SUNILLA SATINDERKUMAR MODY, MUMBAI V. ITO 12(2)(3), MUMBAI

ITA 1866/MUM/2014

• Counselvise Citation: 186619914 RSA 2014
• Duration Of Justice: 1 year(s) 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 11-06-2015
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 19-03-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A K DHONDIALDR
• Assessee Lawyers: MRS SUNILLA MODY IN PERSON

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI ,!' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.1866/MUM/2014 ASSESSMENT YEAR:2009-10 SUNILLA SATINDER KUMAR MODY, 72, SANGEETA, ARTHUR BUNDER ROAD, COLABA, MUMBAI-400005 / VS. ITO12(2)(3), AAYAKAR BAHWAN, MUMBAI-400020 / ASSESSEE / REVENUE P.A. NO. AAAPM9920B $%& / ASSESSEE BY MRS. SUNILLA MODY-ASSESSEE IN PERSON $%& / REVENUE BY SHRI A.K.DHONDIAL-DR / DATE OF HEARING 11/06/2015 & / DATE OF ORDER: 12/06/2015 &/ O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DA TED 17/12/2013 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI. THE ONLY GROUND RAISED IN THIS APPEAL PERTAINS TO U PHOLDING THAT ANNUAL LETTING VALUE OF HALF PORTION OF FLAT J OINTLY OWNED BY ASSESSEE WITH HER HUSBAND IS CORRECTLY ADOPTED B Y THE ASSESSING OFFICER AT RS.4,50,000/- IGNORING THE FAC T THAT THE PORTION OWNED BY THE ASSESSEE WAS NOT CAPABLE OF LE TTING OUT ITA NO.1866/MUM/2014 SUNILLA SATINDER KUMAR MODY 2 AT ALL AS AN INDEPENDENT DWELLING UNIT AND FURTHER ERRED IN OBSERVING THAT THE PROPERTY IN QUESTION, BEING FLAT NO.73, HAS NOT BEEN DECLARED BY THE HUSBAND OF THE ASSESSEE AS HIS OWN SELF OCCUPIED PROPERTY. ALTERNATIVELY, THE LD. COM MISSIONER OF INCOME TAX (APPEALS) HAS NOT CONSIDERED THE TAXATIO N DEDUCTION OF MUNICIPAL TAXES CHARGEABLE AT 83.5% IN RESPECT OF RENTED FLATS AS AGAINST NOMINAL MUNICIPAL TAXED PAYABLE FOR SELF OCCUPIED FLATS WHILE APPLYING DEEMING PROV ISIONS IN TERMS OF SECTION 23(4) IGNORING THE MUNICIPAL TAXES DEEMED TO BE PAYABLE BY SUCH LANDLORDS. 2. DURING HEARING OF THIS APPEAL, THE ASSESSEE APPEARED IN PERSON AND TOLD THE FACTS IDENTICAL TO THE GROUND RAISED. IT WAS CONTENDED THAT FIRSTLY THE SOCIETY I S NOT ALLOWING PAYING GUEST AND SECONDLY THE ONE ROOM CAN NOT FETCH THE RENT AS HAS BEEN ESTIMATED BY THE ASSESSI NG OFFICER ON THE OTHER HAND, SHRI A.K.DHONDIAL, LD. DR, DEFEN DED THE CONCLUSION ARRIVED AT IN THE IMPUGNED ORDER. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IF THE O BSERVATION MADE IN THE ASSESSMENT ORDER, LEADING TO ADDITION M ADE TO THE TOTAL INCOME, CONCLUSION DRAWN IN THE IMPUGNED ORDER, MATERIAL AVAILABLE ON RECORD, ASSERTIONS MADE BY TH E ASSESSEE AND THE LD. DR, IF KEPT IN JUXTAPOSITION AND ANALYZ ED, I FIND THAT THE ASSESSEE WAS HAVING TWO SELF OCCUPIED FLAT S, ONE AT RAKHI MAHAL, CHURCHGATE FOR WHICH, SHE CLAIM EXEMPT ION AS SELF OCCUPIED PROPERTY, AS HER MARRIED CHILDREN USE THE SAME, WHEN THEY COME TO INDIA FROM U.S.A. THE OTHER FLAT IS JOINTLY ITA NO.1866/MUM/2014 SUNILLA SATINDER KUMAR MODY 3 OWNED AND OCCUPIED WITH HER HUSBAND, SHRI SATENDRA KUMAR MODI. THE ASSESSEE DECLARED INCOME FROM THIS FLAT O F THE HALF PORTION (SANGEETA BUILDING) ON THE BASIS OF RATABLE VALUE AS DETERMINED BY THE BMC AND CLAIMED THAT HALF PORTION OF THE FLAT CANNOT BE PRACTICALLY BE LET OUT BY HER. THE ASSESSING OFFICER TOOK THE FAIR MARKET OF THIS PORTION OF THE FLAT AT RS.4,50,000/- PER YEAR I.E. RS.37,500/- PER MONTH F OR THE RENTAL VALUE PREVAILING IN OTHER FLATS ON THE BASIS OF LET OUT FLATS OF OTHER MEMBERS OF THE SOCIETY. RIGHT FROM A SSESSMENT STAGE, THE ASSESSEE TOOK THE PLEA THAT THE ASSESSEE CANNOT LATE OUT PART OF THE FLAT I.E. ONE ROOM TO A TENANT WHO HAS TO BE SPINSTER AND THE RENT FETCHED FOR THAT PORTION W OULD NOT BE AT ALL COMMENSURATE WITH THAT WHOLE FLAT AS HAS BEE N LET OUT BY THE OTHER MEMBERS IN THE BUILDING. BESIDES, IN THE CASE OF OTHER FLATS, THEY HAVE BEEN LET OUT WITH FURNITURE AND FIXTURES WHICH FETCH SUBSTANTIAL RENT ESPECIALLY FROM CORPOR ATE SECTOR. IT WAS ALSO CLAIMED THAT IF THE ASSESSEE COULD LET OUT ONE ROOM TO A SPINSTER/PAYING GUEST, WHICH WOULD NOT FE TCH RENT MORE THAN RS.10,000/- PER MONTH AS AGAINST RS.37,50 0/- PER MONTH ESTIMATED BY THE LD. ASSESSING OFFICER. IT WAS ALSO CONTENDED THAT IF ONE ROOM IS LET OUT, IT WILL SPOI L THE COMFORTS IN THEIR OLD AGE. IF THE TOTALITY OF FACTS ARE ANA LYZED, I FIND MERIT IN THE SUBMISSION OF THE ASSESSEE AS IN THE O LD AGE, THE ONE ROOM, IF RENTED OUT, MAY BE A CAUSE OF DISCOMFO RT AND IT IS ALWAYS NOT POSSIBLE TO RENT OUT ONE ROOM TO A FA MILY CONSISTING OF MANY MEMBERS AND FURTHER IT IS ALWAYS NOT POSSIBLE TO GET A SINGLE PERSON/SPINSTER FOR RENTIN G OUT THE ROOM. I NOTE THAT THE ASSESSING OFFICER HAS QUOTED SOME RENT OF ANOTHER FLATS RANGING BETWEEN RS.57,500/- TO RS. 90,000/-. ITA NO.1866/MUM/2014 SUNILLA SATINDER KUMAR MODY 4 HOWEVER, I FIND LITTLE SUBSTANCE IN THE OBSERVATION OF THE ASSESSING OFFICER BECAUSE THE RENT WHICH HAS BEEN M ENTIONED IS FOR THE COMPLETE FLAT AND NOT FOR A SINGLE ROOM. NORMALLY, EVERYBODY WANTS PRIVACY AND A SINGLE ROOM, WHEN THE LANDLORD IS RESIDING IN THE ONE PORTION OF THE FLAT CANNOT FETCH THE RENT AS HAS BEEN ESTIMATED BY THE ASSESSING OFF ICER. THE ASSESSING OFFICER ESTIMATED 50% OF THE INCOME FROM THE FLAT AND ASSESSED ACCORDINGLY. NORMALLY, IN ONE FLAT, T HERE IS A POSSIBILITY OF DRAWING ROOM, KITCHEN AND BATHROOM, BUT THE ASSESSEE IS HAVING ONLY ONE ROOM EXTRA, THEREFORE, THE STANDARD RENT, IGNORING ALL THESE FACTS, CANNOT BE SAID TO BE APPLICABLE FOR A SINGLE ROOM, WHERE THE OWNER OF TH E FLAT ARE ALSO RESIDING, THUS, I REDUCE THE INCOME FROM PART OF THE HOUSE PROPERTY AT RS.1,20,000/- IN PLACE OF RS.3,15 ,000/- ESTIMATED/UPHELD BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THUS, THE APPEAL OF THE ASSESSEE IS PART LY ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN T HE PRESENCE OF LEARNED DR AT THE CONCLUSION OF THE HEA RING ON 11 TH JUNE 2015. SD/- (JOGINDER SINGH) !' / JUDICIAL MEMBER MUMBAI; DATED : 12/06/2015 F{X~{T? P.S / ! &$)!*+,&+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI ITA NO.1866/MUM/2014 SUNILLA SATINDER KUMAR MODY 5 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. & / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI