VILINA PRAVIN SHETH, MUMBAI V. ITO WD 17(3)(4), MUMBAI

ITA 1696/MUM/2009

• Counselvise Citation: [2010] 136 COUNSELVISE.COM (IT) 7926 (ITAT-MUMBAI)
• Duration Of Justice: 10 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-02-2010
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: F
• Next Hearing Date: 25-01-2010
• Assessment Year: 2005-2006
• Appeal Filed On: 13-03-2009
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S B MOREY
• Keywords: Depreciation; Salary income; Share purchase agreement
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES, F, MUMBAI BEFORE SHRI R V EASWAR, SENIOR VICE PRESIDENT AND SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER I T A NO: 1696/MUM/2009 (ASSESSMENT YEAR: 2005-06) MRS VILINA PRAVIN SHETH, MUMBAI APPELLANT (PAN: AAHPS7948C) VS INCOME TAX OFFICER 17(3)(4), MUMBAI RESPONDE NT APPELLANT BY: SHRI VIJAY MEHTA RESPONDENT BY: SHRI S B MOREY O R D E R R V EASWAR, SENIOR VICE PRESIDENT: THIS APPEAL HAS BEEN FILED BY THE ASSESSEE AND IT PERTAINS TO THE ASSESSMENT YEAR 2005-06. 2. THE ASSESSEE IS AN INDIVIDUAL DERIVING INCOME BY WAY OF SALARY, COMMISSION FROM LIC FOR ACTING AS ITS AGENT, INTERE ST ON DEPOSITS, ETC. THE APPEAL ARISES OUT OF THE ASSESSMENT ORDER PASSED ON 05.11.2007 UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961. 3. THE FIRST GROUND IS DIRECTED AGAINST THE DISALLO WANCE OF THE EXPENSES OF RS.36,060/- CLAIMED BY THE ASSESSEE AGAINST THE PRO FESSIONAL INCOME EARNED PRIOR TO 31.10.2004. THE SECOND GROUND IS AGAINST THE DECISION OF THE INCOME TAX AUTHORITIES TO TREAT THE PROFESSIONAL INCOME OF RS.1,25,000/- AS SALARY. SINCE BOTH THE GROUNDS ARE CONNECTED, THEY ARE TAKEN UP T OGETHER FOR CONSIDERATION. 4. THE ASSESSEE DREW SALARY FROM A COMPANY BY NAME PVD PLAST MOULD INDUSTRIES LIMITED. THE SAME WAS SHOWN UNDER THE H EAD SALARY ABOUT WHICH 2 THERE IS NO DISPUTE. THE ASSESSEE WAS ALSO IN RECE IPT OF PROFESSIONAL FEES OF RS.1,25,000/- FROM THE SAID COMPANY. THIS WAS DISC LOSED BY THE ASSESSEE AS PROFESSIONAL INCOME, AND SHE CLAIMED DEPRECIATION A ND OTHER EXPENSES TOTALLING TO RS.36,060/- AGAINST THE SAME. THE ASSESSING OFF ICER, RELYING ON SECTION 17(1)(IV) OF THE ACT, WHICH INCLUDED ANY FEES, COMM ISSION, ETC. UNDER THE HEAD SALARY, TREATED THE FEES OF RS.1,25,000/- AS SALA RY INCOME. SINCE THERE IS NO SCOPE FOR ALLOWING ANY EXPENSES AGAINST THE SALARY INCOME EXCEPT THOSE PROVIDED FOR IN SECTION 16, THE EXPENSES OF RS.36,0 60/- CLAIMED BY THE ASSESSEE REMAINED DISALLOWED. THE ACTION OF THE ASSESSING O FFICER HAVING BEEN CONFIRMED BY THE CIT(A), THE ASSESSEE IS IN FURTHER APPEAL BE FORE THE TRIBUNAL. 