RAMETI DEVI JAIN, MUMBAI V. ITO 12(30(2), MUMBAI

ITA 3268/MUM/2011

• Counselvise Citation: 326819914 RSA 2011
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 09-04-2012
• Assessment Year: 2006-2007
• Appeal Filed On: 25-04-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC BENCH: MUMBAI BEFORE SHRI R.S. PADVEKAR, JUDICIAL MEMBER ITA NOS. 3269 AND 3268 /MUM/2011 (ASSESSMENT YEARS: 2005-06 AND 2006-07) SMT. RAMETI DEVI JAIN, 82, MAKER CHAMBERS III, NARIMAN POINT, MUMBAI -400 021 ...... APPELLANT VS INCOME-TAX OFFICER 12(3)(2), AAYAKAR BHAVAN, 1ST FLOOR, M.K. ROAD, MUMBAI -400 020 ..... RESPONDENT PAN: AABPJ 1887 B APPELLANT BY: SHRI VIJAY MEHTA RESPONDENT BY: SHRI ATIQ AHMAD DATE OF HEARING: 09.04.2012 DATE OF PRONOUNCEMENT: 25.04.2012 O R D E R R.S. PADVEKAR, JM : THESE APPEALS ARE FILED BY THE ASSESSEE CHALLENGING THE RESPECTIVE IMPUGNED ORDERS OF THE LD. CIT (A)-41, M UMBAI FOR THE A.YS. 2005-06 & 2006-07. 2. THE FIRST COMMON ISSUE IN BOTH THE APPEALS IS TH E DETERMINATION OF THE ANNUAL LETTING VALUE OF THE PROPERTIES U/S.2 3 OF THE ACT. 3. SO FAR AS A.Y. 2005-06 IS CONCERNED, THE A.O. HA S OBSERVED THAT THE ASSESSEE HAS TWO RESIDENTIAL FLATS IN GRANT FIE LD JOGESHWARI. BOTH THE FLATS IS HAVING TOTAL AREA OF 39.90 SQ. METERS EACH AND THE ASSESSEE HAS DECLARED ` 882/- PER FLAT AS ANNUAL LETTING VALUE (ALV) BY AD OPTING MUNICIPAL RATEABLE VALUE. AS OBSERVED BY THE A.O. THE SAID FLATS ARE NOT SELF-OCCUPIED BY THE ASSESSEE. THE A.O. REJECT ED THE ANNUAL VALUATION DECLARED BY THE ASSESSEE AND HE ESTIMATED ALV OF THOSE TWO ITAS 3269 AND 3268/M/2011 SMT. RAMETI DEVI JAIN 2 FLATS AT ` 60,000/- PER ANNUM BY ESTIMATING THE RENT AT ` 2,500/- PER MONTH. THE A.O. ALSO ALLOWED THE DEDUCTION @ 30% U /S.24 OF THE ACT AND DETERMINED THE NET ANNUAL VALUE AT ` 48,000/- FOR THOSE TWO FLATS ON THE VIKROLI LINK ROAD, MUMBAI. 4. THE A.O. HAS FURTHER OBSERVED THAT THE ASSESSEE HAS SOLD ONE FLAT AT EL-DORDO AS PER AGREEMENT DATED 29.07.2004 AND HAS DECLARED THE ALV AT ` 345/- WHICH WAS AS PER THE MUNICIPAL RATEABLE VALUE. THE ASSESSEE HAS GIVEN THE SAID FLAT ON LEA VE & LICENSE BASIS FOR A SUM OF ` 11,500/- PER MONTH IN THE EARLIER YEAR. THE A.O. ESTIMATED THE ALV OF THE SAID FLAT FOR THE FOUR MON THS I.E. @ ` 46,000/- FROM APRIL TO JULY 2004 (BY ADOPTING ` 11,500/-) BY CONSIDERING THE ACTUAL RENT RECEIVED BY THE ASSESSEE. THE A.O. ALL OWED THE DEDUCTION AT 30% U/S.24. 5. IN THE A.Y. 2006-07 THE ONLY ISSUE IS IN RESPECT OF THE TWO FLATS IN THE GREEN FIELD SITUATE AT JOGESHWARI, VIKROLI L INK ROAD, MUMBAI - 400 093. THE A.O. ESTIMATED THE ALV OF THE SAID FL ATS AT ` 48,000/- AND ALSO THE DEDUCTION U/S.24 AND ESTIMATED THE NET ALV AT ` 33,600/-. 