SACHIN SHARAD PILGAONKAR , Mumbai V. ACIT-16(1), Mumbai

ITA 2378/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 7918 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 8 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-01-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2013-2014
• Appeal Filed On: 15-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: T S KHALSA L D
• Assessee Lawyers: ASHOK PATIL LD
• Keywords: Condonation of delay
• Section: 143(3); 250; 274

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL G BENCH, MUMBAI , , BEFORE HONBLE SHRI MAHAVIR SINGH, VP AND HONBLE SHRI MANOJ KUMAR AGGARWAL, AM (HEARING THROUGH VIDEO CONFERENCING MODE) ./ I.T.A. NO.2378/MUM/2019 ( / ASSESSMENT YEAR: 2013-14) SACHIN SHARAD PILGAONKAR A/9, JUHU APARTMENTS JUHU TARA ROAD, SANTACRUZ (W) MUMBAI-400 049. / VS. A CIT - 16 (1 ) AAYKAR BHAWAN M.K.ROAD MUMBAI-400 020. !' ./ ./PAN/GIR NO. AAMPP-9852-H ( '$ /APPELLANT ) : ( %&'$ / RESPONDENT ) ASSESSEE BY : SHRI ASHOK PATIL-LD. AR REVENUE BY : SHRI T.S. KHALSA- LD. SR.DR / DATE OF HEARING : 14/01/2021 / DATE OF PRONOUNCEMENT : 14/01/2021 / O R D E R MANOJ KUMAR AGGARWAL (ACCOUNTANT MEMBER) 1. AFORESAID APPEAL BY ASSESSEE FOR ASSESSMENT YEAR 2013-14, CONTESTS THE ORDER OF LD. COMMISSIONER OF INCOME TA X (APPEALS) - 4, MUMBAI [CIT(A)], APPEAL NO.CIT(A)-4/IT-206/ACIT1 6(1)/2015-16 DATED 14/05/2018 QUA CONFIRMATION OF CERTAIN ADDITION OF RS.2.26 LACS, BEING 8% OF BOOK VALUE OF THE PROPERTY. 2. THE APPEAL HAS BEEN FILED WITH A DELAY OF 250 DA YS, THE CONDONATION OF WHICH HAS BEEN SOUGHT BY LD. AR ON T HE STRENGTH OF 2 CONDONATION PETITION DATED 10/04/2019 WHICH IS SUPP ORTED BY THE ASSESSEES AFFIDAVIT. IT HAS BEEN SUBMITTED THAT TH E APPELLATE ORDER GOT MISPLACED BY ASSESSEES STAFF AND THE SAME REMA INED TO BE COMMUNICATED TO ASSESSEES CHARTERED ACCOUNTANT. TH IS FACT CAME TO LIGHT UPON RECEIPT OF SHOW-CAUSE NOTICE U/S 274 R.W.S. 271(1)(C). THEREAFTER, THE ASSESSEE TOOK IMMEDIATE STEP TO FIL E THE APPEAL. UPON PERUSAL OF THESE DOCUMENTS, THE BENCH FORMED A N OPINION THAT THE ASSESSEE SUCCESSFULLY ESTABLISHED REASONAB LE CAUSE IN LATE FILING OF APPEAL AND THEREFORE, THE DELAY IS C ONDONED AND WE PROCEED TO ADJUDICATE THE APPEAL ON MERITS. 3. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED RELEVANT MATERIAL ON RECORD INCLUDING DOCUMENTS PLA CED IN THE PAPER-BOOK. OUR ADJUDICATION TO THE SUBJECT MATTER OF APPEAL WOULD BE AS GIVEN IN SUCCEEDING PARAGRAPHS. 