5. THE REAL QUESTION TO BE CONSIDERED IS WHETHER TH ERE WAS ANY EMPLOYER EMPLOYEE RELATIONSHIP BETWEEN THE COMPANY AND THE A SSESSEE VIS--VIS THE RECEIPT OF RS.1,25,000/- AS FEES. THE COPY OF THE RESOLUTION OF THE BOARD OF DIRECTORS OF THE COMPANY PASSED ON 28.10.2004, A CO PY OF WHICH IS AT PAGES 1 AND 2 OF THE PAPER BOOK, SHOWS THAT THE ASSESSEE WA S APPOINTED AS EXECUTIVE DIRECTOR OF THE COMPANY FOR THE SMOOTH AND EFFICIEN T CONDUCT OF THE MARKETING AND EXPORT DEVELOPMENT OF THE COMPANY. THE RESOLUT ION GOES ON TO RECORD THAT FOR THE LAST SEVERAL YEARS THE ASSESSEE WAS CONNECT ED WITH THE COMPANY AS A CONSULTANT FOR MARKETING DEPARTMENT AND DUE TO HER EFFICIENT ADVICE THE COMPANY WAS ABLE TO INCREASE ITS EXPORTS EVERY YEAR . THE RESOLUTION GOES ON TO SAY THAT BY HER FULL TIME ATTENDANCE AS EXECUTIVE D IRECTOR OF THE COMPANY, THE COMPANY WOULD BENEFIT IMMENSELY. THE APPOINTMENT A S EXECUTIVE DIRECTOR WAS FOR A PERIOD OF FIVE YEARS WITH EFFECT FROM 01.11.2 004 TO 31.10.2009. SHE WAS TO DRAW SALARY OF RS.40,000/- PER MONTH WITH AN ANNUAL INCREASE OF RS.4,000/-, 3 CONTRIBUTION TO PROVIDENT FUND, PRIVILEGE LEAVE, ET C. THE SALARY RECEIVED BY THE ASSESSEE IN HER CAPACITY AS EXECUTIVE DIRECTOR WAS DECLARED UNDER THE HEAD SALARY AND ABOUT THE SAME THERE IS NO DISPUTE. S HE, HOWEVER, RECEIVED THE FEE OF RS.1,25,000/- FOR ACTING AS CONSULTANT FOR THE M ARKETING DEPARTMENT OF THE COMPANY PRIOR TO 01.11.2004, I.E. UP TO 30.10.2004 AND IT IS THIS RECEIPT, WHICH HAS BEEN ASSESSED AS SALARY INCOME REJECTING THE AS SESSEES CLAIM THAT IT SHOULD BE ASSESSED AS HER PROFESSIONAL INCOME SO THAT SHE CAN CLAIM THE EXPENSES AND DEPRECIATION AMOUNTING TO RS.36,060/-. IN THE LIGH T OF THE RESOLUTION, THE GENUINENESS OF WHICH IS NOT IN DISPUTE, IT SEEMS CL EAR TO US THAT IT IS ONLY FROM 01.11.2004 THAT THE EMPLOYER EMPLOYEE RELATIONSHI P BETWEEN THE COMPANY AND THE ASSESSEE CAME INTO BEING, ON HER APPOINTMENT AS FULL TIME EXECUTIVE DIRECTOR OF THE COMPANY. THE ASSESSEE IS AN MBA SPECIALIZIN G IN MARKETING, FROM USA AS HAS BEEN RECORDED IN THE RESOLUTION AND IT WAS I N THIS CAPACITY THAT SHE WAS ACTING AS CONSULTANT FOR THE COMPANYS MARKETING DE PARTMENT AND IT IS IN THAT CAPACITY THAT SHE WAS PAID THE PROFESSIONAL FEES OF RS.1,25,000/-. THE CERTIFICATE OF TDS IN FORM NO.16A DESCRIBES THE PAYMENT AS FEE S FOR PROFESSIONAL OR TECHNICAL SERVICES AND THE SAME HAS ACTUALLY BEEN PAID ON 30.11.2004. AT PAGES 4 TO 6 OF THE PAPER BOOK, WE FIND COPIES OF S IMILAR TDS