Sh. Nrendra Kumar Keshwani, Agra V. A.C.I.T., Central Circle, Agra

ITA 343/AGR/2012

• Counselvise Citation: 34320314 RSA 2012
• Duration Of Justice: 5 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-12-2012
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: DB
• Next Hearing Date: 30-11-2012
• Assessment Year: 2003-2004
• Appeal Filed On: 20-07-2012
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Unexplained investment; Income from undisclosed sources; Search and seizure; Additional evidence
• Section: 153A; 234B; 132

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AGRA BENCH, AGRA BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A.L. GEHLOT, ACCOUNTANT MEMBER ITA NOS.351, 370 & 353/AGR/2012 ASSESSMENT YEARS: 2004-05, 2005-06 & 2007-08 RESPEC TIVELY SHRI LAXMAN DASS KESHWANI, VS. ASSTT. COMMISSION ER OF INCOME TAX, 92, SURYA NAGAR, AGRA. CENTRAL CIRCLE, AGRA. (PAN: ACWPK 4019 R). ITA NOS.103, 104, 336, 105, 106, 107 & 108/AGR/2012 ASSESSMENT YEARS: 2002-03 TO 2008-09 RESPECTIVELY SHRI JITENDRA KUMAR KESHWANI, VS. ASSTT. COMMISS IONER OF INCOME TAX, 92, SURYA NAGAR, AGRA. CENTRAL CIRCLE, AGRA. (PAN: AHEPK 8953 B). ITA NOS.338, 109, 110 & 112/AGR/2012 ASSESSMENT YEARS: 2004-05, 2005-06, 2006-07 & 2008- 09 RESPECTIVELY SHRI KAMAL KUMAR KESHWANI, VS. ASSTT. COMMISSION ER OF INCOME TAX, 92, SURYA NAGAR, AGRA. CENTRAL CIRCLE, AGRA. (PAN: ABRPK 3458 N). ITA NOS.99, 100, 101, 102 & 372/AGR/2012 ASSESSMENT YEARS: 2003-04, 2005-06, 2006-07, 2007-0 8 & 2008-09 RESPECTIVELY SHRI SHYAM SUNDER KESHWANI, VS. ASSTT. COMMISSIO NER OF INCOME TAX, 92, SURYA NAGAR, AGRA. CENTRAL CIRCLE, AGRA. (PAN: ABXPK 6646 A) ITA NOS.373 TO 377/AGR/2012 ASSESSMENT YEARS: 2003-04, 2004-05, 2005-06, 2007-0 8 & 2008-09 RESPECTIVELY SHRI JAGDISH KUMAR KESHWANI, VS. ASSTT. COMMISSI ONER OF INCOME TAX, 92, SURYA NAGAR, AGRA. CENTRAL CIRCLE, AGRA. (PAN: ABXPK 6627 P). ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 2 ITA NOS.354 TO 358/AGR/2012 ASSESSMENT YEARS: 2004-05 TO 2008-09 RESPECTIVELY SHRI MAHENDRA KUMAR KESHWANI, VS. ASSTT. COMMISSIO NER OF INCOME TAX, 92, SURYA NAGAR, AGRA. CENTRAL CIRCLE, AGRA. (PAN: AGBPK 6986 G). ITA NOS.343 TO 348/AGR/2012 ASSESSMENT YEARS: 2003-04 TO 2008-09 RESPECTIVELY SHRI NARENDRA KUMAR KESHWANI, VS. ASSTT. COMMISSI ONER OF INCOME TAX, 92, SURYA NAGAR, AGRA. CENTRAL CIRCLE, AGRA. (PAN: ABVPK 6826 C). (APPELLANTS) (RESPONDENT) APPELLANTS BY : SHRI PANKAJ GARGH, ADVOCAT E RESPONDENT BY : SHRI WASEEM ARSHAD, SR. D. R. DATE OF HEARING : 30.11.2012 DATE OF PRONOUNCEMENT OF ORDER : 28.12.2012 ORDER PER BENCH: THESE ARE APPEALS FILED BY SEVEN DIFFERENT ASSESSEE S AGAINST DIFFERENT ORDERS PASSED BY THE LD. CIT(A), AGRA. 2. GROUNDS RAISED IN ALL THESE APPEALS ARE BASED ON IDENTICAL SET OF FACTS, THEREFORE, FOR THE SAKE OF CONVENIENCE, ALL THESE A PPEALS ARE DECIDED BY THIS COMMON ORDER. ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 3 3. THE LD. REPRESENTATIVES OF THE PARTIES SUBMITTED THAT THE FACTS OF THESE APPEALS LEAD IN CASE OF LAXMAN DASS KESHWANI, ITA N O.351/AGR/2012 AND ACCORDINGLY ARGUED BY BOTH THE SIDES ON THE BASIS O F FACTS NOTED IN THAT CASE. FOR KNOWING THE EXACT GROUNDS OF APPEAL, WE REPRODUCE T HE GROUNDS OF APPEAL IN ITA NO.351/AGR/2012 S UNDER :- 1.(I) BECAUSE THE PROCEEDINGS INITIATED U/S 153A O F THE ACT IS WRONG AND ILLEGAL AS NO PAPER, DOCUMENT OR ANY ADVERSE MA TERIAL RELATING TO THE RELEVANT YEAR WARRANTING ADDITION M ADE BY THE ASSESSING OFFICER WAS FOUND DURING SEARCH. THE LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN C ONFIRMING THE ACTION OF THE ASSESSING OFFICER AS REGARDS INIT IATION OF PROCEEDINGS U/S 153A OF THE ACT CONSIDERING THE FAC TS OF THE CASE AND THE LEGAL POSITION THE ASSESSMENT IS LIABL E TO BE ANNULLED. LD. COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN REJECTING THE APPELLANTS GROUND. (II) BECAUSE SINCE NO INCRIMINATING MATERIAL WAS FO UND DURING THE COURSE OF SEARCH FOR WARRANTING ADDITIONS MADE BY T HE ASSESSING OFFICER, THE ADDITIONS MADE IN THE RELEVA NT PREVIOUS YEAR ARE WRONG, ILLEGAL AND DESERVES TO BE DELETED. 2.(I) BECAUSE THE LD. CIT(A) HAS WRONGLY, ILLEGALLY AND ARBITRARILY CONFIRMED THE ADDITION OF RS.52,174/- MADE BY THE A SSESSING OFFICER U/S 23(4) OF THE ACT. (II) BECAUSE CONSIDERING THE FACTS OF THE CASE THAT THE PROPERTY COULD NOT BE LET OUT AND NO RENT WAS RECEIVED OR RE CEIVABLE, THE NOTIONAL RENT CANNOT BE ASSESSED, THE LD. COMMISSIO NER OF INCOME TAX (APPEALS) HAS ERRED IN CONFIRMING THE AD DITION INSTEAD OF DELETING THE SAME. ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 4 3. BECAUSE THE LD. COMMISSIONER OF INCOME TAX (APPE ALS) HAS WRONGLY, ILLEGALLY AND ARBITRARILY CONFIRMED THE AD DITION OF RS.2000/- OUT OF ADDITION OF RS.44,857/- MADE BY TH E ASSESSING OFFICER FOR SO CALLED LOW HOUSE HOLD WITHDRAWALS. 4. BECAUSE THE LD. CIT(A) HAS ERRED IN LAW IN CONFI RMING THE ASSESSING OFFICERS ACTION AS REGARDS CHARGING OF I NTEREST U/S 234A, 234B AND 234C OF THE ACT. 5. THAT THE APPELLANT CRAVES LEAVE TO ADD, AMEND, A LTER, MODIFY OR DELETE ANY OR ALL OF THE GROUNDS OF APPEAL BEFORE O R AT THE TIME OF HEARING. 4. AT THE TIME OF HEARING THE LD REPRESENTATIVES OF THE PARTIES SUBMITTED THAT GROUND NOS.1(I) AND 4 & 5 ARE NOT PRESSED. HE FURT HER SUBMITTED THAT THE EFFECTIVE COMMON GROUNDS ARE ONLY TWO GROUNDS NAMELY CALCULAT ION OF NOTIONAL RENT AND ADDITION ON ACCOUNT OF HOUSEHOLD EXPENSES. GROUND NO.1(II) IS SUPPORTING GROUND TO BOTH THE MAIN GROUNDS OF APPEAL. 5. THE BRIEF FACTS OF THE CASE ARE THAT A SEARCH UN DER SECTION 132 WAS CARRIED OUT ON 30.01.2008. DURING THE ASSESSMENT PROCEEDINGS T HE A.O. NOTICED THAT THE ASSESSEE WAS HAVING SEVERAL HOUSE PROPERTIES, DETAI LS OF PROPERTY NOTED BY THE A.O. IN HIS ORDER IS AS UNDER :- (PAGE NOS.2 & 3) SL.NO. PARTICULARS OF VALUE OF REMARK NOTIONAL NET ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 5 PROPERTIES PROPERTY ALV INCOME AFTER DEDUCTION U/S 24(A) 1 RESIDENTIAL PROPERTY 92, SURYA NAGAR, AGRA. RS.13,40,853/- SELF OCCUPIED - - 2 RESIDENTIAL PROPERTY 96, SURYA NAGAR, AGRA. RS.3,20,175/- 22412 15689 3 RESIDENTIAL PROPERTY 97, SURYA NAGAR, AGRA. RS.7,00,000/- 49000 34300 4 PROPERTY 12/5,GHER KALE KHAN, AGRA. RS.2,59,785/- RENTED - - 5 FLAT MARUTI TOWER SANJAY PLACE, AGRA. RS.4,65,000/- RENTED - - 6 SHOP AT DARESI NO-1, AGRA RS.44,600/- 3122 2185 6. THE A.O. AFTER CONSIDERING THE ASSESSEES SUBMIS SION CALCULATED THE ANNUAL LETTING VALUE OF THE PROPERTIES FOR SL.NO.2 RS.15,6 89/-, SL. NO.3 RS.34,300/- AND SL. NO.6 RS.2,185/- AFTER ALLOWING DEDUCTION UNDER SECT ION 24(A) OF THE ACT AND MADE ADDITION OF RS.52,174/- IN THE YEAR UNDER CONSIDERA TION AS UNDER :- (PAGE