6. I HAVE HEARD THE PARTIES. SO FAR AS THE ISSUE O F THE DETERMINATION OF THE ALV IN RESPECT OF THE TWO FLAT S IN GREEN FIELD AT JOGESHWARI, VIKROLI LINK ROAD, MUMBAI -400 093 IS C ONCERNED, I FIND THAT THE A.O. HAS OBSERVED THAT THOSE FLATS WERE NO T SELF-OCCUPIED. NOTHING IS THERE ON RECORD TO SUGGEST THAT THOSE FL ATS WERE LET OUT. THE A.O. ESTIMATED THE ALV OF THE FLAT U/S.23(1)(A) WHI CH HAS NO BASIS IN BOTH THE ASSESSMENT ORDERS. IN THE CASE OF SHIELA KAUSHIK 131 ITR 435 (SC) IT IS HELD THAT FOR THE PURPOSE OF DETERMI NING THE ALV U/S.23(1)(A) THE STANDARD RENT UNDER THE APPLICABLE RENT CONTROL ACT SHOULD BE CONSIDERED. IF THE LOCAL AUTHORITY FOR T HE PURPOSE OF THE HOUSE TAX HAS DETERMINED THE VALUE THEN THAT SHOULD BE ADOPTED. IT IS PERTINENT TO NOTE HERE THAT IN THE CASE OF SHIELA K AUSHIK (SUPRA) THE HONBLE SUPREME COURT HAS CONSIDERED THE AMENDED SE C.23 OF THE ACT. I, THEREFORE, HOLD THAT THE A.O. WAS NOT JUSTIFIED IN ESTIMATING THE ALV ITAS 3269 AND 3268/M/2011 SMT. RAMETI DEVI JAIN 3 OF THOSE FLATS IN BOTH THE ASSESSMENT ORDERS ON ARB ITRARY BASIS. I, ACCORDINGLY, DIRECT THE A.O. TO ADOPT STANDARD RENT AS DETERMINED AS PER THE MAHARASHTRA RENT CONTROL ACT, 1999 IF AVAIL ABLE OR LATEST VALUATION MADE BY THE LOCAL AUTHORITY BRAHANMUMBAI MUNICIPAL CORPORATION (BMC) FOR THE PAYMENT OF THE PROPERTY T AX WHICHEVER IS HIGHER, AS ALV TO BE DETERMINED U/S.23(1)(A) OF THE ACT IN BOTH THE FINANCIAL YEARS RELEVANT TO A.YS. 2005-06 AND 2006- 07. ACCORDINGLY, GROUND NO.2 IN THE A.Y. 2006-07 IS ALLOWED FOR THE STATISTICAL PURPOSES. 7. SO FAR AS GROUND NO.3 IN A.Y. 2006-07 IS CONCERN ED, I FIND ONE FLAT AT EL-DORDO HAS BEEN LET OUT BY THE ASSESSEE O N THE MONTHLY RENT OF ` 11,500/-. THE A.O. HAS NOT DETERMINED THE ALV U/S .23(1)(A) OF THE ACT. THE A.O. SHOULD DETERMINE THE ALV OF T HE SAID FLAT AS PER OUR DIRECTIONS IN RESPECT OF GROUND NO.2 AND IF THE ACTUAL RENT RECEIVED BY THE ASSESSEE IS HIGHER AS U/S.23(1)(B) THEN THE SAME SHOULD BE ADOPTED. IN OUR OPINION, LAW IS CLEAR IF THE ACTUA L RENT RECEIVED BY THE ASSESSEE IS MORE THAN THE ALV DETERMINED U/S.23(1)( A) AND IN VIEW OF CLAUSE (B) TO SEC.23(1) ACTUAL RENT RECEIVED IS TO BE ADOPTED. IN THE PRESENT CASE, ACTUAL RENT RECEIVED BY THE ASSESSEE IS MORE THAN THE MUNICIPAL RATEABLE VALUE AND IN VIEW OF CLAUSE (B) TO SEC.23(1) THE A.O. HAS RIGHTLY ADOPTED THE SAID VALUE. I, ACCORDINGLY , CONFIRM THE ORDER OF THE LD. CIT (A) ON ONE FLAT AT EL-DORDO MUMBAI AND DISMISS GROUND NO.3 FOR A.Y. 2005-06. 8. SO FAR AS GROUND NO.4 FOR A.Y. 2005-06 IS CONCER NED, THE LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT IN VIEW OF TH E SMALLNESS OF AMOUNT OF QUANTUM INVOLVED, GROUND NO.4 IS NOT PRES SED. AS GROUND NO.4 IS NOT PRESSED THE SAME IS DISMISSED AS NOT PR ESSED. 9. OTHER GROUNDS IN BOTH THE APPEALS ARE GENERAL IN NATURE AND NO SPECIFIC ADJUDICATION IS CALLED FOR. ITAS 3269 AND 3268/M/2011 SMT. RAMETI DEVI JAIN 4 10. IN THE RESULT, APPEAL FOR A.Y. 2005-06 IS PARTL Y ALLOWED FOR THE STATISTICAL PURPOSES AND APPEAL FOR THE A.Y. 2006-0 7 IS ALLOWED FOR THE STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON THIS DAY OF 2 5TH APRIL 2012. SD/- ( R.S. PADVEKAR ) JUDICIAL MEMBER MUMBAI, DATE: 25TH APRIL 2012 COPY TO:- 1) THE APPELLANT. 2) THE RESPONDENT. 3) THE CIT (A)-41, MUMBAI. 4) THE CIT CENTRAL-III, MUMBAI. 5) THE D.R. SMC BENCH, MUMBAI. BY ORDER / / TRUE COPY / / ASSTT. REGISTRAR I.T.A.T., MUMBAI *CHAVAN