ASST CIT 16(3), MUMBAI V. RAVIJIBHAI L KAKADIA, MUMBAI

ITA 334/MUM/2014

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 2885 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 9 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2015
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: D
• Next Hearing Date: 07-10-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 13-01-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Keywords: Deemed owner of house property

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI D BENCH, MUMBAI BEFORE SHRI SHAILENDRA KUMAR YADAV, JUDICIAL MEMBER, AND SHRI RAJESH KUMAR, ACCOUNTANT MEMBER. ITA. NO. 334/MUM/2014 (ASSESSMENT YEAR:2010-11) ASSTT. COMMISSIONER OF INCOME-TAX-16(3), MATRU MANDIR, TARDEO ROAD, MUMBAI 400 007 APPELLANT VS. SHRI RAVJIBHAI L. KAKADIA 1001, PRASAD CHAMBERS, OPERA HOUSE, TATA ROAD NO.2, MUMBAI - 400004 RESPONDE NT PAN: AGQPK5038G /BY APPELLANT : SHRI VIVEK ANAND OJHA, D.R. /BY RESPONDENT : NONE /DATE OF HEARING : 07.10.2015 /DATE OF PRONOUNCEMENT : 28.10.2015 ORDER PER SHAILENDRA KUMAR YADAV, J.M: THIS APPEAL HAS BEEN FILED BY REVENUE AGAINST THE O RDER OF COMMISSIONER OF INCOME-TAX (APPEALS)-27, MUMBAI, DA TED 31.10.2013 FOR A.Y. 2010-11 ON FOLLOWING GROUNDS: ITA NO.334/MUM/14 A.Y. 10-11 [ACIT VS. SHRI RAVJIBH AI L. KAKADIA] PAGE 2 1. WHETHER ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT(A) WAS CORRECT IN HOLDING THE ASSE SSEE WAS ELIGIBLE FOR MUNICIPAL RATABLE VALUE EVEN THOUG H THE ASSESSEE HAS NOT OFFERED THE NOTIONAL INCOME ON DEEMED LET OUT PROPERTY OF THE TOTAL INVESTMENT MAD E TO ACQUIRE SUCH RESIDENTIAL AND COMMERCIAL PROPERTI ES? 2. WHETHER ON THE FACTS AND CIRCUMSTANCES OF CASE AND IN LAW, THE LD. CIT(A) WAS CORRECT IN HOLDING THE ASSE SSEE WAS ELIGIBLE FOR MUNICIPAL RATABLE VALUE EVEN THOUG H THE ASSESSEE HAS NEVER OFFERED THE NOTIONAL INCOME ON DEEMED LET OUT PROPERTY AND ASSESSING OFFICER COMPUTED NOTIONAL RENT @ 8.50% OF THE TOTAL INVESTMENT MADE TO ACQUIRE SUCH RESIDENTIAL AND COMMERCIAL PROPERTIES IN ORDER TO BRING THE SAME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ALLOWED MANDATORY DEDUCTION U/S 24(A) TO MEET THE BOTH THE ENDS OF JUSTICE? 2. ASSESSEE IS DEALING IN SHARES AND DERIVATIVES AN D HAS DERIVED INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES. THE RETURN OF INCOME FOR THE YEAR UNDER A PPEAL WAS FILED ON 07.10.2010 DECLARING TOTAL INCOME AT RS.78 ,19,640/-. ASSESSMENT U/S.143(3) WAS COMPLETED BY ASSESSING OF FICER ON DETERMINING TOTAL INCOME AT RS.80,76,900/-. ASSESS ING OFFICER OBSERVED THAT ASSESSEE WAS HAVING 11 FLATS AND SHOP S AT DIFFERENT LOCATIONS AND TOTAL INVESTMENTS MADE WAS SHOWN AT RS.2,02,94,506/-. ASSESSEE HAD OFFERED RS.12,50,00 0/- AS HOUSE PROPERTY INCOME. ONE FLAT AT DELAD OLPAD, SU RAT WAS IN