CERTIFICATES FOR THE YEARS ENDED 31.03.2002 TO 31.03.2004, IN WHICH SUCH PAYMENTS WERE DESCRIBED IN THE SAME MANNER. IT SEEMS TO US THAT THE DEPART MENTAL AUTHORITIES WERE NOT JUSTIFIED IN HOLDING THAT THE FEES OF RS.1,25,000/- RECEIVED BY THE ASSESSEE FOR ACTING AS THE CONSULTANT OF THE COMPANY UP TO 30.10 .2004 AS SALARY INCOME, MERELY BECAUSE OF SECTION 17(1)(IV) WHICH INCLUDED FEES ALSO AS SALARY. SECTION 17 MERELY INCLUDES CERTAIN ITEMS OF RECEIPTS AS SAL ARY BUT IN ORDER THAT A PARTICULAR 4 RECEIPT IS TREATED AS SALARY, IT IS OF FUNDAMENTAL IMPORTANCE THAT THE PAYER OF THE SUM AND THE RECIPIENT THEREOF SHOULD BE RELATED TO EACH OTHER AS EMPLOYER AND EMPLOYEE RESPECTIVELY. IF THE RECEIPT ARISES OUT O F SUCH RELATIONSHIP, ONLY THEN CAN IT BE ASSESSED UNDER THE HEAD SALARY. THAT R ELATIONSHIP IS MISSING IN SO FAR AS THE AMOUNT OF RS.1,25,000/- IS CONCERNED. IN TH IS VIEW OF THE MATTER, WE DISAPPROVE OF THE DECISION OF THE INCOME TAX AUTHOR ITIES AND HOLD THAT THE CONSULTANCY FEES OF RS.1,25,000/- WAS RIGHTLY DECLA RED BY THE ASSESSEE AS PROFESSIONAL INCOME. 6. AS REGARDS THE EXPENSES OF RS.36,060/-, THE SAME REQUIRES TO BE EXAMINED BY THE ASSESSING OFFICER. WE, THEREFORE, RESTORE THIS TO THE FILE OF THE ASSESSING OFFICER, WHO WILL TAKE A DECISION AS TO T HE ALLOWABILITY OF THE SAME AGAINST THE CONSULTANCY FEES RECEIVED BY THE ASSESS EE. NEEDLESS TO ADD THAT THE ASSESSEE SHALL BE GIVEN ADEQUATE OPPORTUNITY OF BEI NG HEARD. 7. GROUND NO.2 IS THUS ALLOWED AND GROUND NO.1 IS P ARTLY ALLOWED. 8. GROUND NO.3 IS DIRECTED AGAINST THE ASSESSMENT O F RS.9,60,000/- AS ANNUAL LETTING VALUE OF THE PROPERTY AT FLAT NO.12A /2, NEW SURYA KIRON SOCIETY, PAN GULLY, HUGHES ROAD, MUMBAI 400 026. IT WAS THE CONTENTION OF THE ASSESSEE THAT NO INCOME FROM THIS PROPERTY CAN BE A SSESSED UNDER SECTION 22 OF THE ACT, SINCE THE TRANSFEROR HAD RESERVED HER RIGH T OF RESIDENCE AND POSSESSION IN THE SAME. BEFORE THE ASSESSING OFFICER THE ASSE SSEE PRODUCED THE AGREEMENT FOR SALE OF THE FLAT AND DREW ATTENTION T O CLAUSE 4 THEREOF WHICH RESERVED THE RIGHT OF RESIDENCE IN THE FLAT TO THE TRANSFEROR FOR LIFE. THE CONTENTION WAS HOWEVER NOT ACCEPTED BY THE ASSESSING OFFICER W HO HELD THAT SINCE THE ASSESSEE WAS THE OWNER OF THE FLAT, THE ANNUAL LETT ING VALUE OF THE SAME 5 REQUIRES TO BE ASSESSED UNDER SECTION 22. HE ALSO OBTAINED A LETTER FROM THE SECRETARY OF THE HOUSING SOCIETY THAT FROM 13.05.19 91 THE FLAT WAS TRANSFERRED IN THE NAME OF THE ASSESSEE JOINTLY WITH HER SPOUSE. THE SHARE CERTIFICATE IN THE HOUSING SOCIETY ALSO STOOD IN THE