Hebal Constructions Pvt. Ltd., CHENNAI V. DCIT Company Circle II(2), Chennai

ITA 2061/CHNY/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 8093 (ITAT-CHENNAI)
• Duration Of Justice: 5 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-12-2018
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 29-06-2018
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: BALINA SURESH BABUJCITD R
• Assessee Lawyers: V S JAYAKUMAR
• Keywords: Principle of natural justice

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : CHENNAI , . , BEFORE SHRI GEORGE MATHAN, JUDICIAL MEMBER & SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.2061/CHNY/2018 / ASSESSMENT YEAR : 2011-12 M/S.HEBAL CONSTRUCTIONS PVT LTD ., 173,HEBAL CENTRE,6,WELDERS STREET, ANNA SALAI,CHENNAI 600 002. VS. DEPUTY COMMISSIONER OF INCOME TAX, COMPANY CIRCLE-II(2), CHENNAI. [PAN AAACH 7416 C] ( / APPELLANT) ( /RESPONDENT) ! ' # / APPELLANT BY : MR.V.S.JAYAKUMAR,ADVOCATE $% ! ' # /RESPONDENT BY : MR.BALINA SURESH BABU,JCIT,D.R & ' ' () / DATE OF HEARING : 19 - 12 - 201 8 * ' () / DATE OF PRONOUNCEMENT : 24 - 12 - 201 8 / O R D E R PER GEORGE MATHAN, JUDICIAL MEMBER THIS IS AN APPEAL FILED BY THE ASSESSEE AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX (APPEALS)-6, CHENNA I IN ITA NO.67/CIT(A)-6/2014-15 DATED 30.11.2017 FOR TH E ASSESSMENT YEAR 2011-12. 2. MR.V.S.JAYAKUMAR REPRESENTED ON BEHALF OF THE A SSESSEE AND MR.BALINA SURESH BABU REPRESENTED ON BEHALF OF THE REVENUE. ITA NO.2061 /CHNY/2018 :- 2 -: 3. THE APPEAL FILED BY THE ASSESSEE IS DELAYED BY 121 DAYS FOR WHICH THE ASSESSEE HAS FILED AN AFFIDAVIT FOR CONDONATION OF DELAY. THE DELAY IS ON ACCOUNT OF MISPLACE OF THE ORDER OF THE CIT(APPEALS ) BY ONE OF THE EMPLOYEES, WHO WAS SUBSEQUENTLY REMOVED FROM ASSESS EE-COMPANY. IT WAS A PRAYER THAT THE DELAY MAY BE CONDONED. THE LD.D.R DID NOT RAISE SERIOUS OBJECTIONS. WE HAVE CONSIDERED THE SUBMISSIONS OF B OTH SIDES. AS IT IS NOTICED THAT THE ASSESSEE HAS EXPLAINED THE REASONS FOR THE DELAY AND THE SAME IS FOUND TO BE REASONABLE AND BEYOND THE CONTR OL OF ASSESSEE, IN THE INTEREST OF NATURAL JUSTICE, THE DELAY IN FILING TH E APPEAL IS CONDONED AND THE APPEAL IS DISPOSED OF ON MERIT. 4. IT WAS SUBMITTED BY LD.A.R THAT THE ONLY ISSUE IN THIS APPEAL WAS AGAINST THE ACTION OF THE LD.CIT(A) UPHOLDING THE D ETERMINATION OF THE RENTAL INCOME AS MADE BY LD. ASSESSING OFFICER BY A PPLYING PROVISIONS OF THE SECTION 23(1)(A) OF THE ACT. IT WAS A SUBMISSION TH AT THE BUSINESS OF THE ASSESSEE WAS CONSTRUCTION AND LETTING OUT PROPERTIE S. IT WAS A SUBMISSION THAT THE ASSESSEE HAD CONSTRUCTED A FIVE STOREY BUI LDING. IT WAS A SUBMISSION THAT THE PROPERTY OF THE ASSESSEE WAS AT ANNA SALAI, CHENNAI AND ASSESSEE HAD DURING RELEVANT ASSESSMENT YEAR, RENTE D OUT THE SECOND FLOOR OF THE BUILDING; THE BASEMENT WAS USED FOR CAR-PARK ING AND THIRD AND FOURTH FLOOR WAS VACANT. IT WAS A SUBMISSION THAT THE FIRS T FLOOR WAS BEING USED BY THE ASSESSEE. THE LD. ASSESSING OFFICER HAD DEPUTED HIS INSPECTOR FOR VERIFICATION AND DETERMINING THE FAIR RENTAL VALUE. IT WAS A SUBMISSION THAT THE FAIR RENTAL VALUE WAS DETERMINED BY THE INSPECT OR ON THE BASIS OF LOCAL ITA NO.2061 /CHNY/2018 :- 3 -: ENQUIRY AND LD. ASSESSING OFFICER COMPLETED THE ASS ESSMENT BY APPLYING THE PROVISIONS OF THE SECTION 23(1)(A) OF THE ACT ON TH E BASIS OF INSPECTION REPORT BY THE INSPECTOR OF THE DEPARTMENT AND ASSESSED A NOTIONAL RENTAL INCOME FROM THE SAID PROPERTY AT ` 56 LAKHS IN RESPECT OF ALL FLOORS. IT WAS A SUBMISSION THAT THE DETERMINATION OF ANNUAL LETTING VALUE AS DONE BY THE LD. ASSESSING OFFICER WAS ERRONEOUS. IT WAS A SUBMISSIO N THAT IF AT ALL ANNUAL LETTING VALUE IN RESPECT OF THE SAID PROPERTY WAS T O BE DONE AS PART OF THE BUILDING WAS VACANT, THE SAME WAS TO BE DETERMINED BY APPLYING THE PROVISIONS OF THE SECTION 23(1)(C) OF THE ACT AND T HE ANNUAL LETTING VALUE WAS TO BE DETERMINED BY APPLYING THE PRINCIPLE LAID DOW N BY THE HONBLE SUPREME COURT IN THE CASE OF MRS.SHIELA KAUSHISH VS . CIT IN (1981) 24 CTR 351(SC) WHEREIN IT HAS BEEN HELD THAT THE STANDARD RENT DETERMINABLE UNDER THE PROVISIONS OF THE RENT ACT, WOULD BE THE ANNUAL VALUE. IT WAS A SUBMISSION THAT THE VALUATION DONE BY THE LD. ASSES SING OFFICER MAY BE DELETED. 5. IN REPLY, LD.D.R VEHEMENTLY SUPPORTED THE ORDER S OF THE LD. ASSESSING OFFICER AND THE LD.CIT(A). 6. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. A PERUSA L OF THE ASSESSMENT ORDER CLEARLY SHOWS THAT THE ASSESSING O FFICER HAS NOT POINTED OUT HOW THE INSPECTOR HAS DETERMINED THE FA IR RENT AT THE RATES DETERMINED BY HIM. OBVIOUSLY, WHEN THE MUNICI PAL TAX HAS BEEN PAID IN RESPECT OF THE PARTICULAR PROPERTY, THE ANNUAL LETTING VALUE ON THE VACANT PROPERTY CAN BE DETERMINED ONLY AT THE MUNIC IPAL RATABLE VALUE. IN ITA NO.2061 /CHNY/2018 :- 4 -: THE CIRCUMSTANCES, THE DETERMINATION OF THE ANNUAL LETTING VALUE AS DONE BY THE LD. ASSESSING OFFICER IS FOUND TO BE ERRONEOUS AND CONSEQUENTLY, THE ISSUE IS RESTORED TO THE FILE OF LD. ASSESSING OFFI CER FOR RE-ADJUDICATION BY APPLYING THE PROVISIONS OF THE SECTION 23(1)(C) OF THE ACT TO DETERMINE THE CORRECT ANNUAL LETTING VALUE. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 24 TH DECEMBER, 2018, AT CHENNAI. SD/ - SD/ - ( . ) (A.MOHAN ALANKAMONY) ! '# / ACCOUNTANT MEMBER ( ) (GEORGE MATHAN) $ '# / JUDICIAL MEMBER - ' / CHENNAI . / DATED: 24 TH DECEMBER, 2018. K S SUNDARAM / ' $(01 2 1( / COPY TO: 1 . ! / APPELLANT 3. & 3( () / CIT(A) 5. 145 $(6 / DR 2. $% ! / RESPONDENT 4. & 3( / CIT 6. 57 8' / GF