RESPECT TO KOLKATA PROPERTY. IN RE SPECT TO VRINDABAN PROPERTY, THE ASSESSEE HAS NOT FILED ANYTHING BUT IN SET ASIDE PROCEEDINGS HE WILL FILE THE DETAILS. IN SUCH CIRCUMSTANCES, 3 ITA NOS. 1634 TO 1637/K/2011 SHRI LAXMI KANT TODI AY: 2002-03 TO 2005-06 WE SET ASIDE THIS ISSUE TO THE FILE OF THE AO TO RE COMPUTE THE ALV IN TERM OF THE ABOVE. THIS GROUND OF APPEALS OF ASSESSEE FOR ALL ASSESSMENT YE ARS IS ALLOWED FOR STATISTICAL PURPOSES. 6. COMING TO THE NEXT ISSUE REGARDING DISALLOWANCE OF INTEREST ON DEBIT BALANCE OF M. M. EXPORTS. THE ASSESSEE HAS RAISED SIMILAR GROUND IN ALL THE YEARS EXCEPT QUANTUM AND THE GROUND RAISED AS IN ITA NO. 1634/K/2011 FOR AY 2002-03 REA DS AS UNDER: 2. THAT THE LD. CIT(A) ERRED IN CONFIRMING THE DIS ALLOWANCE AMOUNTING TO RS.4,80,000/- BEING THE INTEREST PAID TO M/S. M. M. EXPORTS WITHO UT APPRECIATING THE FACTS OF THE CASE & EVIDENCE PLACED ON RECORD. THE DISALLOWANCE SO MAD E AND CONFIRMED BY THE LD. CIT(A) IS WRONG AND NEED TO BE DELETED. 7. WE HAVE HEARD RIVAL SUBMISSIONS AND GONE THROUGH FACTS AND CIRCUMSTANCES OF THE CASE. WE FIND THAT THE TRIBUNAL IN AY 2006-07 IN ITA NO. 341/K/2011 HAS ALREADY DECIDED THIS ISSUE AND THE FACTS BEING SAME, WE TAKE A CONSISTENT VIEW IN THESE YEARS ALSO. THE TRIBUNAL HAS DECIDED THIS ISSUE VIDE PARA 9, WHICH READS AS UNDE R: 9. AFTER HEARING THE RIVAL SUBMISSIONS, ON CAREFUL PERUSAL OF THE MATERIAL AVAILABLE ON RECORD, WE ARE OF THE VIEW THAT REGARDING PAYMENT O F INTEREST TO THE CURRENT ACCOUNT MAINTAINED BY THE FIRM IN RESPECT OF PARTNERS, CHAR GING OF INTEREST ON THE CREDIT BALANCE IS ALLOWABLE EXPENDITURE. THEREFORE, WE SET ASIDE THE ORDERS OF THE REVENUE AUTHORITIES ON THIS ISSUE AND DIRECT THE ASSESSING OFFICER TO DELE TE THE ADDITION OF RS.6,46,804/-, WHICH WAS WRONGLY DISALLOWED BY HIM. THIS GROUND OF THE ASSESSEE IS ALLOWED. AS THE ISSUE IS EXACTLY SIMILAR, WE ALLOW THIS ISSU E OF ASSESSEES APPEALS FOR ALL THE ASSESSMENT YEARS. 8. IN THE RESULT, APPEALS OF ASSESSEE ARE PARTLY AL LOWED FOR STATISTICAL PURPOSES. 9. ORDER IS PRONOUNCED IN THE OPEN COURT ON 23.08.2 013 SD/- SD/- , ! ' ! ! ' ! ! ' ! ! ' ! , (PRAMOD KUMAR) (MAHAVIR SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 23RD AUGUST, 2013 -. '$/0 '1 JD.(SR.P.S.) 4 ITA NOS. 1634 TO 1637/K/2011 SHRI LAXMI KANT TODI AY: 2002-03 TO 2005-06 , 2 ''3 43&5- COPY OF THE ORDER FORWARDED TO: 1 . )* / APPELLANT SHRI LAXMI KANT TODI, 22, MADAN MOHAN T OLLA ST., KOLKATA-700 005. 2 +)* / RESPONDENT ITO, WARD-35(3), KOLKATA. 3 . ',$ ( )/ THE CIT(A), KOLKATA 4. 5. ',$ / CIT KOLKATA 3;'< '$ / DR, KOLKATA BENCHES, KOLKATA +3 '/ TRUE COPY, ,$/ BY ORDER, ! 0 /ASSTT. REGISTRAR .