4.1 THE ASSESSEE BEING RESIDENT INDIVIDUAL WAS ASSE SSED FOR YEAR UNDER CONSIDERATION U/S 143(3) WHEREIN RETURNED INC OME OF RS.356.20 LACS E-FILED BY THE ASSESSEE ON 30/09/201 3 WAS ASSESSED AT RS.357.71 LACS AFTER CERTAIN ADDITIONS / DISALLOWANCES. THE ADDITION OF RS.1.50 LACS AS MADE UNDER THE HEAD INCOME FROM HOUSE PROPERTY IS THE SOLE SUBJECT MATTER OF PRESE NT APPEAL BEFORE US. THE ASSESSEE IS AN ACTOR, FILM PRODUCER AND DIR ECTOR IN MARATHI / HINDI TELEVISION SERIALS, GAMES SHOWS, FEATURE FI LM AND ADVERTISEMENT FILMS. 4.2 DURING ASSESSMENT PROCEEDINGS, IT TRANSPIRED TH AT THE ASSESSEE OFFERED DEEMED RENTAL INCOME OF RS.8,400/- AGAINST FLAT NO.2103, BLUE RIDGE, PUNE. THIS FLAT WAS IN SELF OC CUPATION. FINDING THE DEEMED RENTAL INCOME SO OFFERED TO BE O N THE LOWER 3 SIDE, THE ASSESSEE WAS SHOW-CAUSED AS TO WHY THE DE EMED RENTAL VALUE OF THE PROPERTY SHOULD NOT BE INCREASED. THE ASSESSEE SUBMITTED THAT NO RENTAL WAS RECEIVED FROM THE PROP ERTY AND THE INCOME WAS OFFERED ON THE BASIS OF MUNICIPAL VALUAT ION OF THE PROPERTY. HOWEVER, REJECTING THE SAME, LD. AO ESTIM ATED RENTAL INCOME @8% OF VALUE OF THE PROPERTY WHICH CAME TO R S.2.26 LACS. AFTER PROVIDING STANDARD DEDUCTION OF 30% U/S 24(A) AND AFTER DEDUCTING THE RENTAL INCOME OF RS.8,400/- AS ALREAD Y OFFERED TO TAX, THE NET ADDITION THUS CAME TO RS.1.50 LACS WHICH WA S ADDED TO THE INCOME OF THE ASSESSEE. THE STAND OF LD. AO, UPON C ONFIRMATION BY LD. CIT(A), IS IN FURTHER APPEAL BEFORE US. 5. THE LD. DR PLACED RELIANCE ON GOOGLE SEARCH RESU LTS FOR THE SUBMISSION THAT THE RENTAL VALUE AS ESTIMATED BY LD . AO WAS IN LINE WITH THE PREVAILING MARKET PRICES AND THEREFORE, TH E ADDITION MAY BE CONFIRMED. THE LD. AR, ON THE OTHER HAND, SUBMITTED THAT THE RENTAL INCOME AS OFFERED ON THE BASIS OF MUNICIPAL VALUATI ON WAS CORRECT APPROACH AS HELD IN VARIOUS JUDICIAL DECISIONS. 6. SO FAR AS THE FACTUAL MATRIX IS CONCERNED, THE S AME IS NOT UNDER DISPUTE. IT IS EVIDENT THAT THE ASSESSEE HAS OFFERED THE DEEMED RENTAL VALUE ON THE BASIS OF MUNICIPAL VALUA TION. THE PROPERTY HAS NOT BEEN LET OUT, AT ALL, DURING THE Y EAR. AS PER THE PROVISIONS OF SEC. 23(1)(A), THE ANNUAL VALUE OF SU CH PROPERTY SHALL BE DEEMED TO THE SUM FOR WHICH THE PROPERTY MIGHT R EASONABLY BE EXPECTED TO BE LET OUT FROM YEAR TO YEAR. 7. THE HONBLE BOMBAY HIGH COURT, IN THE CASE OF CIT V/S TIP TOP TYPOGRAPHY (2014 368 ITR 330) CONCURRED WITH FOLLOWING PRINCIPLES LAID DOWN BY FULL BENCH OF HONBLE DELHI HIGH COURT IN THE 4 CASE OF CIT V/S MANI KUMAR SUBBA (2011 333 ITR 838) FOR DETERMINATION OF ANNUAL