N.M.G. ESTATES PVT. LTD, MUMBAI V. I.T.O. WARD 2(2)(3), MUMBAI

ITA 1705/MUM/2011

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3098 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 6 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: G
• Next Hearing Date: 08-09-2015
• Assessment Year: 2006-2007
• Appeal Filed On: 01-03-2011
• Court: TRIBUNAL
• Department Lawyers: S S KUMARAN
• Section: 143(3)

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES G, MUMBAI , , , BEFORE SHRI AMIT SHUKLA, JUDICIAL MEMBER, AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.1705/MUM/2011 ASSESSMENT YEAR: 2006-07 & ITA NO.1706/MUM/2011 ASSESSMENT YEAR: 2007-08 N.M.G. ESTATES PVT. LTD. 608, DALAMAL HOUSE, NARIMAN POINT MUMBAI -400023 / VS. I.T.O. WARD 2(2)(3), AAYAKAR BHAVAN, M.K. ROAD. MUMBAI- 400020 ( ASSESSEE ) ( REVENUE ) P.A. NO. AABCN3207E / ASSESSEE BY NONE / REVENUE BY SHRI S. S. KUMARAN ( D R) ! ' # / DATE OF HEARING : 8/09/2015 ' # / DATE OF ORDER: 30 /09/2015 / O R D E R PER ASHWANI TANEJA (ACCOUNTANT MEMBER): THESE APPEALS HAVE BEEN FILED BY THE ASSESSEE AGAIN ST THE ORDER OF LD. COMMISSIONER OF INCOME TAX (APPEALS) { IN SHORT, N.M.G. ESTATES PVT. LTD 2 CIT(A)}-5, MUMBAI DATED 30.11.2010 FOR THE ASSESSM ENT YEARS 2006-07 AND 2007-08, DECIDED AGAINST THE ASSESSMENT ORDER PASSED BY THE ASSESSING OFFICER (IN SHORT AO) U/S 143(3) OF THE ACT. 2. THE ONLY COMMON ISSUE RAISED BY THE ASSESSEE IN BO TH THE APPEALS IS ABOUT CHALLENGING THE ACTION OF LD. CIT(A), IN UPHOLDING THE ACTION OF THE AO IN ENHANCING THE REN T RECEIVED/RECEIVABLE FOR OFFICE PREMISES AT DALAMAL HOUSE AT RS.1,65,000/- P.M. COMPUTED @ OF RS.160/- PER SQ. FT.), AS AGAINST RS.30,000/- PER MONTH RECEIVED BY THE ASSES SEE AND CONSEQUENTLY, ENHANCING THE INCOME UNDER THE HEAD H OUSE PROPERTY BY RS.16,27,200/- FOR A.Y. 2006-07 AND RS.22,89,600/- FOR A.Y. 2007-08. 3. DURING THE HEARING, NONE APPEARED ON BEHALF OF THE ASSESSEE. 4. LD. DR ARGUED THE CASE ON BEHALF OF THE REVENUE. 5. IT IS SEEN BY US THAT THE ASSESSEE HAS CONSISTENT HISTORY OF EITHER SEEKING REPEATED ADJOURNMENTS ON DATES OF HEARING, OR MAKING NON-APPEARANCE ON THE DATES GIVEN BY THE BENCH. KEEPING IN VIEW THESE FACTS AND CIRCUMSTANCES AND C ASUAL, NON-COOPERATIVE AND NEGLIGENT BEHAVIOR OF THE ASSES SEE, WE ARE LEFT WITH NO OPTION BUT TO DECIDE THIS APPEAL, ON T HE BASIS OF MATERIAL AVAILABLE ON RECORD.WE ARE NARRATING FURTH ER FACTS, JUST TO GIVE A BRIEF HISTORY OF THE RESPONSE GIVEN BY THE N.M.G. ESTATES PVT. LTD 3 ASSESSEE AND ITS COUNSEL ON THE EARLIER OCCASIONS. IT IS SEEN BY US FROM THE PERUSAL OF FILE, THAT ON 20 TH MAY 2014, APPEARANCE WAS DONE BY MS. HETAL PANCHAL, CHARTERED ACCOUNTANT S FROM THE OFFICE OF M/S R.S. KHANDELWAL & ASSOCIATES, CH ARTERED ACCOUNTANTS AND FILED ADJOURNMENT LETTER ON THE GRO UND THAT MR. RAJIV KHANDELWAL, CHARTERED ACCOUNTANTS, WHO IS BRIEFED IN THE MATTER, IS SUFFERING WITH FEVER. ACCORDINGLY, AN ADJOURNMENT WAS GRANTED BY THE BENCH FOR 30 TH JULY 2014. AGAIN, ON THIS DATE, AN ADJOURNMENT LETTER WAS FILE D BY MS. HETAL PANCHAL, CHARTERED ACCOUNTANT, ON THE GROUND THAT MR. RAJIV KHANDELWAL WHO IS BRIEFED IN THE MATTER, IS O UT OF TOWN. ACCORDINGLY, THE BENCH AGAIN GRANTED ADJOURNMENT FO R 13.10.2014. ON THAT DAY I.E. 13 TH OCTOBER 2014, NONE APPEARED ON BEHALF OF THE ASSESSEE, BUT THE BENCH A DJOURNED THE CASE FOR 29.12.2014. ON THAT DATE, THE BENCH DI D NOT FUNCTION AND THEREFORE THE CASE WAS ADJOURNED FOR 4 TH MARCH 2015. ON THAT DATE, AGAIN, AN ADJOURNMENT LETTER WA S FILED BY MS. HETAL PANCHAL, CHARTERED ACCOUNTANT, ON THE GRO UND THAT CHARTERED ACCOUNTANT OF THE ASSESSEE COMPANY WAS IN PROCESS OF FILING OF PAPER BOOK. HONBLE BENCH WAS PLEASED TO GRANT ADJOURNMENT FOR 14 TH MAY 2015. ON THAT DATE, NONE APPEARED AGAIN, ON BEHALF OF THE ASSESSEE DESPITE THE FACT T HAT DATE OF CHOICE WAS GIVEN TO THE ASSESSEES COUNSEL AND DULY NOTED BY HER, AS PER ACKNOWLEDGMENT AVAILABLE ON FILE. HOWEV ER, BENCH GRANTED ADJOURNMENT FOR 11.06.2015, AND NOTICE BY R EGISTERED POST WAS ISSUED WHICH DID NOT COME BACK UNSERVED. O N THAT DATE, BENCH DID NOT FUNCTION AND THEREFORE CASE WAS ADJOURNED FOR 06.08.2015. ON THAT DATE, NONE APPEARED ON BEHA LF OF THE N.M.G. ESTATES PVT. LTD 4 ASSESSEE. THEREFORE, A NOTICE, FIXING THE HEARING F OR 08.09.2015, WAS SENT BY RPAD, WHICH HAS NOT COME BA CK UNSERVED. ON THIS DATE ALSO, NONE HAS APPEARED. THE REFORE, WE HAVE NO OTHER OPTION, BUT TO PROCEED ON THE BASIS OF RECORDS AVAILABLE BEFORE US. 6 . THE BRIEF FACTS ARE THAT IT WAS NOTED BY THE AO I N THE ASSESSMENT PROCEEDINGS THAT DURING THE YEAR, THE AS SESSEE HAS RECEIVED RENTAL INCOME FROM THE PROPERTY AT DAL AMAL HOUSE, NARIMAN POINT, MUMBAI, @ RS.13,000/- PER MON TH FOR LEASED OUT AREA ADMEASURING 1,380 SQ.FT. ACCORDING TO THE AO, THE RENT RECEIVED BY THE ASSESSEE WAS VERY LESS IN COMPARISON TO THE MARKET RATES. IT WAS SUBMITTED BY THE ASSESS EE THAT ASSESSEE HAD RECEIVED RENT @ OF RS.30,000/- PER MON TH AS AGAINST THE RATE-ABLE VALUE AS PER MUNICIPAL RECORD S FOR RS.22,220/- PER MONTH, BUT AO WAS NOT SATISFIED AND HE SUBSTITUTED THE VALUE IN THE ASSESSMENT ORDER AT RS.1,65,000/- PER MONTH COMPUTED @ OF RS.120/- PER SQ.FT. FOR LEASED OUT AREA OF 1,340 SQ. FT. 7 . BEING AGGRIEVED, THE ASSESSEE CONTESTED THE MATTE R BEFORE THE LD. CIT(A) AND SUBMITTED THAT THE RENT SHOWN BY THE ASSESSEE WAS IN EXCESS OF THE MUNICIPAL VALUE AND T HERE WAS NO BASIS WITH THE AO TO INCREASE ANNUAL VALUE ON TH E BASIS OF SURMISES AND CONJECTURES, AND THAT TOO IN ABSENCE O F THE ANY COGENT MATERIAL IN THE POSSESSION OF THE AO, INDICA TING THAT HIGHER AMOUNT WAS RECEIVED BY THE ASSESSEE. HOWEVER , LD. CIT(A) REJECTED THE SUBMISSIONS OF THE ASSESEE AND UPHELD THE N.M.G. ESTATES PVT. LTD 5 ORDER OF THE AO BY OBSERVING THAT THE AO HAS DETERM INED THE HIGHER RATE ON THE BASIS OF INQUIRIES. HE HAS BASED HIS VALUE ON THE BASIS OF INFORMATION GATHERED FROM REGISTRAR OF PROPERTIES AND ON SPOT INVESTIGATIONS CARRIED OUT T O ASCERTAIN THE PREVAILING RATES IN CLOSE VICINITY OF THE PROPE RTY. 8 . WE HAVE GONE THROUGH THE ORDERS OF BOTH THE AUTHO RITIES. IT IS OBSERVED BY US THAT NEITHER THERE IS ANY REFE RENCE OF ANY CONCRETE MATERIAL IN THE ASSESSMENT ORDER NOR ANY S UCH MATERIAL AS EVER BEEN CONFRONTED TO THE ASSESSEE. T HE AO HAS MADE GENERAL AND CASUAL REMARKS ABOUT MARKET RATES, NO SPECIFIC MATERIAL HAS BEEN PLACED ON RECORD BY THE AO. THUS, ORDER OF AO WAS IN VIOLATION OF PRINCIPLES OF NATUR AL JUSTICE AND WITHOUT ANY LEGAL BASIS. LD. CIT(A) HAS ALSO NOT TA KEN CARE TO EXAMINE ANY SUCH MATERIAL. THE FINDINGS GIVEN BY LD . CIT(A) ARE AGAIN CASUAL IN NATURE AND WITHOUT ANY BASIS. N ONE OF THE LOWER AUTHORITIES HAVE TAKEN CARE TO REFER TO CORRE CT POSITION OF LAW, IN THIS REGARD, AS HAS BEEN EXPLAINED TIME AND AGAIN BY VARIOUS COURTS INCLUDING A RECENT JUDGMENT OF HONB LE BOMBAY HIGH COURT IN THE CASE OF CIT VS . TIP TOP TYPOGRAPHY (368 ITR 330 ). 9. IN VIEW OF THESE FACTS AND CIRCUMSTANCES, WE FIND IT APPROPRIATE TO SEND THIS MATTER BACK TO THE FILE OF THE AO, FOR DECIDING THIS ISSUE AGAIN. THE AO IS DIRECTED TO PR OVIDE ALL THE MATERIAL THAT IS TO BE USED AGAINST THE ASSESSEE FO R THE PURPOSE OF NOTIONALLY INCREASING THE AMOUNT OF RENT , ABOVE THE AMOUNT, ACTUALLY RECEIVED BY THE ASSESSEE. THE AO S HALL ALSO N.M.G. ESTATES PVT. LTD 6 TAKE INTO CONSIDERATION, AFORESAID JUDGMENT OF HON BLE BOMBAY HIGH COURT AS WELL AS CORRECT POSITION OF LAW, AS W OULD BE APPLICABLE ON THE FACTS OF THIS CASE. BEFORE DECIDI NG THIS ISSUE, THE AO SHALL GIVE ADEQUATE OPPORTUNITY OF HEARING T O THE ASSESSEE, BEFORE PASSING THE FRESH ASSESSMENT ORDER . THE ASSESSEE SHALL EXTEND REQUISITE COOPERATION TO THE AO AND SHALL PLACE ALL THE DETAILS AND MATERIAL IN SUPPORT OF IT S CLAIM. 10 . IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALLOW ED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 30 TH SEPTEMBER 2015. SD/- (AMIT SHUKLA ) SD/- (ASHWANI TANEJA) '# / JUDICIAL MEMBER $# / ACCOUNTANT MEMBER ! MUMBAI; & DATED : 30/09/2015 CTX? P.S/. .. %'&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ( )* / THE APPELLANT 2. +,)* / THE RESPONDENT. 3. - - ( ( ) / THE CIT, MUMBAI. 4. - - / CIT(A)- , MUMBAI 5. 01 2 +3 , - ( # 3 4 , ! / DR, ITAT, MUMBAI 6. 2 5 6 ! / GUARD FILE. / BY ORDER, , 0( + //TRUE COPY// / (DY./ASSTT. REGISTRAR) , ! / ITAT, MUMBAI