NAME OF THE ASSES SEE AND HER HUSBAND JOINTLY. AS REGARDS THE ALV, THE ASSESSING OFFICER ESTIMATED THE SAME AT RS.80,000/- PER MONTH AND THUS INCLUDED RS.9,60,000/- UNDER THE HEA D INCOME FROM HOUSE PROPERTY. THE ASSESSEES HALF SHARE WAS ASSESSED UNDER SECTION 22. THE SAME HAVING BEEN CONFIRMED BY THE CIT(A), THE ASSESSEE I S IN FURTHER APPEAL BEFORE US. 9. THE CONTENTION BEFORE US ON BEHALF OF THE ASSESS EE IS THAT THOUGH SECTION 22 WOULD APPLY, BUT SECTION 23(1)(A) CANNOT APPLY A ND THE ALV CANNOT BE COMPUTED BECAUSE OF THE INHERENT DISABILITY OF THE ASSESSEE IN NOT HAVING THE POSSESSION OF THE FLAT DUE TO THE RESERVATION OF TH E RIGHT OF RESIDENCE. IT IS THUS CONTENDED THAT NO INCOME CAN BE COMPUTED UNDER SECT ION 23(1)(A). IN THE ALTERNATIVE IT IS CLAIMED THAT THE ANNUAL LETTING V ALUE WAS ARBITRARILY TAKEN AT RS.80,000/- PER MONTH WHEREAS AS PER THE CERTIFICAT E GIVEN BY THE HOUSING SOCIETY THE RATABLE VALUE OF THE FLAT FOR THE YEAR 2007-08 WAS ONLY RS.8,547/-. 10. WE ARE UNABLE TO GIVE EFFECT TO THE MAIN CONTEN TION OF THE ASSESSEE THAT SECTION 23(1)(A) CANNOT BE INVOKED TO THE ASSESSEE S CASE BECAUSE SHE DID NOT HAVE POSSESSION OF THE PROPERTY AND COULD NOT LET O UT THE SAME BECAUSE OF A LEGAL DISABILITY, VIZ. THAT THE TRANSFEROR HAD RESE RVED A RIGHT OF RESIDENCE IN HER FAVOUR FOR LIFE. IN THE CASE OF D M VAKIL VS. CIT (1946) 14 ITR 298 (BOM), THE BOMBAY HIGH COURT WAS CONCERNED WITH A SIMILAR SITU ATION. SECTION 9 OF THE INDIAN INCOME-TAX ACT, 1922, PROVIDED FOR TAX TO BE PAID BY AN ASSESSEE IN 6 RESPECT OF THE BONA FIDE ANNUAL VALUE OF PROPERTY C ONSISTING OF BUILDINGS. IN THAT CASE THE LADY APPOINTED HER HUSBAND, SON AND DAUGHT ERS AS TRUSTEES UNDER HER LAST WILL. IN CLAUSE 5 OF THE WILL IT WAS PROVIDED THAT DURING THE LIFETIME OF THE HUSBAND OF THE LADY, HE, HIS SON AND ONE DAUGHTER S HALL HAVE THE RIGHT TO USE AND OCCUPY FREE OF RENT SUCH PORTION OF THE PROPERTY AT WARDEN ROAD, MUMBAI, AS WAS AT THE TIME OF MAKING THE WILL OCCUPIED BY THE LADY AND OTHER MEMBERS OF THE FAMILY. THE CLAUSE ALSO PROVIDED THAT SUCH OF THE CHILDREN AND GRANDCHILDREN OF THE LADY AS MIGHT BE INVITED WERE ALSO TO HAVE A RI GHT OF RESIDENCE IN THE HOUSE BUT NONE OTHERS. IN THE ASSESSMENT OF THE TRUSTEES UNDER THE INCOME-TAX ACT, THEY CONTENDED THAT THEY COULD NOT BE SAID TO HAVE REALISED ANY INCOME WHATSOEVER FROM THE TRUST PROPERTY WHICH COULD BE C OMPUTED UNDER SECTION 9 AND THEY WERE ACCORDINGLY NOT LIABLE TO PAY ANY INCOME- TAX. THE ARGUMENT DID NOT FIND FAVOUR WITH THE INCOME TAX AUTHORITIES OR THE TRIBUNAL AND