READY POSSESSION AND TOTAL INVESTMENT VALUE IN THIS PROPERTY WAS RS.13,24,929/- BUT NO INCOME WAS OFFERED ON THE SAME. THE NOTIONAL INCOME FOR DEEMED LET OUT PROPERTIES W AS COMPUTED @ 8.50% OF TOTAL INVESTMENT OF THIS PROPER TY. THUS, ITA NO.334/MUM/14 A.Y. 10-11 [ACIT VS. SHRI RAVJIBH AI L. KAKADIA] PAGE 3 NOTIONAL INCOME DETERMINED WAS RS.78,333/- [RS.13,2 4,929 X 8.50% - 30% U/S.24(A)] AND ADDED THE TOTAL INCOME U NDER THE HEAD INCOME FROM HOUSE PROPERTIES. 3. MATTER WAS CARRIED BEFORE THE FIRST APPELLATE AU THORITY, WHEREIN VARIOUS CONTENTIONS WERE RAISED ON BEHALF O F ASSESSEE AND HAVING CONSIDERED THE SAME, CIT(A) GRANTED RELI EF TO ASSESSEE. SAME HAS BEEN OPPOSED ON BEHALF OF REVEN UE, INTER ALIA STATING THAT CIT(A) WAS NOT CORRECT IN HOLDING THAT ASSESSEE WAS ELIGIBLE FOR MUNICIPAL RATABLE VALUE, EVEN THOU GH THE ASSESSEE HAS NOT OFFERED THE NOTIONAL INCOME ON DEE MED LET OUT PROPERTY OF TOTAL INVESTMENT MADE TO ACQUIRE SUCH R ESIDENTIAL AND COMMERCIAL PROPERTIES. ACCORDINGLY, ORDER OF C IT(A) BE SET ASIDE AND THAT OF ASSESSING OFFICER BE RESTORED. N ONE APPEARED ON BEHALF OF ASSESSEE, SO, MATTER IS BEING DECIDED EX PARTE ON THE BASIS OF ARGUMENTS OF LEARNED DEPARTMENTAL REPRESENTATIVE AND MATERIAL ON RECORD. 4. AFTER GOING THROUGH ARGUMENTS OF LEARNED DEPART MENTAL REPRESENTATIVE AND MATERIAL AVAILABLE ON RECORD, WE FIND THAT STAND OF ASSESSEE HAS BEEN THAT ASSESSING OFFICER C OULD HAVE AT BEST ADOPTED THE MUNICIPAL RATABLE VALUE AS DEEMED VALUE OF PROPERTY IN QUESTION. IT HAS BEEN HELD IN VARIOUS CASES THAT WHAT IS TO BE BROUGHT TO TAX AS INCOME FROM HOUSE P ROPERTY U/S.23(1) IS HIGHER OF RENT ACTUALLY RECEIVED OR MU NICIPAL RATABLE VALUE OR THE STANDARD RENT AS PER RENT CONT ROL ACT. IN VIEW OF ABOVE, CIT(A) HELD THAT VALUE, WHICH COULD BE ADOPTED ITA NO.334/MUM/14 A.Y. 10-11 [ACIT VS. SHRI RAVJIBH AI L. KAKADIA] PAGE 4 BY ASSESSING OFFICER AS MUNICIPAL RATABLE VALUE EVE N WHILE BRINGING TO TAX DEEMED ANNUAL LETTING VALUE IN RESP ECT OF VACANT PROPERTIES. ACCORDINGLY, ASSESSING OFFICER WAS RIGHTLY DIRECTED TO VERIFY THE MUNICIPAL RATABLE VALUE IN R ESPECT OF ABOVE PROPERTIES AND MODIFY HIS ORDER. THIS VIEW I S FORTIFIED BY THE DECISION OF HONBLE SUPREME COURT IN CASE OF SH EILA KAUSHISH VS. CIT [1981] 131 ITR 435 (SC). IN VIEW OF THIS, ORDER OF CIT(A) NEEDS NO INTERFERENCE FROM OUR SIDE . WE UPHOLD THE SAME. 5. AS A RESULT, APPEAL FILED BY REVENUE IS DISMISSE D. PRONOUNCED IN THE OPEN COURT ON THIS THE 28TH DAY OF OCTOBER, 2015. SD/- SD/- ( RAJESH KUMAR ) (SHAILENDRA KUMAR YADAV) ACCOUNTANT MEMBER JUDICIAL MEMBE R MUMBAI: DATED 28/10/2015 S.K.SINHA / COPY OF ORDER FORWARDED TO:- / REVENUE !# / ASSESSEE $ %&%'( ) / CONCERNED CIT * )+ / CIT (A) ,-./00'(1 '( 1 2 %& / DR, ITAT, MUMBAI 3/4567 / GUARD FILE. BY ORDER / #8 1 9: ;% 1 '( 12 %&<