ACIT, New Delhi V. Sh. Sunil Chopra, New Delhi

ITA 339/DEL/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 86840 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 04-03-2015
• Assessment Year: 2007-2008
• Appeal Filed On: 18-01-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: B R R KUMAR
• Assessee Lawyers: ASHWANI TANEJA
• Keywords: Principle of natural justice; Additional evidence
• Section: 143(3)

Judgement Text

ITA NO. 339/ DEL/ 2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH G , NEW DELHI BEFORE SHRI G.D. AGRAWAL, VICE PRESIDENT AND SHRI GEORGE GEORGE K., JUDICIAL MEMBER I.T.A. NO. 3 39 /DEL/2013 A.Y. : 200 7 - 0 8 ACIT, CIRCLE 33(1), NEW DELHI ROOM NO. 1505, 15 TH FLOOR, DR. SHYAMA PRASAD MUKHERJEE, CIVIC CENTRE, NEW DELHI VS. SH. SUNIL CHOPRA, D - 10, MAIN VIKAS MARG, LAXMI NAGAR, NEW DELHI 110 092 (PAN: ABAPC4200F) (APPELLANT) (RESPONDENT) DEPARTMENT BY : SH. B.R.R. KUMAR, SR. DR ASSESSEE BY : SH. ASHWANI TANEJA, ADVOCATE DATE OF HEARING : 04 - 03 - 201 5 DATE OF ORDER : 0 5 - 03 - 201 5 ORDER PER GEORGE GEORGE K : J M TH IS APPEAL AT THE INSTANCE OF THE DEPARTMENT IS DIRECTED AGAINST THE ORDER OF THE LD. CIT(A) DATED 26.10.2012 . THE RELEVANT ASSESSMENT YEAR IS 2007 - 08. 2. THE EFFECTIVE GROUNDS RAISED BY THE DEPARTMENT READS AS FOLLOWS: - ITA NO. 339/ DEL/ 2013 2 1. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN RESTRICTING TO RS. 6,30,000/ - OU T OF TOTAL ADDITION OF RS. 21,00,000/ - MADE BY THE ASSESSING OFFICER ON ACCOUNT OF NOTIONAL RENT FROM FARM HOUSE. 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE CIT(A) HAS ERRED IN LAW IN ADMITTING ADDITIONAL EVIDENCE IN VIOLATION OF RULE 46A OF THE I.T. RULE, 1961. 3. THE ORDER OF THE CIT(A) IS ERRONEOUS AND IS NOT TENABLE ON FACTS AND IN LAW. 4. THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR AMEND ANY / ALL OF THE GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF THE HEARING OF THE APPEAL. 3 . THE ASSESSEE IS AN INDIVIDUAL, FILED HIS RETURN OF INCOME ON 31.10.2007 DECLARING TOTAL INCOME OF RS. 33,08,170/ - . THE ASSESSMENT U/S. 143(3) OF THE I.T. ACT WAS COMPLETED ON 31.12.2009 FIXING THE TOTAL INCOME AT RS. 55,77,570/ - . THE AO HAD MADE THE ADDITION OF RS. 21,00,000/ - , C ONSIDERING THE SAME FROM INCOME FROM HOUSE PROPERTY I.E. FARM HOUSE SITUATED AT JONAPUR VILLAGE, MEHRAULI, NEW DELHI. 4. THE BRIEF FACTS IN RESPECT TO THE ADDITION ARE AS FOLLOWS: - THE ASSESSING OFFICER IN THE COURSE OF AS SESSMENT PROCEEDINGS NOTICED THAT ASSESSEE WAS THE OWNER OF A FARM HOUSE IN MEHRAULI, NEW DELHI AND HAD NOT SHOWN ANY INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY I.E. FROM FARM HOUSE. ACCORDINGLY, AO ISSUED ITA NO. 339/ DEL/ 2013 3 SHOW CAUSE NOTICE TO THE ASSESSEE AS T O WHY NOTIONAL INCOME FROM FARM HOUSE SHOULD NOT BE TAKEN @ RS. 3.5 LAKHS PER MONTH , O N THE BASIS OF THE ENQUIRIES GOT CONDUCTED BY HIM THROUGH THE INSPECTOR OF THE WARD . T HE ASSESSEE FILED OBJECTIONS STATING THEREIN THAT THE FARM HOUSE IS AN AGRICULTURA L PROPERTY AND THE SAME IS NOT REGISTERED IN HIS NAME. AS REGARDS VALUE OF RS. 3.5 LAKHS IS CONCERNED, IT WAS SUBMITTED THAT THE PREVAILING RENT IN THE AREA IS NOT MORE THAN RS. 50,000/ - PER MONTH AND HE HAD ENCLOSED FEW QUOTATIONS FROM THE REAL ESTATE BROKERS OPERATING IN THE AFORESAID AREA. THE AO, HOWEVER, REJECTED THE OBJECTIONS RAISED BY THE ASSESSEE AND FIXED THE RATES @ RS.2.5 LAKHS PER MONTH AND ACCORDINGLY ADDED A SUM OF RS. 21 LAKHS AS INCOME FROM HOUSE PROPERTY I.E. FROM FARM HOUSE. 