NOS.3 & 4) ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 6 THE SUBMISSION OF THE ASSESSEE HAS BEEN CONSIDERED , BUT IN VIEW OF SPECIFIC PROVISIONS OF SECTION 23(4) THE SA ME ARE NOT CORRECT, AND PROVISIONS OF SECTION 23(4) ARE CLEARLY APPLICA BLE IN CASE OF ASSESSEE IN RESPECT OF PROPERTIES FROM WHICH NO INC OME ARE SHOWN. THE ALV OF OTHER PROPERTIES THAN SOP ARE LIABLE TO BE ASSESSED U/S 23(4)(B) OF THE I.T. ACT, 1961. CONSIDERING THESE FACTS AND THE JUDGEMENT OF THE HONBLE ALLAHABAD HIGH COURT IN TH E CASE OF RADHADEVI VS. CIT, 125 ITR 134, THE NOTIONAL ANNUAL LETTING VALUE IN RESPECT OF MORE THAN ONE SELF OCCUPIED PROPERTIES, IS TO BE ASSESSED U/S 23(4) OF THE I.T. ACT AND THIS PROVISIONS ARE C LEARLY APPLICABLE IN THE CASE OF THE ASSESSEE IN RESPECT OF PROPERTIES M ENTIONED ABOVE. IN THE ABOVE CASE, THE HONBLE ALLAHABAD HIGH COURT HA S HELD THAT FOR DETERMINING ANNUAL LETTING VALUE, 7% OF INVESTMENT IS JUST AND FAIR. CONSIDERING THIS DECISION OF ALLAHABAD HIGH COURT A ND THE DETAILS OF INVESTMENT, THE NOTIONAL ANNUAL LETTING VALUE AND I NCOME FROM HOUSE PROPERTY OF THE ABOVE PROPERTIES ARE WORKS OUT AS G IVEN IN COLUMN NO.5 & 6 ABOVE RESPECTIVELY. IN THIS MANNER, THE INCOME OF RS.52,174/- IS ADDED TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM H OUSE PROPERTY U/S 23(4) OF THE I.T. ACT. 7. THE A.O. HAS ALSO MADE ADDITION ON ACCOUNT OF HO USE HOLD EXPENSES RS.44,857/- FOR A.Y. 2004-05 AS UNDER :- (PAGE NO.9 ) NO BOOKS OF ACCOUNT OR OTHER DETAILS TO JUSTIFY TH E HOUSE HOLD EXPENSES HAVE BEEN PRODUCED. CONSIDERING THESE FAC TS AND CIRCUMSTANCES OF THE CASE, IT IS CRYSTAL CLEAR THAT WITHDRAWALS ARE NOT BEING SHOWN TRULY AND HONESTLY AND THEY ARE GROSSLY UNDERSTATED. THEREFORE, EXPENSES FOR HOUSE HOLD NEEDS TO BE ESTI MATED CONSIDERING THE SIZE OF THE FAMILY, STATUS AND STANDARD OF LIVI NG OF THE ASSESSEE AND OTHER RELEVANT CONSIDERATIONS REGARDING HOUSE HOLD EXPENSES. ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 7 IN THIS CONNECTION, IT MAY BE POINTED OUT THAT A S EARCH WAS CONDUCTED ON 30.01.2008 AT THE PREMISES OF ASSESSEE IN WHICH UNEXPLAINED CASH OF RS.58,00,000/- , JEWELLERY OF R S.1.50 CRORE AND OTHER VALUABLE ELECTRONICS GADGETS WERE FOUND FROM RESIDENCE OF ASSESSEE AND HIS FAMILY MEMBERS. CONSIDERING THESE FACTS, SIZE OF FAMILY AND STANDA RD & STATUS OF LIVING OF THE ASSESSEE, HOUSE HOLD EXPENSES OF ASSE SSEES FAMILY ARE ESTIMATED AT RS.75,000/- P.M. I.E. RS.9,00,000/- FO R THE ENTIRE YEAR. AFTER GIVING CREDIT OF WITHDRAWALS MADE BY THE ASSE SSEE & HIS FAMILY MEMBERS AMOUNTING TO RS.5,86,000/- THE DIFFERENCE C OMES TO RS.3,14,000/- WHICH IS TO BE ADDED TO THE INCOME OF THE ASSESSEE & HIS SONS ON ACCOUNT OF LOW WITHDRAWALS FOR HOUSE HOLD E XPENSES MET OUT OF INCOME FROM UNDISCLOSED SOURCES. HOWEVER, TAKING A REASONABLE VIEW, IT IS PRESUMED THAT AT LEAST EVERY MALE MEMBER OF FAMILY WAS CONTRIBUTING TOWARD S HOUSE HOLD EXPENSES, ADDITION ON ACCOUNT OF LOW WITHDRAWALS IS SPREAD OVER AND 1/7 TH OF THE SAME IS ADDED IN EACH MALE MEMBER OF KESHWA NI FAMILY I.E. SHRI LAXMAN DAS KESHWANI, KAMAL KUMAR KESHWANI , JAGDISH KESHWANI, NARENDRA KESHWANI, MAHENDRA KESHWANI, JIT ENDRA KESHWANI AND SHYAM SUNDER KESHWANI. THUS THE ADDIT ION ON ACCOUNT OF LOW WITHDRAWALS IN CASE OF ASSESSEE COME S TO RS.44,857/- THUS THE ADDITION ON ACCOUNT OF LOW WITHDRAWALS FO R HOUSE HOLD EXPENSES WORKS OUT TO RS.44,857/- 8. THE CIT(A) CONFIRMED THE ORDER OF THE A.O. AS UN DER :- (PARAGRAPH NO.6.8, PAGE NOS.22&23) 6.8 CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE OF THE APPELLANT AND THE LEGAL POSITION IN RESPECT OF DETE RMINATION OF ANNUAL LETTING VALUE SO FAR DISCUSSED IN THIS PARA ABOVE, I HOLD THAT THE ANNUAL LETTING VALUE OF THE PROPERTIES OF THE APPELLANT WO ULD BE DETERMINED AS PER CLAUSE (A) OF SECTION 23(1) BEING A SUM FOR WHI CH THE PROPERTY ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 8 MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YE AR FOR THE PURPOSE OF DETERMINING THE ANNUAL VALUE OF THESE PROPERTIES UNDER THE PROVISIONS OF SECTION 23(4) (B) AND SINCE, THERE IS NO EVIDENCE FOR CALCULATION OF ANNUAL LETTING VALUE OF THE PROPERTY , IN MY CONSIDERED OPINION, THE AO HAS CORRECTLY COMPUTED THE ANNUAL L ETTING VALUE AT THE RATE OF 7% OF INVESTMENT AS PER THE DECISION OF HON BLE JURISDICTIONAL ALLAHABAD HIGH COURT IN THE CASE OF SMT. RADHA DEVI DALMIA VS. CIT (SUPRA) AND HENCE, ADDITION OF RS.52,174/- WAS CORR ECTLY MADE BY HIM ON ACCOUNT OF THESE HOUSE PROPERTIES. THEREFORE, B OTH GROUNDS TAKEN BY THE APPELLANT IN RESPECT OF THIS ADDITION I.E. G ROUND NO.3 & 4 ARE DISMISSED. 9. IN RESPECT OF HOUSEHOLD EXPENSES, THE CIT(A) PAR TLY ALLOWED THE ASSESSEES APPEAL AS UNDER :- (PARAGRAPH NO.7.3, PAGE NOS.24 & 25) 7.3 I HAVE CONSIDERED THE ABOVE ARGUMENTS OF THE L D. AR TAKEN AGAINST THE ESTIMATED ADDITION MADE BY THE AO ON AC COUNT OF ALLEGED LOW WITHDRAWAL FOR HOUSE HOLD EXPENSES AND ALSO CON SIDERED THE DISCUSSION MADE BY THE AO IN THE ASSESSMENT ORDER. I FIND THAT AS PER THE DETAILS AND VARIOUS DOCUMENTARY EVIDENCE COLLEC TED DURING THE COURSE OF SEARCH AND SEIZURE OPERATION, LOOKING TO THE DETAILED DISCUSSION IN THE ASSESSMENT ORDER ABOUT THE EXPEND ITURE BEING INCURRED BY THE FAMILY MEMBERS OF THE APPELLANT, TH E TOTAL WITHDRAWALS OF RS.5,86,000/- DECLARED BY ALL THE FAMILY MEMBERS OF THE APPELLANT FOR HOUSE HOLD EXPENDITURE APPEARS TO BE AT LOWER S IDE. IN VIEW OF THE DETAILS OF EXPENDITURE COLLECTED DURING THE SEARCH AND OTHER DETAILS OF EXPENDITURE RELATING TO HOUSE HOLD EXPENSES DISCUSS ED BY THE AO IN THE ASSESSMENT ORDER, I FIND THAT EVEN AFTER CONSID ERING ALL THE THREE JUDICIAL DECISIONS AS CITED BY THE LD. AR, THE AO I S JUSTIFIED IN ENHANCING THE HOUSE HOLD EXPENSES OF THE APPELLANT. HOWEVER, ON THE BASIS OF DETAILS DISCUSSED IN THE ASSESSMENT ORDER, REASONABLENESS OF SUCH ESTIMATE IS ALSO REQUIRED TO BE CONSIDERED. I N MY OPINION ESTIMATION MADE BY AO IS ALSO AT HIGHER SIDE. IN M Y CONSIDERED OPINION AFTER TAKING INTO ACCOUNT ALL THE DETAILS D ISCUSSED IN THE ASSESSMENT ORDER, THE ESTIMATED EXPENDITURE OF RS.5 0,000/- P.M. WOULD ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 9 BE QUITE REASONABLE FOR MEETING OUT ALL THE NEEDS O F 7 MEMBERS OF A FAMILY AND FOR PURCHASING OF VARIOUS HOUSE HOLD ITE MS AS DISCUSSED IN THE ASSESSMENT ORDER AND ALSO MEETING OUT THE EXPEN DITURE ON SCHOOL GOING CHILDREN AND FOR THE PAYMENT OF ELECTRICITY B ILL AND OTHER EXPENSES. THEREFORE, THE AO IS DIRECTED TO ESTIMAT E THE HOUSE HOLD EXPENDITURE OF ENTIRE FAMILY OF THE APPELLANT AT RS .50,000/- P.M. AND ACCORDINGLY, THE TOTAL ANNUAL EXPENDITURE ON HOUSE HOLD WOULD COME TO RS.6,00,000/- WHICH IS IN EXCESS OF RS.14,000/- FROM THE AMOUNT DECLARED BY THE ENTIRE FAMILY MEMBERS OF THE APPELL ANT. THIS EXCESS AMOUNT OF RS.14,000/- WOULD BE DIVIDED BY 7 FOR MAK ING NECESSARY ADDITION IN THE INCOME OF APPELLANT ON ACCOUNT OF L OW HOUSE HOLD WITHDRAWAL. AFTER DIVIDING RS.14,000/- AMONG SEVEN MALE MEMBERS, THE AMOUNT COMES TO RS.2,000/- AND THEREFORE, THE A DDITION ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWAL IS RESTRICTED TO RS.2, 000/- AND HENCE, THE APPELLANT GETS A RELIEF OF RS.42,857/-. ACCORD INGLY, GROUND NO.5 IS PARTLY ALLOWED. 10. A SUMMARY CHART OF DISPUTED AMOUNTS IN THESE AP PEALS BEFORE US ARE AS UNDER :- ITA NO. INCOME FROM HOUSE PROPERTY ON ACCOUNT OF LOW WITHDRAWAL OTHER ADDITIONS 351/AGR/2012 2004-05 52,174/- 44,857/- 370/AGR/2012 2005-06 52,174./- 42,285/- 353/AGR/2012 2007-08 52,174/- 55,571/- 103/AGR/2012 2002-03 86,398/- 1,500/- 22,500/- 104/AGR/2012 2003-04 86,398/- 32,643/- 336/AGR/2012 2004-05 86,398/- 44,857/- 105/AGR/2012 2005-06 86,398/- 42,285/- 22,500/- 106/AGR/2012 2006-07 86,398/- 66,142/- 107/AGR/2012 2007-08 86,398/- 55,571/- 108/AGR/2012 2008-09 86,398/- 44,142/- ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 10 338/AGR/2012 2004-05 67,629/- 44,857/- 109/AGR/2012 2005-06 67,629/- 42,285/- 110/AGR/2012 2006-07 67,629/- 66,142/- 112/AGR/2012 2008-09 67,629/- 44,142/- 99/AGR/2012 2003-04 60,809/- 32,643/- 100/AGR/2012 2005-06 44,590/- 42,285/- 101/AGR/2012 2006-07 44,590/- 66,142/- 102/AGR/2012 2007-08 44,590/- 55,571/- 372/AGR/2012 2008-09 44,590/- 44,142/- 373/AGR/2012 2003-04 1,06,035/- 32,643./- 374/AGR/2012 2004-05 1,06,035/- 44,857/- 375/AGR/2012 2005-06 1,42,239/- 42,285/- 376/AGR/2012 2007-08 1,42,239/- 55,571/- 377/AGR/2012 2008-09 1,58,409/- 44,142/- 354/AGR/2012 2004-05 88,260/- 44,857/- 355/AGR/2012 2005-06 88,260/- 42,285/- 20,000/- 356/AGR/2012 2006-07 88,260/- 66,142/- 357/AGR/2012 2007-08 88,260/- 55,571/- 358/AGR/2012 2008-09 88,260/- 44,142/- 343/AGR/2012 2003-04 56,352/- 32,643/- 344/AGR/2012 2004-05 56,352/- 44,857/- 345/AGR/2012 2005-06 56,352/- 42,285/- 346/AGR/2012 2006-07 56,352/- 66,142/- 347/AGR/2012 2007-08 56,352/- 55,571/- 22,840/- 348/AGR/2012 2008-09 56,352/- 44,142/- 11. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND PERUSED RECORDS. THE ASSESSEE FILED ADDITIONAL EVIDENCES IN SUPPORT OF THE CONTENTIONS REGARDING ANNUAL VALUE OF THE PROPERTIES. IN THE CASE UNDER CONSIDERATION, NEITHER THE A.O. HAS EXAMINED THE CASE IN THE LIGHT OF PROVISIONS OF SECTION 23 NOR ANY MATERIAL COLLECTED AND PUT ON RECORD. SIMILARLY, THE ASSESS EE ALSO DID NOT PRODUCE ANY ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 11 EVIDENCE BEFORE REVENUE AUTHORITIES. THESE ADDITIO NAL EVIDENCES ARE ONLY RELEVANT EVIDENCE AND MATERIAL. THEREFORE, AFTER HEARING TH E LD. REPRESENTATIVES OF THE PARTIES, THE ADDITIONAL EVIDENCES FILED BY THE ASSE SSEE IN THE FORM OF DOCUMENTS RELATING TO MUNICIPAL VALUATION ARE ADMITTED IN THE INTEREST OF JUSTICE. 12. THE FIRST EFFECTIVE ISSUE IS IN RESPECT OF DETE RMINATION OF ANNUAL VALUE OF PROPERTIES. THE CASE OF THE A.O. IS THAT SECTION 2 3(4) OF THE ACT IS APPLICABLE IN THE CASE OF THE ASSESSEE. THE CIT(A) CONFIRMED THE VIE W OF THE A.O. ON THIS ISSUE. THE CASE OF THE ASSESSEE IS THAT ACCORDING TO SECTI ON 23(1)(C) OF THE ACT, ANNUL VALUE OF THOSE PROPERTIES ARE NIL. THE ASSESSEE RE LIED UPON THE DECISION OF I.T.A.T., MUMBAI BENCH IN THE CASE OF PREMSUDHA EXPORTS P. LT D. VS. ASSISTANT COMMISSIONER OF INCOME TAX, 295 ITR (AT) 341 (MUMBA I). THE SCHEME OF THE ACT TO LEVY TAX ON INCOME FROM HOUSE PROPERTY IS ON THE BASIS OF ANNUAL VALUE. THE ANNUAL VALUE IS REQUIRED TO BE DETERMINED IN ACCORD ANCE WITH SECTION 23(1)(A), 23(1)(B) & 23(1)(C) OF THE ACT. THERE IS NO DISPUT E IN THE FACT THAT SECTION 23(1)(B) OF THE ACT IS NOT APPLICABLE TO THE FACTS OF THE CA SE UNDER CONSIDERATION. NOW THE QUESTION REMAINS TO BE EXAMINED, WHETHER SECTION 23 (1)(C) OF THE ACT IS APPLICABLE OR SECTION 23(1)(A) OF THE ACT. TO APPRECIATE THE ISSUE, WE WOULD LIKE TO REPRODUCE SECTION 23 WHICH READS AS UNDER:- ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 12 [ANNUAL VALUE HOW DETERMINED. 23. (1) FOR THE PURPOSES OF SECTION 22 , THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABL Y BE EXPECTED TO LET FROM YEAR TO YEAR; OR (B) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS IN EXCESS OF THE SUM REFERRED TO IN CLAUSE (A), THE AM OUNT SO RECEIVED OR RECEIVABLE; OR (C) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR A ND OWING TO SUCH VACANCY THE ACTUAL RENT RECEIVED OR RECEIVABLE BY T HE OWNER IN RESPECT THEREOF IS LESS THAN THE SUM REFERRED TO IN CLAUSE (A), THE AMOUNT SO RECEIVED OR RECEIVABLE : PROVIDED THAT THE TAXES LEVIED BY ANY LOCAL AUTHORITY IN RE SPECT OF THE PROPERTY SHALL BE DEDUCTED (IRRESPECTIVE OF THE PRE VIOUS YEAR IN WHICH THE LIABILITY TO PAY SUCH TAXES WAS INCURRED BY THE OWN ER ACCORDING TO THE METHOD OF ACCOUNTING REGULARLY EMPLOYED BY HIM) IN DETERMINING THE ANNUAL VALUE OF THE PROPERTY OF THAT PREVIOUS YEAR IN WHICH SUCH TAXES ARE ACTUALLY PAID BY HIM. EXPLANATION.FOR THE PURPOSES OF CLAUSE (B) OR CLAU SE (C) OF THIS SUB- SECTION, THE AMOUNT OF ACTUAL RENT RECEIVED OR RECE IVABLE BY THE OWNER SHALL NOT INCLUDE, SUBJECT TO SUCH RULES 55 AS MAY BE MADE IN THIS BEHALF, THE AMOUNT OF RENT WHICH THE OWNER CANNOT REALISE. (2) WHERE THE PROPERTY CONSISTS OF A HOUSE OR PART OF A HOUSE WHICH (A) IS IN THE OCCUPATION OF THE OWNER FOR THE PURP OSES OF HIS OWN RESIDENCE; OR ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 13 (B) CANNOT ACTUALLY BE OCCUPIED BY THE OWNER BY RE ASON OF THE FACT THAT OWING TO HIS EMPLOYMENT, BUSINESS OR PROFESSIO N CARRIED ON AT ANY OTHER PLACE, HE HAS TO RESIDE AT THAT OTH ER PLACE IN A BUILDING NOT BELONGING TO HIM, THE ANNUAL VALUE OF SUCH HOUSE OR PART OF THE HOUSE SHALL BE TAKEN TO BE NIL. (3) THE PROVISIONS OF SUB-SECTION (2) SHALL NOT APP LY IF (A) THE HOUSE OR PART OF THE HOUSE IS ACTUALLY LET DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR; OR (B) ANY OTHER BENEFIT THEREFROM IS DERIVED BY THE OWNER. (4) WHERE THE PROPERTY REFERRED TO IN SUB-SECTION ( 2) CONSISTS OF MORE THAN ONE HOUSE (A) THE PROVISIONS OF THAT SUB-SECTION SHALL APPLY ONLY IN RESPECT OF ONE OF SUCH HOUSES, WHICH THE ASSESSEE MAY, AT HIS OPTI ON, SPECIFY IN THIS BEHALF; (B) THE ANNUAL VALUE OF THE HOUSE OR HOUSES, OTHER THAN THE HOUSE IN RESPECT OF WHICH THE ASSESSEE HAS EXERCISED AN OPTI ON UNDER CLAUSE (A), SHALL BE DETERMINED UNDER SUB-SECTION (1) AS I F SUCH HOUSE OR HOUSES HAD BEEN LET.] 13. FIRST WE TAKE UP THE MATTER WHETHER SECTION 23( 1)(C) IS APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION OR NOT. THE MUMBAI BENCH IN THE CASE OF PREMSUDHA EXPORTS P. LTD. VS. ASSISTANT COMMISSIONE R OF INCOME TAX, 295 ITR (AT) 341 (MUMBAI) HAD OCCASION TO CONSIDER THE ISSU E. THE RELEVANT DISCUSSIONS AND FINDING OF I.T.A.T. MUMBAI BENCH ARE AS UNDER : - ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 14 11. DURING THE COURSE OF HEARING, THE REVENUE HAS RAI SED DISPUTE THAT THIS CLAUSE (C) CAN ONLY BE INVOKED IN THOSE CASES WHERE THE PROPERTY WAS LET OUT IN EARLIER YEARS OR IN THE PRESENT YEAR. WH EREAS, ACCORDING TO ASSESSEE, THE INTENTION OF LETTING OUT OF PROPERTY IS TO BE SEEN FOR INVOKING CLAUSE (C) FOR COMPUTING THE ANNUAL LETTING VALUE O F THE PROPERTY. IT IS IRRELEVANT WHETHER THE PROPERTY IS/WAS LET OUT. 12. NOW THE SOLE DISPUTE IS REGARDING THE INTERPRETAT ION OF THE WORDS PROPERTY IS LET IN THE ABOVE CLAUSE (C). ONE INTE RPRETATION SUGGESTED BY THE LEARNED DR IS THAT THE PROPERTY SHOULD BE ACTUA LLY LET OUT IN THE RELEVANT PREVIOUS YEAR. WE FIND THAT THIS INTERPRET ATION IS NOT CORRECT BECAUSE AS PER THIS CLAUSE, THE PROPERTY CAN BE VAC ANT DURING WHOLE OF THE RELEVANT PREVIOUS YEAR. HENCE, BOTH THESE SITUATION S CANNOT CO-EXIST THAT THE PROPERTY IS ACTUALLY LET OUT ALSO IN THE RELEVA NT PREVIOUS YEAR AND THE PROPERTY IN THE SAME YEAR IS VACANT ALSO DURING WHO LE OF THE SAME YEAR. WE, THEREFORE, REJECT THIS CONTENTION OF THE LEARNE D DR OF THE REVENUE. 13. THE SECOND INTERPRETATION SUGGESTED BY THE LEARNED DR IS THAT THE PROPERTY SHOULD BE ACTUALLY LET OUT DURING ANY TIME PRIOR TO THE RELEVANT PREVIOUS YEAR AND THAN ONLY, IT CAN BE SAID THAT TH E PROPERTY IS LET AND THIS CLAUSE WILL BE APPLICABLE. NOW, WE EXAMINE THIS CON TENTION. FIRST OF ALL, WE FIND THAT THE TENSE OF THE VERB USED PRIOR TO TH E WORD LET IS PRESENT TENSE AND NOT PAST TENSE. IT MEANS THAT THE PROVISI ONS OF ABOVE CLAUSE TALK REGARDING THE RELEVANT PREVIOUS YEAR AND NOT OF ANY EARLIER PERIOD AND IF THAT BE SO, THIS CONTENTION OF LEARNED DR IS ALSO N OT ACCEPTABLE. SECONDLY, WE FIND THAT EVEN IF THIS CONTENTION OF LEARNED DR OF THE REVENUE IS ACCEPTED, THE PROVISIONS OF THIS CLAUSE (C) CANNOT BE MADE APPLICABLE IN THE FIRST YEAR, WHEN THE PROPERTY IS ACQUIRED AND T HE SAME REMAINED VACANT BECAUSE IT COULD NOT BE LET OUT FOR WANT OF TENANT. THIS IS SO BECAUSE THERE IS NO EARLIER PERIOD IN THAT CASE PRI OR TO THE START OF THE RELEVANT PREVIOUS YEAR. THIS CANNOT BE THE UNSAID I NTENTION OF THE LEGISLATURES THAT THE PROVISIONS OF THIS CLAUSE ARE NOT BE APPLIED IN THE FIRST YEAR IF THE PROPERTY REMAINED VACANT FOR WHOL E OF THE FIRST YEAR IN SPITE OF EFFORTS TO LET IT OUT. MOREOVER, IF THIS I NTERPRETATION SUGGESTED BY THE LEARNED DR IS ACCEPTED, IT WILL LEAD TO DISASTR OUS RESULT BECAUSE IN THAT EVENT, IF A PROPERTY WAS LET OUT IN ONE YEAR FOR AN Y PERIOD, WHICH CAN BE ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 15 EVEN 1 MONTH, THAN AFTER THAT, SUCH PROPERTY WILL E NJOY THE BENEFIT OF THIS CLAUSE (C) FOR ANY NUMBER OF YEARS IF THE PROPERTY REMAINS VACANT EVEN IF THE SAME WAS NOT INTENDED TO BE LET OUT IN THE SUBS EQUENT YEARS INCLUDING THE RELEVANT PREVIOUS YEAR. 14. IN VIEW OF THE ABOVE DISCUSSION, THIS INTERPRETAT ION CAN LEAD TO A SITUATION, WHERE A PERSON HAVING SEVERAL PROPERTIES AND ALL BEING LET OUT FOR 1 MONTH IN ANY ONE YEAR AS DISCUSSED ABOVE AND THEREAFTER REMAINED VACANT WITH NO INTENTION TO LET OUT IN SUBSEQUENT Y EARS WILL ENJOY THE STATUS OF LET PROPERTY IN ALL SUCH SUBSEQUENT YEARS AND WILL BECOME ELIGIBLE FOR BENEFITS OF THIS CLAUSE IN ALL SUCH SU BSEQUENT YEARS WITHOUT ANY ACTUAL LET OUT IN THOSE YEARS AND EVEN WITHOUT ANY INTENTION TO LET OUT IN THOSE SUBSEQUENT YEARS. THIS CANNOT BE THE INTENTIO N OF LEGISLATURE. 15. WE HAVE SEEN THAT BOTH THE INTERPRETATIONS SUGGEST ED BY THE LEARNED DR OF THE REVENUE ARE NOT WORKABLE. NOW, WE HAVE TO SEE AS TO WHAT CAN BE THE CORRECT AND WORKABLE INTERPRETATION OF THE WORDS PROPERTY IS LET IN THE ABOVE CLAUSE (C). FOR THIS , WE HAVE TO SEE AND EXAMINE AS TO WHETHER ACTUAL LETTING OUT IS MUST FO R A PROPERTY TO FALL WITHIN THE PURVIEW OF THIS CLAUSE BY SATISFYING THE REQUIREMENT OF WORDS PROPERTY IS LET PRESENT IN THIS CLAUSE. IN THIS C ONNECTION, WE HAVE NOTED ABOVE THAT ACTUAL LET OUT EVEN FOR A DAY IN THE PRE SENT YEAR AND THE PROPERTY REMAINING VACANT FOR WHOLE OF THE PRESENT YEAR CANNOT CO-EXIST. THIS TAKES US TO THE ALTERNATIVE THAT WE SHOULD EXA MINE AS TO WHETHER THE PROPERTY WAS ACTUALLY LET OUT FOR SOME PERIOD IN PA ST I.E., PRIOR TO START OF THE RELEVANT PREVIOUS YEAR. IN THIS CONTEXT, FIRST WE EXAMINE AS TO WHETHER TO SATISFY THE WORDS PROPERTY IS LET, ACTUAL LET OUT FOR SOME PERIOD IS NECESSARY. AT THIS JUNCTURE, WE EXAMINE OTHER SUB-S ECTIONS OF SECTION 23 AND WE FIND THAT SUB-SECTION (3) OF SECTION 23 READ S AS UNDER: (3) THE PROVISIONS OF SUB-SECTION (2) SHALL NOT APPLY (A) THE HOUSE OR PART OF THE HOUSE IS ACTUALLY LET DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR; OR (B) ANY OTHER BENEFIT THEREFROM IS DERIVED BY THE O WNER. ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 16 16. FROM THE ABOVE, WE FIND THAT HERE, THE LEGISLATURE S IN THEIR WISDOM HAVE USED THE WORDS HOUSE IS ACTUALLY LET. THIS S HOWS US THAT THE WORDS PROPERTY IS LET CANNOT MEAN ACTUAL LETTING OUT OF THE PROPERTY BECAUSE HAD IT BEEN SO, THERE WAS NO NEED TO USE THE WORD ACTUALLY IN SUB-SECTION (3) OF THE SAME SECTION 23. REGARDING THE SCOPE OF REFERRING TO ACTUAL LET OUT IN PRECEDING PERIOD, WE FIND NO FORCE IN THE CO NTENTION OF THE DR, AS THE LEGISLATURE HAS USED THE PRESENT TENSE. EVEN IF WE INTERPRET IT SO, IT MAY LEAD TO UNDESIRABLE RESULT BECAUSE IN SOME CASE S, IF THE OWNER HAS LET OUT A PROPERTY FOR ONE MONTH OR FOR EVEN ONE DAY, T HAT PROPERTY WILL ACQUIRE THE STATUS OF LET OUT PROPERTY FOR THE PURP OSE OF THIS CLAUSE FOR THE ENTIRE LIFE OF THE PROPERTY EVEN WITHOUT ANY INTENT ION TO LET IT OUT IN THE RELEVANT YEAR. NOT ONLY THAT, EVEN IF THE PROPERTY WAS LET OUT AT ANY POINT OF TIME EVEN BY ANY PREVIOUS OWNER, IT CAN BE CLAIM ED THAT THE PROPERTY IS LET OUT PROPERTY BECAUSE THE CLAUSE TALKS ABOUT THE PROPERTY AND NOT ABOUT THE PRESENT OWNER AND SINCE THE PROPERTY WAS LET OU T IN PAST, IT IS A LET OUT PROPERTY ALTHOUGH, THE PRESENT OWNER NEVER INTENDED TO LET OUT THE SAME. IN OUR CONSIDERED OPINION, IT IS NOT AT ALL RELEVAN T AS TO WHETHER THE PROPERTY WAS LET OUT IN PAST OR NOT. ACCORDING TO U S, THESE WORDS DO NOT TALK OF ACTUAL LET OUT ALSO BUT TALK ABOUT THE INTE NTION TO LET OUT. IF THE PROPERTY IS HELD BY THE OWNER FOR LETTING OUT AND E FFORTS WERE MADE TO LET IT OUT, THAT PROPERTY IS COVERED BY THIS CLAUSE AND TH IS REQUIREMENT HAS TO BE SATISFIED IN EACH YEAR THAT THE PROPERTY WAS BEING HELD TO LET OUT BUT REMAINED VACANT FOR WHOLE OR PART OF THE YEAR. WE F EEL THAT THE WORDS PROPERTY IS LET ARE USED IN THIS CLAUSE TO TAKE O UT THOSE PROPERTIES FROM THE AMBIT OF THE CLAUSE IN WHICH PROPERTY ARE HELD BY THE OWNER FOR SELF- OCCUPATION I.E., SELF-OCCUPIED PROPERTY (I.E. SOP) BECAUSE EVEN INCOME ON ACCOUNT OF SOP, EXCLUDING ONE SUCH SOP OF WHICH ANN UAL VALUE IS TO BE ADOPTED AT NIL, IS ALSO TO BE COMPUTED UNDER THIS H EAD AS PER CLAUSE (A) OF SECTION 23(1) IF WE SEE THE COMBINED READING OF SUB -SECTIONS (2) AND (4) OF SECTION 23. ONE THING IS MORE IMPORTANT BECAUSE WE FIND THAT WHERE THE LEGISLATURES HAVE CONSIDERED THAT ACTUAL LETTING OU T IS REQUIRED, THEY HAVE USED THE WORDS HOUSE IS ACTUALLY LET. THIS CAN BE SEEN IN SUB-SECTION (3) OF SAME SECTION 23. BUT IN CLAUSE (C) ABOVE, ACTUA LLY LET WORDS ARE NOT USED AND THIS ALSO SHOWS THAT MEANING AND INTERPRET ATION OF THE WORDS PROPERTY IS LET CANNOT BE PROPERTY ACTUALLY LET OUT. IN OUR OPINION, IT TALKS OF PROPERTIES, WHICH ARE HELD FOR LETTING OUT HAVING INTENTION TO LET OUT IN THE RELEVANT YEAR COUPLED WITH EFFORTS MADE FOR LETTING IT OUT. IF ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 17 THESE CONDITIONS ARE SATISFIED, IT HAS TO BE HELD T HAT THE PROPERTY IS LET AND THE SAME WILL FALL WITHIN THE PURVIEW OF THIS CLAUS E. 17. IN VIEW OF THIS INTERPRETATION OF THE WORDS PROPE RTY IS LET IN THE ABOVE CLAUSE (C), NOW WE EXAMINE THE FACTS OF THE P RESENT CASE. IN THE PRESENT CASE, THE ASSESSEE IS A COMPANY. THE COMPAN Y CAN HOLD A PROPERTY EITHER TO USE IT FOR ITS OWN BUSINESS OR T O LET OUT. IN THE PRESENT CASE, THERE WAS NO BUSINESS ACTIVITY AND THERE WAS NO INTENTION TO USE THE SAME FOR OWN BUSINESS. EVEN IF THAT IS THERE, IN TH AT EVENT ALSO, NO INCOME CAN BE ASSESSED UNDER THE HEAD 'INCOME FROM HOUSE P ROPERTY' IN VIEW OF THE EXCLUSION IN SECTION 22. THE OTHER POSSIBLE USE CAN BE TO LET OUT. 18. WE HAVE CAREFULLY EXAMINED THE MATERIAL PLACED ON RECORD AND WE FIND FROM THE MEMORANDUM OF ASSOCIATION THAT THE AS SESSEE IS ENTITLED TO PURCHASE THE PROPERTY FOR ITS LET OUT AND TO EARN R ENTAL INCOME. COPIES OF RESOLUTIONS OF BOARD OF DIRECTORS ARE ALSO PLACED B EFORE US IN BOTH THE CASES WHERE FROM IT IS EVIDENT THAT ONE OF THE DIRE CTOR WAS AUTHORIZED TO TAKE NECESSARY STEPS TO LET OUT THE PROPERTY IN QUE STION. THEY HAVE ALSO FIXED THE MONTHLY RENT AND THE SECURITY DEPOSITS OF BOTH THE PROPERTIES. CONSEQUENT TO THE RESOLUTIONS, THE ASSESSEE HAS APP ROACHED TO VARIOUS ESTATE AND FINANCE CONSULTANTS FOR LETTING OUT THE PROPERTIES AND THE REQUEST WAS ALSO DULY ACKNOWLEDGED BY THE ESTATE AN D FINANCE CONSULTANTS. THE SERIES OF CORRESPONDENCE ARE PLACE D BEFORE US TO DEMONSTRATE THE EFFORTS MADE BY THE ASSESSEE FOR LE TTING OUT OF ITS PROPERTIES, BUT, UNFORTUNATELY DURING THE YEAR UNDE R APPEAL, ASSESSEE COULD NOT GET THE SUITABLE TENANT ON ACCOUNT OF HEF TY RENT AND SECURITY DEPOSITS. THE CORRESPONDENCE EXCHANGED BETWEEN THE ASSESSEE AND THE DIFFERENT PROPERTY CONSULTANTS ARE PLACED ON RECORD AT PAGE NOS. 31 TO 100. FROM THIS CORRESPONDENCE, IT IS, NOTICED THAT THE ASSESSEE HAS APPROACHED VARIOUS PROPERTY CONSULTANTS TO LET OUT ITS PROPERTIES AND DURING THE YEAR, IT COULD NOT GET A SUITABLE TENANT . FROM A CAREFUL PERUSAL OF THESE DOCUMENTS, IT HAS BECOME EVIDENT THAT DURI NG THE WHOLE YEAR, ASSESSEE MADE ITS CONTINUOUS EFFORTS TO LET OUT THE PROPERTIES AND UNDER THESE CIRCUMSTANCES, THIS PROPERTY CAN BE CALLED TO BE LET OUT PROPERTY IN TERMS OF OUR OBSERVATIONS IN FOREGOING PARAS. SINCE THE PROPERTY HAS BEEN HELD TO BE LET OUT PROPERTY, ITS ANNUAL LETTING VAL UE CAN ONLY BE WORKED OUT ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 18 AS PER SUB-CLAUSE (C) OF SECTION 23(1) OF THE I.T. ACT AND ACCORDING TO THIS CLAUSE, THE RENT RECEIVED OR RECEIVABLE DURING THE YEAR IS NIL AND AS SUCH THE SAME BE TAKEN AS THE ANNUAL VALUE OF THE PROPER TY IN ORDER TO COMPUTE THE INCOME FROM HOUSE PROPERTY. WE, THEREFORE, ORDE R ACCORDINGLY. 19. IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWE D. 14. AS REGARDS THE INTERPRETATION OF THE WORD PROP ERTY IS LET, THE ISSUE HAS BEEN DECIDED BY I.T.A.T., MUMBAI BENCH. CONSIDERING PRI NCIPLE OF CONSISTENCY, WE FOLLOW THE ORDER OF CO-ORDINATE BENCH. WE, THEREFO RE, IN PRINCIPLE FOLLOW THE RATIO LAID DOWN BY THE I.T.A.T., MUMBAI BENCH IN THE ABOV E CASE OF PREMSUDHA EXPORTS P. LTD. (SUPRA). HOWEVER, THE SAID ORDER IS DISTIN GUISHABLE ON FACTS THAT IN THAT CASE THE ASSESSEE HAS TAKEN NECESSARY EFFORTS TO LET OUT THE PROPERTIES BUT IN THE CASE UNDER CONSIDERATION WE NOTICE THAT THE ASSESSEE DID NOT TAKE ANY EFFORTS FOR LETTING OUT THOSE PROPERTIES. IN THIS REGARD, THE CIT(A) H AS RECORDED THE FINDING AT PAGE NO.21 OF HIS ORDER THAT THE LD. AUTHORISED REPRESEN TATIVE DID NOT PRODUCE ANY EVIDENCE TO SHOW THAT ALL THE EFFORTS WERE MADE BY THE ASSESSEE DURING THE YEAR UNDER CONSIDERATION TO GET THIS PROPERTY LET OUT IN ORDER TO THE INTENTION OF THE ASSESSEE TO LET OUT THE PROPERTY. IT WAS SIMPLY ST ATED THAT THESE PROPERTIES HAVE BEEN LET OUT IN SUBSEQUENT YEAR. THERE IS NO CHANG E IN FACTS IN THIS REGARD AS THE ASSESSEE HAS FAILED TO FURNISH SUCH MATERIAL OR EVI DENCE BEFORE US ALSO. THUS, THE ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 19 SAID ORDER OF THE I.T.A.T., MUMBAI BENCH IS DISTING UISHABLE ON FACTS AND A NIL ANNUAL VALUE CANNOT BE TAKEN IN THESE CASES AS CLAI MED BY THE LD. A.R. BEFORE US. 15. NOW WE COME TO THE ISSUE WHETHER DETERMINATION OF ANNUAL VALUE IS IN ACCORDANCE WITH SECTION 23(1)(A) OF THE ACT. SECTI ON 23(1)(A) OF THE ACT PROVIDES THAT THE SUM FOR WHICH THE PROPERTY MIGHT REASONABL Y BE EXPECTED TO LET FROM YEAR TO YEAR. THERE ARE VARIOUS CONSIDERATION WHICH ARE RELEVANT FOR DETERMINATION OF ANNUAL VALUE UNDER SECTION 23(1)(A) OF THE ACT, OUT OF WHICH, ONE OF THE CONSIDERATION IS ANNUAL VALUE AS TAXED BY MUNICIPAL ITY OR LOCAL AUTHORITY FOR THE PURPOSE OF MUNICIPAL OR LOCAL TAX. IT IS RELEVANT TO NOTE THAT THE LOCAL AUTHORITY NORMALLY MAKES A PERIODICAL SURVEY OF ALL THE BUILD INGS WITHIN ITS AREA FOR DETERMINING ANNUAL LETTING VALUE FOR THE PURPOSE OF LEVY OF MUNICIPAL TAXES ON THOSE PROPERTIES. FOR THAT PURPOSE THE NORMAL PROC EDURE IS THAT THE SURVEYOR DETERMINES THE GROSS RENT RECEIVABLE FROM THE PROPE RTY AFTER TAKING INTO ACCOUNT ALL THE RELEVANT CIRCUMSTANCES. THE METHOD OF DETERMIN ATION OF ANNUAL MUNICIPAL VALUATION MAY DIFFER IN CERTAIN MAJOR DETAILS IN CE RTAIN MUNICIPALITIES BUT BY AND LARGE SUCH ANNUAL MUNICIPAL VALUATION REPRESENTS TH E SUN FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YE AR. HENCE IN CASES WHERE THERE IS NO OTHER EVIDENCE, THE MUNICIPAL ANNUAL VALUATIO N WITH SUCH ADJUSTMENT AS MAY ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 20 BE NECESSARY ON THE FACTS OF THE CASE WOULD BE RELE VANT FOR DETERMINING THE ANNUAL VALUATION UNDER SECTION 23 OF THE ACT. IN THE CASE OF C.J. GEORGE VS. CIT, 92 ITR 137 (KERALA), THE PLEA OF THE ASSESSEE WAS THAT THE RENT FOR WHICH THE PROPERTY HAD BEEN LET WAS HIGHER THAN THE SUM OF WHICH THE PROPE RTY MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR AND HENCE THE REN T RECEIVED BY HIM SHOULD NOT BE REGARDED AS ANNUAL VALUE OF THE PROPERTY AND THAT T HE ANNUAL VALUE SHOULD BE DETERMINED AT A LOWER FIGURE. THE ASSESSEE PRODUCE D A CERTIFICATE OF THE LOCAL AUTHORITY SHOWING THAT ANNUAL LETTING VALUE HAD BEE N FIXED AT LOWER FIGURE BY THE LOCAL AUTHORITY. THE TRIBUNAL REJECTED THE SAID CE RTIFICATE AND ADOPTED THE FIGURE OF RENT ACTUALLY RECEIVED FOR DETERMINING THE ANNUAL V ALUE. IT WAS HELD THAT THE TRIBUNAL HAD ERRED IN REJECTING THE CERTIFICATE PAR TICULARLY WHEN THE LOCAL AUTHORITY HAD TAXED THE ANNUAL LETTING VALUE AFTER TAKING INT O CONSIDERATION THE FACT THAT THE PROPERTY HAD BEEN LET OUT AT HIGHER RENT AND ALSO T HE CIRCUMSTANCES IN WHICH IT HAD BEEN LET OUT AT HIGHER RENT AND IT WAS AFTER CONSID ERING THE ENTIRE CIRCUMSTANCES THAT THE ANNUAL LETTING VALUE HAD BEEN FIXED AT A LOWER AMOUNT. IT WAS OBSERVED THAT THE CERTIFICATE OF LOCAL AUTHORITY FURNISHED PRIMA FACI E EVIDENCE TO SUSTAIN THE CONTENTION OF THE ASSESSEE THAT THE CONTRACTUAL REN T WAS IN EXCESS OF THE REASONABLE RENT THAT COULD BE EXPECTED FROM THE BUILDING AND T HE CERTIFICATE COULD BE RELIED ON TO DETERMINE AS TO WHAT WAS THE RENT THAT THE BUILD ING COULD REASONABLY BE EXPECTED ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 21 TO FETCH. THOUGH THIS DECISION PERTAINS TO OLD PRO VISIONS OF SECTION 23 BUT THE RELEVANT CONSIDERATION IS THAT THE CERTIFICATE OF T HE LOCAL AUTHORITY WAS CONSIDERED AS A PRIMA FACIE EVIDENCE FOR THE PURPOSE OF DETERMINI NG ANNUAL VALUE UNDER SECTION 23 OF THE ACT. SIMILAR IS THE VIEW TAKEN BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF JAMNADAS PRABHUDAS VS. CIT, 20 ITR 160 (BOM.) WHERE MUNICIPAL VALUATION WAS TAKEN AS BASIS FOR DETERMINING THE AN NUAL VALUE. THE HONBLE PATNA HIGH COURT IN THE CASE OF KASHIPRASAD KATARUKA VS. CIT, 101 ITR 810 (PATNA) WHEREIN IT WAS EMPHASIZED THAT THERE WAS PRESUMPTIO N THAT MUNICIPAL VALUATION AFFORDS AN INDICATION AS TO THE REASONABLE ANNUAL L ETTING VALUE OF A BUILDING AND SUCH VALUATION COULD BE EITHER REDUCED OR ENHANCED ONLY ON THE BASIS OF OTHER MATERIALS PRODUCED ON RECORD FOR THE PURPOSE OF SUC H REBUTTAL. THE HONBLE MADRAS HIGH COURT IN THE CASE OF CIT VS. M.R. ALAGA PPAN, 164 ITR 690 (MAD.) WHEREIN IT HAS BEEN HELD THAT ANNUAL LETTING VALUE FIXED BY THE MUNICIPAL AUTHORITIES WAS HELD TO BE A RELEVANT CONSIDERATION FOR THE PUR POSE OF DETERMINATION OF ANNUAL LETTING VALUE OF THE PROPERTY FOR COMPUTING THE INC OME FROM HOUSE PROPERTY UNDER SECTION 23 OF THE ACT. THE HONBLE DELHI HIGH COUR T IN THE CASE OF CIT VS. S.P. SHARMA, 122 ITR 675 (DELHI) WHEREIN IT HAS BEEN HEL D THAT THE MUNICIPAL ASSESSMENT IS MADE BY FOLLOWING A CERTAIN PROCEDURE UNDER WHICH A PERIODICAL SURVEY IS MADE OF ALL BUILDINGS AND ON THE BASIS OF SUCH SURVEY THE GROSS RENT ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 22 RECEIVABLE FROM THE PROPERTY IS DETERMINED AND THER EAFTER VARIOUS TYPES OF SERVICES RENDERED ARE TAKEN INTO ACCOUNT AND THEN A FIGURE F OR THE PURPOSE OF ANNUAL MUNICIPAL VALUATION IS ARRIVED AT. IF SUCH AN ANNU AL VALUE HAS BEEN ASSESSED AT OR ABOUT THE RELEVANT TIME AND AFTER TAKING INTO CONSI DERATION ALL THE RELEVANT FACTORS AND IF THE FIGURES OF ACTUAL RENT ARE NOT AVAILABLE , THEN THE FIGURE OF ANNUAL VALUE DETERMINED FOR MUNICIPAL PURPOSE CAN BE PRESUMED TO BE THE CORRECT FIGURE OF ANNUAL VALUE AND CAN BE ADOPTED FOR INCOME TAX PURP OSES. 16. AS REGARDS THE JUDGEMENT OF HONBLE ALLAHABAD H IGH COURT RELIED UPON BY THE A.O. IN THE CASE OF SMT. RADHA DEVI DALMIYA VS. CIT, 125 ITR 134 (ALL.), WE FIND THAT THE SAID JUDGEMENT IS DISTINGUISHABLE ON FACTS. THE SAID JUDGEMENT HAS CONSIDERED THE OLD PROVISIONS WHERE SECTION 23(1)(C ) OF THE ACT WAS NOT IN STATUTE. SECTION 23 OF THE ACT HAD SUBSTANTIALLY AMENDED W.E .F. 01.04.1993 BY INSERTING THE CLAUSE(C) OF SUB-SECTION (1) OF SECTION 23 WHEREIN IT HAS BEEN PROVIDED THAT IF THE PROPERTY IS LET OUT AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR AND OWING TO SUCH VACANCY THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS LESS THAN THE SUM REFERRED TO IN CLAUSE (A), THE AMOUNT SO RECEIVED OR RECEIVABLE, THIS CLAUSE WAS NOT THERE. THEREFOR E, THE ANNUAL VALUE WAS TO BE DETERMINED IN ACCORDANCE WITH SECTION 23(1)(A) AND IN ACCORDANCE WITH SECTION 23 ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 23 (1)(B) OF THE ACT. THEREFORE, THE CIRCUMSTANCES WH ERE THE ANNUAL VALUE CAN BE NIL, AS CLAIMING BY THE ASSESSEE, THIS ASPECT OF THE MAT TER HAS NOT BEEN CONSIDERED IN THE SAID JUDGEMENT OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF SMT. RADHA DEVI DALMIA (SUPRA). IN ADDITION TO THE ABOVE AS S TATED ABOVE THAT THE DETERMINATION OF ANNUAL VALUE UNDER SECTION 23 DEPE NDS UPON THE FACTS OF THE EACH CASE, IN THE CASE OF SMT. RADHA DEVI DALMIYA (SUPRA ), IT WAS FOUND THAT THE LETTING VALUE DETERMINED BY THE MUNICIPAL AUTHORITY WAS VER Y LOW. THEREFORE, THE COURT HAS CONFIRMED THE DETERMINATION OF ANNUAL VALUE BY THE REVENUE AUTHORITIES. THUS, THE A.O. AND THE CIT(A) BOTH HAVE ERRED IN STRAIGHT WAY APPLYING THE SAID JUDGEMENT IN THE CASE OF SMT. RADHA DEVI DALMIYA (S UPRA) WITHOUT MAKING ENQUIRIES OR EXAMINATIONS IN RESPECT OF DETERMINATI ON OF ANNUAL VALUE. IN THE CASE UNDER CONSIDERATION, NEITHER THE REVENUE AUTHORITIE S HAVE TAKEN ANY STEPS NOR HAS THE ASSESSEE FURNISHED NECESSARY EVIDENCE IN RESPEC T OF DETERMINATION OF ANNUL LETTING VALUE. THEREFORE, THE SAID JUDGEMENT OF HO NBLE ALLAHABAD HIGH COURT IN THE CASE OF SMT. RADHA DEVI DALMIYA (SUPRA) IS NOT APPLICABLE TO THE FACTS OF THE CASE UNDER CONSIDERATION AND THE SAME IS DISTINGUIS HABLE. 17. IN THE LIGHT OF THE ABOVE DISCUSSIONS, IF WE CO NSIDER THE FACTS OF THE CASE AS STATED ABOVE THAT NEITHER THE REVENUE AUTHORITIES N OR THE ASSESSEE HAS BROUGHT ON ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 24 RECORD ANY MATERIAL OR EVIDENCE IN SUPPORT OF THE D ETERMINATION OF ANNUAL VALUE OF PROPERTIES, HOWEVER, THE ASSESSEE HAS FURNISHED EVI DENCE IN RESPECT OF ANNUAL VALUE DETERMINED BY MUNICIPAL/LOCAL AUTHORITY, AGRA NAGAR NIGAM IN SUPPORT OF ANNUAL VALUE OF CONCERNED PROPERTIES. SUCH MATERIAL IS RE LEVANT AND RELATED TO THE CONCERNED PROPERTIES AS PER DETAILED DISCUSSIONS MA DE IN PARAGRAPH NO.15 OF THIS ORDER. THEREFORE, WE ARE OF THE VIEW THAT THE ANNU AL VALUATION TAKEN BY THE LOCAL AUTHORITY IS ONE OF THE BASIS UNDER THE PECULIAR FA CTS AND CIRCUMSTANCES OF THESE CASES FOR DETERMINING THE ANNUAL VALUE UNDER SECTIO N 23(1)(A) OF THE ACT. SINCE ADDITIONAL EVIDENCE IS ADMITTED BY US FIRST TIME, T HEREFORE, THE A.O. IS DIRECTED TO VERIFY THE ANNUAL VALUATION DETERMINED BY THE LOCAL AUTHORITY/AGRA NAGAR NIGAM AND DETERMINE THE ANNUAL VALUE FOR THE PURPOSE OF S ECTION 23(1)(A) OF THE ACT IN ACCORDANCE WITH ANNUAL VALUE DETERMINED BY LOCAL AU THORITIES. 18. BEFORE PARTING FROM THE MATTER, IT IS RELEVANT TO STATE THAT THE ANNUAL VALUE DETERMINED BY THE MUNICIPAL/LOCAL AUTHORITY HAS BEE N CONSIDERED IN THE CASE UNDER CONSIDERATION IS ONE OF THE BASIS OF DETERMINATION OF ANNUAL VALUE FOR THE PURPOSE OF SECTION 23(1)(A) OF THE ACT. UNDER THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE UNDER CONSIDERATION, AS NEITHER THE ASSESSEE N OR THE REVENUE HAS BROUGHT ON RECORD ANY OTHER MATERIAL BASED ON WHICH THE ANNUAL VALUE OF THESE PROPERTIES CAN ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 25 BE DETERMINED IN ACCORDANCE WITH SECTION 23(1)(A) O F THE ACT, THEREFORE, THE RATIO OF THIS ORDER IS NOT APPLICABLE TO OTHER CASES AS ANNU AL VALUE UNDER SECTION 23 OF THE ACT IS TO BE DETERMINED IN ACCORDANCE WITH FACTS OF EACH CASE. 19. IN THE LIGHT OF ABOVE DISCUSSION, WE ARE SENDIN G BACK THE MATTER TO THE FILE OF A.O. WITH THE DIRECTION TO VERIFY THE ADDITIONAL EV IDENCES FILED BY THE ASSESSEE IN THE FORM OF ANNUAL VALUE DETERMINED BY THE LOCAL AU THORITY AND RECALCULATE THE ANNUAL VALUE OF THESE PROPERTIES UNDER SECTION 23(1 )(A) OF THE ACT ON SUCH ADDITIONAL EVIDENCE AFTER PROVIDING REASONABLE OPPO RTUNITIES OF HEARING TO THE ASSESSEES. 20. THE SECOND EFFECTIVE GROUND IS IN RESPECT OF AD DITION ON ACCOUNT OF HOUSE HOLD EXPENSES. 21. AFTER HEARING THE LD. REPRESENTATIVES OF THE PA RTIES, WE NOTICE THAT THE A.O. MADE ADDITION ON ACCOUNT OF HOUSE HOLD EXPENSES ON PRESUMPTION BASIS. IT IS ADMITTED FACT THAT DURING THE COURSE OF SEARCH NO I NCRIMINATING MATERIAL WAS FOUND IN RESPECT OF HOUSE HOLD EXPENSE BASED ON WHICH ADD ITION CAN BE MADE. THE CIT(A) ALSO, ON THE BASIS OF PRESUMPTION, FOUND THA T THE A.O. HAS ESTIMATED EXCESS ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 26 HOUSE HOLD EXPENDITURE. HE, THEREFORE, ALLOWED THE PART RELIEF. THE CIT(A) FOUND THAT THE A.O. HAS MADE EXCESS ESTIMATION OF HOUSE H OLD EXPENSES. THE ASSESSEE FURNISHED THE FOLLOWING CHART IN SUPPORT OF THE CON TENTION THAT REASONABLE HOUSE HOLD EXPENSES HAVE BEEN SHOWN IN ALL THE YEARS :- DETAILS OF HOUSE HOLD EXPENSES/WITHDRAWALS NAME OF PERSONS 2002-03 2003-04 2004-05 2005-06 2006-07 2007-08 200 8-09 1 JITENDRA KUMAR KESHWANI 18000 (NARENDRA PRODUCTS) 19500 (NARENDRA PRODUCTS) 29000 (NARENDRA PROD) RENT 220000 BANK 25000 BANK 40000 (NARENDA PRODUCT) 14000 BANK 2 JAGDISH KESHWANI 12000 SUR. INCOME 50000 RENT 89000 RENT 30000 RENT 25000 BANK 120000 K.S.60000 SSF 60000 180000 VT 120000 SSF 60000 3 SHYAM SUNDER KESHWANI 26000 SALARY NARENDRA PROD. 22000 SALARY NARENDRA PROD 37000 SALARY NARENDRA/RENT 30000 RENT 290000 BANK 68000 SSF 96000 SSF 4 MAHENDA KUMAR KESHWANI 71000 (NARENDRA PRODUCTS) 112000 NP 72000 BANK 40000 180000 NP/RENT 44000 (NARENDRA PRODUCTS) 46000 SALARY NARENDRA PROD 96000 SSF/SALARY 125000 VARSHA TRA 5 NARENDRA KUMAR KESHWANI 81000 NARENDRA PROD 39000 NARENDRA PROD 36000 NARENDRA PROD 60000 NARENDRA PROD 60000 NARENDRA PROD 120000 NARENDRA PROD 180000 NARENDRA/PROP 6 LAXMAN DASS KESHWANI 74000 NARENDRA PROD 65000 NARENDRA PROD 65000 NARENDRA PROD 70000 NARENDRA PROD 55000 NARENDRA PROD 127000 NARENDRA PROD 36000 NARENDTRA PROD 7 KAMAL KUMAR KESHWANI 120000 KAMAL STORE 34000 KS TRADING 120000 K.S. TRADING 120000 KSTRADING 200000 K.S.TRADING 180000 KSTRADING 200000 8 HARDEVI KESHWANI 30000 30000 30000 30000 36000 60000 60000 4,32,000 3,71,500 5,86,000 6,04,000 7,37,000 8,11 ,000 8,91,000 ESTIMATED BY A.O. 6,00,000 6,00,000 9,00,000 9,00,0 00 12,00,000 12,00,000 12,00,000 ESTIMATED BY CIT(A) 4,80,000 4,80,000 6,00,000 7,20 ,000 8,40,000 9,60,000 10,80,000 ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 27 22. ON A PERUSAL OF THE ABOVE COMPARATIVE POSITION OF DIFFERENT YEARS HOUSE HOLD EXPENSES, WE FIND THAT THE ESTIMATION MADE BY THE A.O. ON ACCOUNT OF HOUSE HOLD EXPENSES ARE ARBITRARY. THE CIT(A) HAS ALSO S USTAINED THE ADDITION ON THE BASIS OF ARBITRARY ESTIMATION. IN A.Y. 2003-04 THE ASSESSEE HAS SHOWN HOUSE HOLD EXPENSES OF RS.3,71,500/-, WHEREAS THE CIT(A) HAS E STIMATED AT RS.4,80,000/-. THE ADDITION OF RS.8,500/- HAS BEEN SUSTAINED IN A. Y. 2003-04. SIMILARLY, IN A.Y. 2008-09 THE CIT(A) HAS ESTIMATED THE HOUSE HOLD EXP ENSES AT RS.10,80,000/- AGAINST THE HOUSE HOLD EXPENSES SHOWN BY THE ASSESS EE AT RS.8,91,000/-. THE ADDITION OF RS.1,89,000/- HAS BEEN SUSTAINED BY THE CIT(A). THE FACTS OF THE CASE REGARDING FAMILY STATUS AND OTHER FOR A.Y. 2003-04 AND 2008-09 ARE SAME WHEREAS THE ADDITION SUSTAINED IN A.Y. 2003-04 WAS RS.8,500 /- AND IN A.Y. 2008-09 IT WAS RS.1,89,000/- WHICH CLEARLY ESTABLISHES THAT THE ES TIMATION MADE BY THE REVENUE AUTHORITIES ON ACCOUNT OF HOUSE HOLD EXPENSES ARE A RBITRARY WITHOUT ANY BASIS PARTICULARLY UNDER THE CIRCUMSTANCES WHERE DURING T HE COURSE OF SEARCH NO SUCH MATERIAL WAS FOUND IN THIS REGARD. FURTHER, WE CON FIRMED THE ADDITIONS IN RESPECT OF BILLS RELATED TO HOUSE HOLD APPLIANCES WHICH WER E FOUND AT THE TIME OF SEARCH IN ITA NO.103/AGR/2012 FOR A.Y. 2002-03, ITA NO.105/AG R/2012 FOR A.Y.2005-06, ITA NO.355/AGR/2012 FOR A.Y. 2005-06 & ITA NO.347/A GR/2012 FOR A.Y. 2007- 08 WHILE DECIDING SEPARATE GROUNDS OF THOSE APPEALS IN SUBSEQUENT PARAS OF THIS ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 28 ORDER. IN THE LIGHT OF THE FACTS, THE ARBITRARY AD DITION MADE ON ACCOUNT OF HOUSE HOLD EXPENSES ARE NOT SUSTAINABLE. WE, THEREFORE, DELETE THE ADDITION MADE BY THE A.O. AND SUSTAINED BY THE CIT(A). 23. IN THE RESULT, APPEAL OF THE ASSESSEE IN ITA NO .351/AGR/2012 IS PARTLY ALLOWED AS INDICATED ABOVE. 24. NOW WE TAKE UP THE REMAINING APPEALS MENTIONED ABOVE APART FROM ITA NO.351/AGR/2012. IN ALL THE APPEALS, THE LD. AUTHO RISED REPRESENTATIVE SIMILARLY DID NOT PRESS OTHER GROUNDS WHICH HAVE NOT BEEN PRE SSED IN ITA NO.351/AGR/2012. THEREFORE, THE SAME ARE DISMISSED BEING NOT PRESSED . THE OTHER ISSUES LEFT FOR CONSIDERATION ARE DETERMINATION OF ANNUAL LETTING V ALUE OF THE PROPERTIES IN QUESTION AND ESTIMATION OF HOUSE HOLD EXPENSES. BOTH THE PA RTIES ADMITTED THAT THESE ISSUES ARE SAME AS HAVE BEEN CONSIDERED AND DECIDED IN ITA NO.351/AGR/2012. FOLLOWING THE ORDER IN ITA NO.351/AGR/2012, THE ISS UE OF DETERMINATION OF ANNUAL LETTING VALUE IS REMANDED TO THE FILE OF A.O. BY AD MITTING ADDITIONAL EVIDENCES WITH IDENTICAL DIRECTION AND THE ADDITION ON ACCOUNT OF HOUSE HOLD EXPENSES ARE DELETED IN THE RESPECTIVE REMAINING APPEALS. ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 29 25. IN THE RESULT, ALL THE REMAINING APPEALS ON BOT H THE ISSUES ARE PARTLY ALLOWED AS HAVE BEEN DECIDED IN ITA NO.351/AGR/2012. 26. IN ADDITION TO THE COMMON GROUNDS OF APPEAL PER TAINING TO ANNUAL VALUE AND LOW HOUSE HOLD EXPENSES, THE OTHER GROUNDS RAISED I N THESE APPEALS ARE DECIDED AS UNDER :- ITA NO.347/AGR/2012 A.Y. 2007-08 SHRI NARENDRA KUMAR KESHWANI 27. GROUND NO.3 IS IN RESPECT OF ADDITION OF RS.22, 840/- MADE BY THE A.O. ON ACCOUNT OF UNEXPLAINED INVESTMENT IN PURCHASE OF WA SHING MACHINE. THE A.O. MADE THE ADDITION AS DURING THE COURSE OF SEARCH A BILL NO.1140 DATED 10.03.2007 WAS FOUND. THE SAID BILL RELATES TO A WASHING MACH INE FOR RS.22,840/- WHICH WAS PURCHASED FROM M/S. IFB INDUSTRIES LIMITED, GHAZIAB AD. THE ASSESSEE DID NOT EXPLAIN THE SOURCE OF THE SAID WASHING MACHINE. TH EREFORE, THE A.O. MADE THE ADDITION. 28. THE CIT(A) CONFIRMED THE ADDITION ON THE GROUND THAT DURING THE COURSE OF SEARCH THE BILL WAS FOUND IN THE NAME OF THE ASSESS EE AND AS PER SECTION 132(4A) IT ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 30 WILL BE PRESUMED THAT IT IS UNACCOUNTED INVESTMENT. SINCE THE ASSESSEE DID NOT FURNISH SATISFACTORY EXPLANATION READING SOURCE OF THAT INVESTMENT, THE CIT(A) CONFIRMED THE ADDITION.. 29. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. WE FIND THAT THE CIT(A) CONFIRMED THE ADDITION AS T HE BILL WAS FOUND AT THE TIME OF SEARCH AND THE ASSESSEE DID NOT FURNISH ANY EXPLANA TION. THE ASSESSEE HAS FAILED TO EXPLAIN THE SOURCE OF THE SAID AMOUNT EXCEPT GENERA L SUBMISSION THAT IT HAS BEEN PURCHASED OUT OF HOUSEHOLD WITHDRAWALS. SINCE WE H AVE DELETED THE ADDITION ON ACCOUNT OF LOW HOUSE HOLD WITHDRAWALS WHICH WAS MAD E BY THE A.O. ON ADHOC AND ESTIMATION BASIS WITHOUT ANY BASIS AND SINCE THIS A DDITION IS SUPPORTED BY THE BILL WHICH WAS FOUND AT THE TIME OF SEARCH, IN THE LIGHT OF THE FACT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A). ORDER OF THE CIT (A) IS CONFIRMED ON THE ISSUE. ITA NO.355/AGR/2012 A.Y. 2005-06SHRI MAHENDRA KU MAR KESHWANI 30. GROUND NO.3 IS IN RESPECT OF ADDITION OF RS.20, 000/- MADE BY THE A.O. ON ACCOUNT OF PURCHASE OF AIR CONDITIONER. THE A.O. M ADE THE ADDITION OF AS DURING THE COURSE OF SEARCH A CHALLAN DATED 26.04.2004 ISS UED BY M/S. MARUTI ELECTRONICS, ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 31 AGRA IN THE NAME OF THE ASSESSEE WAS FOUND. THE SA ID CHALLAN WAS PERTAINING TO ONE LG AIR CONDITIONER. THE A.O. ASKED THE ASSESSE E TO EXPLAIN THE SOURCE OF INVESTMENT BUT THE ASSESSEE FAILED TO FURNISH SPECI FIC EXPLANATION IN THIS REGARD. THE ADDITION MADE BY THE A.O. HAS BEEN CONFIRMED BY THE CIT(A) ON THE GROUND THAT DURING THE COURSE OF SEARCH A CHALLAN/BILL WAS FOUND. IN THE LIGHT OF THE DISCUSSIONS MADE IN ITA NO.347/AGR/2012 FOR A.Y. 20 07-08 IN THE CASE OF SHRI NARENDRA KUMAR KESHWANI, WE FIND THAT THE FACTS OF THE ISSUE UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS OF THE ISSUE DISCUSSED I N THE ABOVE CASE. IN THE ALIGHT OF THE FACT, ORDER OF CIT(A) IS CONFIRMED ON THE ISSUE . ITA NO.105/AGR/2012 A.Y. 2005-06SHRI JITENDRA KU MAR KESHWANI 31. GROUND NO.3 IS IN RESPECT OF ADDITION OF RS.22, 500/- MADE BY THE A.O. ON ACCOUNT OF PURCHASE OF WASHING MACHINE. THE A.O. M ADE THE ADDITION ON THE BASIS OF BILL NO.887 DATED 07.03.2005 FOUND AT THE TIME OF SEARCH. THE SAID BILL WAS ISSUED BY M/S. RAJ MUSICO IN THE NAME OF THE AS SESSEE. THE ASSESSEE PURCHASED ONE LG WASHING MACHINE. THE ASSESSEE FAI LED TO FURNISH ANY EXPLANATION REGARDING SOURCE OF THE SAID WASHING MA CHINE. THE ADDITION MADE BY ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 32 THE A.O. HAS BEEN CONFIRMED BY THE CIT(A) AS THE A. O. HAS MADE THE ADDITION ON THE BASIS OF DOCUMENTS FOUND AT THE TIME OF SEARCH. 32. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ADDITION MADE BY THE A.O. HAS BEEN CONFIRMED BY THE CIT(A) ON THE GROUND THAT DURING THE COURSE OF SEARCH A BILL WAS FOUND. THE ASSESSEE FAILED TO FURNISH ANY EXPLANATION IN RESPECT OF SOURCE OF THE SAID IN VESTMENT. IN THE LIGHT OF THE DISCUSSIONS MADE IN ITA NO.347/AGR/2012 FOR A.Y. 20 07-08 IN THE CASE OF SHRI NARENDRA KUMAR KESHWANI, WE FIND THAT THE FACTS OF THE ISSUE UNDER CONSIDERATION ARE IDENTICAL TO THE FACTS OF THE ISSUE DISCUSSED I N THE ABOVE CASE. IN THE LIGHT OF THE FACT, ORDER OF CIT(A) IS CONFIRMED ON THE ISSUE. ITA NO.103/AGR/2012 A.Y. 2002-03 SHRI JITENDRA KUMAR KESHWANI 33. GROUND NO.3 IS IN RESPECT OF ADDITION OF RS.22, 500/- MADE BY THE A.O. ON ACCOUNT OF PURCHASE OF WASHING MACHINE. THE A.O. M ADE THE ADDITION ON THE BASIS OF BILL NO.183 DATED 10.11.2001 FOUND AT THE TIME OF SEARCH. THE SAID BILL WAS ISSUED BY M/S. IFB INDUSTRIES LIMITED, GHAZIABA D IN THE NAME OF ASSESSEE TOWARDS PURCHASE OF WASHING MACHINE-5988. THE ASSE SSEE FAILED TO FURNISH ANY ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 33 EXPLANATION REGARDING SOURCE OF THE SAID WASHING MA CHINE. THE ADDITION MADE BY THE A.O. HAS BEEN CONFIRMED BY THE CIT(A) AS THE A. O. HAS MADE THE ADDITION ON THE BASIS OF DOCUMENTS FOUND AT THE TIME OF SEARCH. 34. WE HAVE HEARD THE LD. REPRESENTATIVES OF THE PA RTIES AND RECORDS PERUSED. THE ADDITION WAS MADE BY THE A.O. ON THE BASIS OF D OCUMENTS FOUND AT THE TIME OF SEARCH. THE ASSESSEE FAILED TO FURNISH ANY EXPLANA TION IN RESPECT OF SOURCE OF THE SAID INVESTMENT. IN THE LIGHT OF THE DISCUSSIONS M ADE IN ITA NO.347/AGR/2012 FOR A.Y. 2007-08 IN THE CASE OF SHRI NARENDRA KUMAR KES HWANI, WE FIND THAT THE FACTS OF THE ISSUE UNDER CONSIDERATION ARE IDENTICAL TO T HE FACTS OF THE ISSUE DISCUSSED IN THE ABOVE CASE. IN THE LIGHT OF THE FACT, ORDER OF CIT(A) IS CONFIRMED ON THE ISSUE. 35. IN THE RESULT, ALL THE APPEALS FILED BY THE ASS ESSEE ARE PARTLY ALLOWED, AS DIRECTED IN THE ORDER. (ORDER PRONOUNCED IN THE OPEN COURT) SD/- SD/- (BHAVNESH SAINI) (A.L. GEHLOT) JUDICIAL MEMBER ACCOUNTANT MEMBER PBN/* ITA NOS.351, 370 & 353/AGR/2012 103, 104, 336, 105, 106, 107 & 108/AGR/2012 338, 109, 110, & 112/AGR/2012 99, 100, 101, 102 & 372/AGR/2012 373 TO 377/AGR/2012 354 TO 358/AGR/2012 343 TO 348/AGR/2012 34 COPY OF THE ORDER FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT (APPEALS) CONCERNED 4. CIT CONCERNED 5. D.R., ITAT, AGRA BENCH, AGRA 6. GUARD FILE. BY ORDER SR. PRIVATE SECRETARY INCOME-TAX APPELLATE TRIBUNAL, AGRA TRUE COPY