LETTING VALUE OF THE PROPER TY: - (I) ALV WOULD BE THE SUM AT WHICH THE PROPERTY MAY BE REASONABLY LET OUT BY A WILLING LESSOR TO A WILLING LESSEE UNINFLUENCE D BY ANY EXTRANEOUS CIRCUMSTANCES. (II) AN INFLATED OR DEFLATED RENT BASED ON EXTRANE OUS CONSIDERATION MAY TAKE IT OUT OF THE BOUNDS OF REASONABLENESS. (III) ACTUAL RENT RECEIVED, IN NORMAL CIRCUMSTANCE S, WOULD BE A RELIABLE EVIDENCE UNLESS THE RENT IS INFLATED / DEFLATED BY REASON OF EXTRANEOUS CONSIDERATION. (IV) SUCH ALV, HOWEVER, CANNOT EXCEED THE STANDARD RENT AS PER THE RENT CONTROL LEGISLATION APPLICABLE TO THE PROPERTY. (V) IF STANDARD RENT HAS NOT BEEN FIXED BY THE REN T CONTROLLER, THEN IT IS THE DUTY OF THE ASSESSING OFFICER TO DETERMINE THE STAN DARD RENT AS PER THE PROVISIONS OF RENT CONTROL ENACTMENT. (VI) THE STANDARD RENT IS THE UPPER LIMIT, IF THE FAIR RENT IS LESS THAN THE STANDARD RENT, THEN IT IS THE FAIR RENT WHICH SHALL BE TAKEN AS ALV AND NOT THE STANDARD RENT. IT HAS BEEN HELD THAT ANNUAL LETTING VALUE (ALV) O F THE PROPERTY COULD NOT EXCEED STANDARD RENT AS PER THE RENT CONT ROL LEGISLATION AS APPLICABLE TO THE PROPERTY AND THE S TANDARD RENT IS THE UPPER LIMIT. ALV OF THE PROPERTY HAS TO BE DETE RMINED AT SUM AT WHICH PROPERTY MIGHT REASONABLY BE LET OUT BETWEEN WILLING PARTIES. WE FIND THAT THE METHODOLOGY AS ADOPTED BY LD. AO T O ESTIMATE THE INCOME @8% OF VALUE OF THE PROPERTY IS NOT IN ACCOR DANCE WITH THE ABOVE PRINCIPLES LAID DOWN BY HONBLE COURT AND THE REFORE, THE SAME COULD NOT BE SUSTAINED. NOTHING HAS BEEN BROUG HT ON RECORD BY LD. AO THAT THE AFORESAID ESTIMATION WAS THE APP ROXIMATE SUM BETWEEN WILLING PARTIES. THE ASSESSEE, ON THE OTHER HAND, HAS OFFERED THE RENT ON THE BASIS OF MUNICIPAL VALUATIO N WHICH IS IN ACCORDANCE WITH THE PRINCIPLE LAID DOWN BY HONBLE COURT AS ABOVE. THEREFORE, THE ESTIMATION THUS MADE AND CONFIRMED B Y LOWER AUTHORITIES COULD NOT BE SUSTAINED. WE DIRECT LD. A O TO ADOPT THE 5 ALV OF THE PROPERTY AT RS.8,400/-, BEING DEEMED REN TAL VALUE BASED ON MUNICIPAL VALUATION OF THE PROPERTY. 8. THE APPEAL STAND ALLOWED IN TERMS OF OUR ABOVE O RDER. ORDER PRONOUNCED ON 14 TH JANUARY, 2021. SD/- SD/- (MAHAVIR SINGH) (MANOJ KUMAR AGGARWAL) / VICE PRESIDENT / ACCOUNTANT MEMBER MUMBAI; DATED : 14/01/2021 SR.PS, JAISY VARGHESE / COPY OF THE ORDER FORWARDED TO : 1. '$ / THE APPELLANT 2. %&'$ / THE RESPONDENT 3. - ( ) / THE CIT(A) 4. - / CIT CONCERNED 5. ./% ( 0 , 0 , / DR, ITAT, MUMBAI 6. /123 / GUARD FILE / BY ORDER, / (DY./ASSTT.REGISTRAR) , / ITAT, MUMBAI.