5. TH E ASSESSEE BEING AGGRIEVED WITH THE ORDER OF THE ASSESSING OFFICER, PREFERRED AN APPEAL BEFORE THE LD. CIT(A). THE LD. CIT(A) REJECTED THE ASSESSEE S CONTENTION STATING THAT IT IS NOT LIABLE TO BE ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY ON THE AFORESAID FARM HOUSE, SINCE IT IS AN AGRICULTURAL PROPERTY. LD. CIT(A) ALSO REJECTED THE ASSESSEE S CONTENTION THAT THE ABOVE - SAID PROPERTY IS NOT REGISTERED IN THE NAME OF THE ASSESSEE. LD. CIT(A), HOWEVER, ACCEPTED THE ADDITIONAL EVIDENCES WITH REFERE NCE TO THE VALUATION OF THE PROPERTY BEING ANNUAL LETTING VALUE (ALV) FIXED BY THE MUNICIPAL CORPORATION AS ON 1.12.2005. THE LD. CIT(A) IN THE COURSE OF APPELLATE PROCEEDINGS HAD CALLED FOR THE REMAND REPORT FROM THE ITA NO. 339/ DEL/ 2013 4 ASSESSING OFFICER AND ON RECEIPT OF T HE SAME , ACCEPTED THE NOTIONAL RENT @ RS. 75,000/ - PER MONTH, BEING THE ALV FIXED BY THE MUNICIPAL CORPORATION. 6. THE REVENUE BEING AGGRIEVED IS IN APPEAL BEFORE US. 7. LD. DEPARTMENTAL REPRESENTATIVE RELIED ON THE ASSESSMENT ORDER. 8. LD. COUNSEL OF THE ASSESSEE ON THE OTHER HAND REITERATED THE SUBMISSIONS MADE BEFORE THE INCOME TAX AUTHORITIES AND RELIED UPON THE ORDER OF THE IMPUGNED FINDING OF THE LD. CIT(A). 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. WE FIND THAT T HE ASSESSING OFFICER WHILE FIXING THE NOTIONAL RENT VALUE AT RS. 2.5 LAKHS PER MONTH FROM THE FARM HOUSE HAS NOT GIVEN THE BASIS FOR ARRIVING AT TH E FIGURE. THOUGH, HE STATED THAT IT IS ON THE BASIS OF THE ENQUIRY GOT CONDUCTED BY THE INSPECTOR OF THE WARD. THE REPORT OF THE INSPECTOR WAS NOT PUT TO THE ASSESSEE FOR HIS REBUTTAL. THE VALUE OF RS. 75,000/ - PER MONTH AS FIXED BY THE LD. CIT(A) IS BASED ON THE ALV FIXED BY THE MUNICIPAL CORPORATION AS ON 1.12.2005 , WHICH IS VERY MUCH R EASONABLE AND JUSTIFIED. THEREFORE, WE ARE OF THE VIEW THAT THE LD. CIT(A) W AS JUSTIFIED IN ESTIMATING THE NOTIONAL RENT OF RS. 75,000/ - PER MONTH OF THE AFORESAID FARM HOUSE, WHICH IS BASED ON THE ALV FIXED BY THE ITA NO. 339/ DEL/ 2013 5 MUNICIPAL CORPORATION. HENCE, THE G RO UND NO. 1 RAISED BY THE REVENUE IS REJECTED. 10. WITH REFERENCE TO GROUND NO. 2 IS CONCERNED, THE LD. CIT(A) HAS ADMITTED THE ADDITIONAL EVIDENCES GIVING THE FOLLOWING REASONS: - I HAVE CONSIDERED THE AVERMENTS MADE BY THE AO BUT I DO NOT AGREE WITH THE ARGUMENT OF THE AO, AS IF ANY EVIDENCE COULD NOT BE FILED THOUGH IT WAS GATHERED BY THE ASSESSEE ONLY WHEN THE ADDITION WAS MADE BY THE AO, AND IS RELEVANT TO DECIDE ANY GROUND OF APPEAL, AND MORE PARTICULARLY THAT SPECIFIC EVIDENCE WAS NOT ASKED BY THE A O DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE EVIDENCE GATHERED EVEN AFTER THE DATE OF ASSESSMENT SHOULD HAVE BEEN ADMITTED IN THE INTEREST OF NATURAL JUSTICE TO BE AWARDED. IN VIEW OF THESE REASONS, THE ADDITIONAL EVIDENCES FILED BY THE APPELLANT A RE ADMITTED. 10.1 IN THIS CASE THE ADDITIONAL EVIDENCE S HA VE BEEN ADMITTED BY THE LD. CIT(A) IN THE INTEREST OF NATURAL JUSTICE AND EQUITY. THE ADDITIONAL EVIDENCES ADMITTED ON RECORD IS NOTHING, BUT THE ALV FIXED BY THE MUNICIPAL CORPORATION, WHICH IS AN ACCURATE VALUATION FIXED BY THE JOINT ASSESSOR AND COLLECTOR OF MCD, DELHI. AFTER ADMITTING THE ADDITIONAL EVIDENCES, THE LD. CIT(A) HAD CALLED FOR THE REMAND REPORT FROM THE AO. THE AO IN HIS REMAND REPORT HAS NOT PER SE FAULTED THE ALV FIXED BY THE MUNICIPAL CORPORATION, THEREFORE, ITA NO. 339/ DEL/ 2013 6 WE SEE NO REASON TO INTERFERE WITH THE ORDER OF THE LD. CIT(A) IN ADMITTING THE ADDITIONAL EVIDENCE S . HENCE, THE GROUND NO. 2 RAISED BY THE REVENUE IS REJECTED. 1 1 . IN THE RESULT, THE APPEAL FILED BY THE REVENUE ST ANDS DISMISSED . ORDER PRONOUNCED IN THE O PEN C OURT ON 0 5 / 3 /20 1 5 . S D / - S D / - [ G.D. AGRAWAL ] [ GEORGE GEORGE K. ] VICE PRESIDENT JUDICIAL MEMBER DATE 0 5 / 3 /201 5 SRBHATNAGAR COPY FORWARDED TO: - 1. APPELLANT - 2. RESPONDENT - 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES ITA NO. 339/ DEL/ 2013 7