BEFORE THE HIGH COURT IT WAS CONTENDED BY THE TRUSTEES THAT THEY WE RE PREVENTED FROM LETTING OUT THE PROPERTY TO ANY ONE BY VIRTUE OF THE CLAUSE IN THE WILL AND THEREFORE NO INCOME CAN BE ASSESSED UNDER SECTION 9. IT MAY BE NOTICED THAT THE CONTENTION OF THE ASSESSEE IN THE CASE BEFORE US IS ALSO THE SAME THO UGH IT WAS COSMETICALLY PUT IN A DIFFERENT WAY TO APPEAR AS IF THE ASSESSEE WAS NO T CHALLENGING THE APPLICABILITY OF SECTION 22 BUT WAS ONLY CHALLENGING THE COMPUTAT ION OF THE ALV UNDER SECTION 23(1)(A). IN OUR OPINION, THIS DISTINCTION IS ONLY SUPERFICIAL AND DOES NOT AFFECT THE SUBSTANCE OF THE MATTER OR THE APPLICABILITY OF THE JUDGMENT CITED ABOVE. REJECTING THE CONTENTION OF THE TRUSTEES, THE BOMBA Y HIGH COURT HELD THAT THE INCOME FROM PROPERTY IS AN ARTIFICIALLY DEFINED INC OME AND THE LIABILITY ARISES FROM THE FACT THAT THE ASSESSEE IS THE OWNER OF THE PROP ERTY AND, THEREFORE, BY REASON 7 OF THE FACT THAT THE PROPERTY IS NOT LET OUT, THE A SSESSEE DOES NOT ESCAPE TAXATION. IT WAS FURTHER OBSERVED THAT THE CLAUSE IN THE WILL RESERVING THE RIGHT OF RESIDENCE TO THE ASSESSEES HUSBAND, SON AND DAUGHTER AND FOR OTHERS WHO WERE INVITED TO COME AND RESIDE IN THE HOUSE MADE NO DIFFERENCE TO THE LEGAL POSITION BECAUSE THE LIABILITY TO TAX, IT WAS HELD, DOES NOT DEPEND ON THE POWER OF THE OWNER TO LET THE PROPERTY, AS IT ALSO DOES NOT DEPEND ON THE CAP ACITY OF THE OWNER TO RECEIVE THE BONA FIDE ANNUAL VALUE OF THE PROPERTY . IN A SEPARATE BUT CONCURRING JUDGMENT, HONBLE JUSTICE CHAGLA OBSERVED: - THE SCHEME OF THE INCOME-TAX ACT IS THAT THE INCOME FROM PROPERTY WHICH IS MADE LIABLE TO TAX IS NOT THE ACTUAL INCOME BUT AN ARTIFICIAL OR STATUTORY INCOME AS DEF INED IN SECTION 9 AND THAT ARTIFICIAL OR STATUTORY INCOME IS THE BONA FIDE ANN UAL VALUE OF THE PROPERTY. THEREFORE THE FACT THAT THE OWNER OF THE PROPERTY R ECEIVES NO INCOME IN FACT OR EVEN THAT THERE IS NO POSSIBILITY OF HIS RECEIVING AN INCOME IS IRRELEVANT FOR THE CONSIDERATION OF THE QUESTION AS TO WHAT THE ARTIFI CIAL OR STATUTORY INCOME OF AN ASSESSEE IS FROM PROPERTY. THE TEST AND THE ONLY T EST LAID DOWN IN THE ACT IS THE BONA FIDE ANNUAL VALUE OF THE PROPERTY, AND IN THE CASE OF EVERY PROPERTY THAT TEST CAN BE COMPLIED WITH AND THE ANNUAL VALUE OF THE PR OPERTY CAN BE DETERMINED. THEREFORE WHAT THE ACT DOES IS TO MAKE THE ANNUAL R ENTAL VALUE OF THE PROPERTY THE INCOME OF THE OWNER OF THAT PROPERTY AND IT IS THAT INCOME THAT HAS GOT TO BE TAXED UNDER THE ACT . 11. THIS JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IS A COMPLETE ANSWER TO THE CONTENTION OF THE ASSESSEE IN THE PRESENT CASE BASED ON THE CLAUSE IN THE TRANSFER DEED RESERVING THE RIGHT OF RESIDENCE TO T HE TRANSFEROR FOR LIFE. THE RELEVANT CLAUSE IN THE TRANSFER AGREEMENT DATED 12. 12.1990 IS CLAUSE NO. 4 AND 8 IS REPRODUCED IN PAGE 5 OF THE ORDER OF THE CIT(A). IN SUBSTANCE IT SAYS THAT EVEN AFTER THE TRANSFEREES HAVE PAID THE FULL PRICE OF T HE FLAT TO THE TRANSFEROR AND THE FLAT HAS BEEN TRANSFERRED IN THE NAMES OF THE TRANS FEREES IN THE RECORDS OF THE SOCIETY, THE TRANSFEROR SHALL CONTINUE TO RESIDE IN THE FLAT DURING HER LIFE AND THE FLAT SHALL CONTINUE TO BE IN HER POSSESSION FOR HER RESIDENCE AND IT WAS ONLY ON HER DEMISE THAT THE POSSESSION SHALL STAND AUTOMATI CALLY TRANSFERRED TO THE TRANSFEREES. NOTWITHSTANDING THIS CLAUSE, THE RULI NG OF THE HONBLE BOMBAY HIGH COURT CITED ABOVE WOULD APPLY. RESPECTFULLY FOLLOW ING THE SAID JUDGMENT, WE HOLD THAT BOTH SECTION 22 AS WELL AS SECTION 23(1)( A), WHICH IS ONLY THE COMPUTATION SECTION, APPLY AND THE INCOME TAX AUTHO RITIES WERE RIGHT IN ASSESSING THE ALV OF THE FLAT UNDER THE HEAD INCOM E FROM PROPERTY. WE MAY ADD THAT THE SAME VIEW HAS BEEN TAKEN BY THE CALCUT TA HIGH COURT IN THE CASE OF TRUSTEES TO THE DEBUTTAR ESTATE IF SRI SRI ISWAR RA DHA GOVINDA JEW VS. CIT (1972) 84 ITR 150 (CAL), WHERE THERE WERE RESTRICTI ONS ON LETTING OUT OF ONE OF THE PROPERTIES BY THE TRUSTEES. IN THIS CASE IT WAS HE LD THAT WHILE ANY RESTRICTIONS IN A WILL OR DEED OF DEDICATION ON THE LETTING OF THE PR OPERTY MAY REDUCE THE ANNUAL LETTING VALUE, IT CANNOT BE SAID THAT BECAUSE OF TH E RESTRICTIONS THERE CAN BE NO ANNUAL INCOME WHICH CAN BE DEEMED TO ARISE FROM THE PROPERTY. 12. THE LEARNED REPRESENTATIVE FOR THE ASSESSEE RAI SED A POINT TO THE EFFECT THAT UNDER SECTION 23(1)(A) IT IS NOT OPEN TO THE I NCOME TAX AUTHORITIES TO ASSESS THE ANNUAL VALUE OF THE PROPERTY ON THE BASIS OF TH E PREVAILING RENTALS AND THEY CAN ONLY ASSESS THE ANNUAL VALUE OF THE VERY PROPER TY AS IS CLEAR FROM THE WORDS THE SUM FOR WHICH THE PROPERTY AND IF THAT IS THE STATUTORY PROVISION, THEN IT I S CLEAR THAT IF THE PROPERTY CANNOT BE LET OUT DUE TO THE RESERVATION OF THE RIGHT OF 9 RESIDENCE FOR LIFE OF THE TRANSFEROR, THEN LEGALLY THE ANNUAL LETTING VALUE THEREOF CANNOT BE ASSESSED TO TAX. AT FIRST BLUSH THIS WOU LD APPEAR TO BE A NOVEL CONTENTION, BUT ON CLOSER SCRUTINY IT SEEMS TO US T HAT THIS IS ONLY A DIFFERENT WAY OF PUTTING FORTH THE SUBMISSION, EARLIER DEALT WITH BY US, TO THE EFFECT THAT BECAUSE OF THE RESERVATION OF THE RIGHT OF RESIDENCE FOR LIFE OF THE TRANSFEROR THERE IS A DISABILITY ON THE PART OF THE OWNER TO LET OUT THE PROPERTY AND THEREFORE ITS ANNUAL VALUE CANNOT BE ASSESSED TO TAX. WE HAVE ALREADY D EALT WITH THE CONTENTION IN THE EARLIER PARAGRAPHS AND WE REITERATE THAT THE CO NTENTION IS TAKEN CARE OF BY THE JUDGMENT OF THE HONBLE BOMBAY HIGH COURT IN VAKIL S CASE SUPRA AND THERE IS NO NEED TO DEAL WITH IT OVER AGAIN. 13. THAT TAKES US TO THE QUESTION AS TO WHAT WOULD BE THE ANNUAL LETTING VALUE OF THE PROPERTY. THE ASSESSING OFFICER HAS T AKEN THE ALV AT RS.80,000/- PER MONTH CONSIDERING THE LOCALITY IN WHICH THE FLA T IS SITUATED AND ITS AREA WHICH IS 486 SQ. FT. HE HAS NOT HOWEVER STATED THE BASIS ON WHICH THE FIGURE WAS ESTIMATED BY HIM AND THE STATEMENT MADE BY HIM THAT THE RENT WAS ESTIMATED CONSIDERING THE AREA AND LOCALITY IS TOO VAGUE TO B E GIVEN EFFECT TO. THE ASSESSEE RELIED ON THE CERTIFICATE GIVEN BY THE HOU SING SOCIETY SHOWING THE RATABLE VALUE OF THE FLAT AT RS.8,547/-. HOWEVER, THE CIT(A) HAS NOT GIVEN ANY DEFINITE FINDING AS TO WHY HE DID NOT ACCEPT THE SA ME. FROM THE MATERIAL ON RECORD IT IS NOT POSSIBLE FOR US TO COME TO A DEFIN ITE CONCLUSION AS TO WHAT WOULD BE THE CORRECT ALV OF THE PROPERTY. WE MAY ALSO NO TICE THAT IN THE CALCUTTA HIGH COURT JUDGMENT CITED ABOVE IT HAS BEEN STATED THAT ANY RESTRICTIVE CLAUSE IN THE DOCUMENT MAY REDUCE THE ALV. IN THIS VIEW OF THE M ATTER, WE SET ASIDE THE COMPUTATION PART OF THE INCOME FROM THE FLAT AND RE STORE THE SAME TO THE FILE OF 10 THE ASSESSING OFFICER, WHO SHALL TAKE A FRESH DECIS ION ABOUT THE SAME, HAVING REGARD TO THE FACTS AND THE LEGAL POSITION VIS--VI S SECTION 23(1)(A) AND ALSO AFTER CONSIDERING THE EVIDENCE ADDUCED BY THE ASSESSEE, F OR WHICH SUFFICIENT OPPORTUNITY IS DIRECTED TO BE GIVEN. WE HOLD ACCOR DINGLY AND ALLOW THE GROUND IN PART. 14. GROUND NO.4 IS THAT THE CIT(A) DID NOT DECIDE T HE GROUND RELATING TO THE INTEREST UNDER SECTION 234B. WE ARE HOWEVER OF THE VIEW, IN THE ABSENCE OF ANY SPECIFIC ARGUMENTS QUESTIONING THE CHARGEABILITY OF THE INTEREST, THAT THE ASSESSEE WOULD BE ENTITLED TO CONSEQUENTIAL RELIEF, IF ANY. 15. IN THE RESULT, THE APPEAL IS PARTLY ALLOWED. ORDER PRONOUNCED ON 4 TH FEBRUARY 2010. SD/- SD/- (RAJENDRA SINGH) (R V EASWAR) ACCOUNTANT MEMBER SENIOR VICE PRESIDENT MUMBAI, DATED 4 TH FEBRUARY 2010 SALDANHA COPY TO: 1. MRS VILINA PRAVIN SHETH V K BESWAL & CO., 410, REWA CHAMBERS NEW MARINE LINES, MUMBAI 400 020 2. ITO -17(3)(4) 3. CIT-17 4. CIT(A)-XXVII 5. DR F BENCH TRUE COPY BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI