M/s Oriental Building & Furnishing Co. Ltd., New Delhi V. DCIT, New Delhi

ITA 192/DEL/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 2532 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 9 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-11-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2011-2012
• Appeal Filed On: 14-01-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PARAMITA M BISWAS
• Keywords: Rule of consistency
• Section: 143(3)

Judgement Text

1 ITA NO. 192/DEL/2016 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: E NEW DELHI BEFORE SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER AND MS SUCHITRA KAMBLE, JUDI CIAL MEMBER I.T.A. NO. 192/DEL/201 6 (A.Y 2011-12) ORIENTAL BUILDING & FURNISHING CO. LTD. C/O. RAVI GUPTA, ADVOCATE E-6A, KAILASH COLONY NEW DELHI AAACO0307R (APPELLANT) VS DCIT CIRCLE-13(1) NEW DELHI. (RESPONDENT) APPELLANT BY SH. RAJESH JAIN, CA RESPONDENT BY MS. PARAMITA M. BISWAS, CIT-DR ORDER PER SUCHITRA KAMBLE, JM THIS APPEAL IS FILED BY THE ASSESSEE AGAINST THE OR DER DATED 27/10/2015 PASSED BY CIT(A)-7, NEW DELHI FOR ASSESSMENT YEAR 2 011-12. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- 1. THAT THE LD. CIT (APPEAL) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THE A.O. WAS JUSTIFIED IN MAKING ADDITION OF R S 80,88,000/-, UNDER THE HEAD INCOME FROM 'HOUSE PROPERTY' BY INVOKING T HE PROVISIONS OF SECTION 23(1 )(A) OF THE INCOME TAX ACT, 1961 AND A DOPTING THE ANNUAL VALUE OF RESIDENTIAL HOUSE AT 9, FRIENDS ' COLONY, NEW DELHI AT A NOTIONAL VALUE OF RS.80,88,000/- P.A., AS AGAINST RS 24,000/ - P.A. DECLARED BY THE APPELLANT BEING THE ACTUAL RENT RECEIVED/RECEIVABLE . IN ANY CASE, THE VALUE DATE OF HEARING 13.11.2018 DATE OF PRONOUNCEMENT 13.11.2018 2 ITA NO. 192/DEL/2016 ADOPTED IS HIGHLY EXCESSIVE AND UNREASONABLE. 2. THAT THE LD. CIT (APPEAL) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE FACT THAT THE DEPARTMENT HAS BEEN CONSISTENTLY ASSESSING THE INCOME FROM HOUSE PROPERTY ON THE BAS IS OF THE ACTUAL RENT RECEIVED. 3. THAT THE LD. CIT (APPEAL) HAS ERRED IN LAW AND ON FACTS IN NOT APPRECIATING THE JUDICIAL PRONOUNCEMENTS WHICH HAVE CLEARLY LAID DOWN THAT THE OWNER CAN NEVER BE EXPECTED TO GET RENT EX CEEDING THE STANDARD RENT DETERMINED/DETERMINABLE UNDER THE DELHI RENT C ONTROL ACT. 4. THAT THE IMPUGNED APPELLATE ORDER IS ARBITRARY, ILLEGAL, BAD IN LAW AND IN VIOLATION OF RUDIMENTARY PRINCIPLES OF C ONTEMPORARY JURISPRUDENCE. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD/ALTER AN Y/ALL GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING OF THE APPE AL. 3. THE ASSESSEE COMPANY FILED RETURN OF INCOME DEC LARING INCOME OF RS. 61,98,590/- ON 27/3/2012. THE ASSESSING OFFICER PA SSED ASSESSMENT ORDER U/S 143(3) DATED 16/2/2014 DETERMINING THE TAXABLE INCOME AT RS.1,18,60,190/-. THE ASSESSING OFFICER MADE NET A DDITION OF RS. 56,61,600/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY BY INVOKI NG THE PROVISIONS OF SECTION 23 1A OF THE INCOME TAX ACT, 1961 AND ADOPT ED ANNUAL VALUE OF RESIDENTIAL HOUSE AT 9, FRIENDS COLONY, NEW DELHI A T RS.81,12,000/- PER ANNUM AS AGAINST RS.24,000/- PER ANNUM DECLARED BY THE ASSESSEE BEING THE ACTUAL RENT RECEIVED/RECEIVABLE. 4. BEING AGGRIEVED BY THE ASSESSMENT ORDER, THE ASS ESSEE FILED APPEAL BEFORE THE CIT (A). THE CIT (A) BY FOLLOWING THE EARLIER ORDER PASSED BY THE CIT (A) FOR ASSESSMENT YEAR 2004-05 AND 2009-10, DISMISSED THE APPEAL OF THE ASSESSEE. 3 ITA NO. 192/DEL/2016 5. THE LD. AR SUBMITTED THAT FOR A.YS. 2004-05 TO 2 009-10, THE TRIBUNAL ALLOWED THE APPEAL OF THE ASSESSEE ON THE VERY SAME ISSUE WHICH IS CONTESTED HEREIN BY THE ASSESSEE (ITA NO. 2010, 5762 TO 5766/ DEL/2013 A.YS. 2004-05 TO 2009-10 ORDER DATED 5/9/2016). 6. THE LD. DR RELIED UPON THE ORDER OF THE ASSESSIN G OFFICER AND THE ORDER OF THE CIT (A). 7. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE M ATERIAL AVAILABLE ON RECORD. THE LD. DR COULD NOT DISTINGUISH ANY FACTS OF THE PRESENT ASSESSMENT YEAR WITH THE EARLIER ASSESSMENT YEARS I.E. 2004-05 TO 2009-10 WHEREIN THE TRIBUNAL ALLOWED THE IDENTICAL ISSUE IN FAVOUR OF T HE ASSESSEE. THE TRIBUNAL HELD AS UNDER:- 10. CONSIDERING THE ABOVE SUBMISSIONS MADE BY THE PARTIES, AND HAVING GONE THROUGH THE LD. AUTHORIZED REPRESENTATI VE, WE FULLY CONCUR WITH THE CONTENTION OF LD. AUTHORIZED REPRESENTATIVE, WH ICH IS NOW ESTABLISHED PROPOSITION OF LAW THAT THE PRINCIPLE OF RES JUDIC ATA IS NOT APPLICABLE IN THE INCOME TAX ACT, BUT THE ASSESSING OFFICER IS REQUI RED TO FOLLOW THE RULE OF CONSISTENCY IN HIS/HER APPROACH ON AN IDENTICAL ISS UE, UNDER SIMILAR FACTS AND CIRCUMSTANCES IN A CASE OF THE ASSESSEE. UNDISP UTEDLY, IN EARLIER YEARS UNDER SIMILAR FACTS, THE ASSESSING OFFICER EVEN IN THE ASSESSMENT FRAMED U/S- 143(3) OF THE ACT HAS ACCEPTED THE CLAIMED ANNUAL R ENT. THE TRIBUNAL IN APPEAL FOR THE ASSESSMENT YEARS 1962-63 TO 1964-65 (SUPRA) IN THE CASE OF LATE S MOHAN SINGH THROUGH HIS LEGAL HEIR VS ITO HA S NOTED THAT A PORTION OF THE BUILDING IN QUESTION IN WHICH THAT ASSESSEE WAS RESIDING, BELONG TO THE ASSESSEE COMPANY BEFORE US. THE CONSTRUCTION COST O F THE BUILDING WAS RAISED TO RS. 1,75,000/- ON A COVERED AREA OF 4000 SQUARE YARD AND MUNICIPAL VALUE OF THE BUILDING WAS RS. 10,310/- FOR THOSE YEARS. D URING THOSE YEARS, THE ASSESSEE LATE S. MOHAN SINGH, WAS USING 7/15 PORTIO N OF THAT BUILDING AND WAS PAYING RENT OF RS. 8,400/-- PER YEAR. IN THE AS SESSMENT YEAR 1970-71, THE ASSESSING OFFICER IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT HAS 4 ITA NO. 192/DEL/2016 ACCEPTED THE INCOME FROM HOUSE PROPERLY IN QUESTION BY WAY OF RENT RECEIVABLE AT RS. 12,000/-. AGAIN, IN THE ASSESSMENT YEAR 1980 - 81, THE ASSESSING OFFICER IN THE ASSESSMENT FRAMED U/S 143(3) OF THE ACT, HAS ACCEPTED THE ALV OF THE PROPERTY IN QUESTION AT RS. 12,000/- , AGAIN IN THE ASSESSMENT ORDER U/S 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 1995- 96, THE ASSESSING OFFICER HAS ACCEPTED THE RENT FORM PROPERTY IN QUESTION AT RS. 24,000/-. 11. IN THE CASE OF THE CIT V ANGAEL INFIN (P) LTD. (SUPRA) STAND TAKEN BY THE REVENUE WAS THAT ASSESSEE COMPANY HAD RECEIVED RENT OF RS. 91,95,000/- ON THE PREMISES LET OUT BY IT AND HAD ALSO RECEIVED INTEREST FREE DEPOSIT OF RS. 3,22,50,000/- . THE ASSESSING OFFICE R NOTED THAT PROPERTY HAD BEEN LET OUT TO THE SISTER CONCERN OF THE ASSESSEE COMPANY AND, THEREFORE, THE INTEREST FREE DEPOSIT HAD BEEN INFLUENCED BY THE RE NT FIXED BY THE ASSESSEE COMPANY. HE HELD THAT THE PREMISES, THEREFORE, WAS NOT COVERED BY MAHARASTHRA RENT CONTROL ACT AND THE MANDATE OF SEC TION 23(F)(A) OF I.T. ACT, 1961 IS APPLICABLE. THE STAND OF THE REVENUE WAS OP POSED BY THE ASSESSEE WITH THE SUBMISSIONS THAT IN EARLIER ASSESSMENT YEA R, THE ASSESSEE WAS NOT QUESTIONED BY THE DEPARTMENT. THE SITUATION IN THE PREVIOUS ASSESSMENT YEAR AND THE ASSESSMENT YEAR UNDER CONSIDERATION WAS NOT CHANGED. THE HON'BLE HIGH COURT OF BOMBAY WAS PLEASED TO HOLD THAT WHERE IN PREVIOUS ASSESSMENT YEAR, ANNUAL VALUE OF SUIT PROPERTY WAS ALREADY DECIDED AND THERE WAS NO CHANGE IN SITUATION OF PREVIOUS ASSESS MENT YEAR AND THE ASSESSMENT YEAR UNDER CONSIDERATION, THEN ASSESSING OFFICER WAS NOT JUSTIFIED IN ADOPTING MANDATE OF SECTION 23(1 ){A) OF THE ACT FOR THE PURPOSE OF DECIDING ANNUAL VALUE OF SUITE PROPERTY. RESPECTFUL LY FOLLOWING THE RATIO LAID DOWN BY THE HON'BLE BOMBAY HON'BLE HIGH COURT IN TH IS CASE, WE HOLD THAT ASSESSING OFFICER WAS NOT JUSTIFIED IN VIOLATING TH E RULE OF CONSISTENCY ON THE ISSUE OF ALV OF THE PROPERTY IN QUESTION, ALREADY A CCEPTED BY THE REVENUE IN EARLY ASSESSMENT YEARS UNDER SIMILAR FACTS AND CIRCUMSTAN CES OF THE CASE. THE ASSESSING OFFICER IS THUS DIRECTED TO DELETE TH E ADDITIONS IN QUESTION MADE IN THE ASSESSMENT YEARS UNDER CONSIDERATION ON THE BASIS OF A NOTIONAL 5 ITA NO. 192/DEL/2016 VALUE OF RS.73,80,000/- PER ANNUM AS AGAINST RS. 24,000/- PER ANNUM DECLARED BY THE ASSESSEE BEING THE ANNUAL RENT RECE IVED OR RECEIVABLE. THE ISSUE RAISED IN THE GROUNDS IS THUS DECIDED IN FAVO UR OF THE ASSESSEE. KEEPING IN VIEW THESE FINDINGS, THE OTHER CONTENTIONS, RAIS ED BY THE LD. AUTHORIZED REPRESENTATIVE IN HIS SUBMISSIONS HAVE BECOME INFRU CTUOUS AND ACADEMIC ONLY AND THUS DO NOT NEED ANY ADJUDICATION. 12. IN THE RESULT, THE APPEALS ARE ALLOWED. WE FIND THAT THE ISSUE CONTESTED IN THE PRESENT APP EAL IS IDENTICAL TO THE ISSUE DECIDED IN ASSESSMENT YEARS 2004-05 TO 2009-1 0 BY THE TRIBUNAL. THEREFORE, THE ORDER OF THE CIT(A) IS SET ASIDE AND THE APPEAL OF THE ASSESSEE IS ALLOWED. 8. IN RESULT, THE APPEAL OF THE ASSESSEE IS ALLOWED . ORDER PRONOUNCED IN THE OPEN COURT ON 13 TH NOVEMBER, 2018 . SD/- SD/- (N. K. BILLAIYA) (SUCHITRA KAMBLE) ACCOUNTANT MEMBER JUDICIAL MEM BER DATED: 13/11/2018 R. NAHEED * COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT NEW DELHI 6 ITA NO. 192/DEL/2016 DATE OF DICTATION 13.11 .2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 13.11 .2018 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. PS/PS DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 1 3 .1 1 .2018 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 1 3 .1 1 .2018 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 1 3 .1 1 .2018 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK