Vinod Kumar Manchanda, Delhi V. ACIT, Circle-63(1), New Delhi

ITA 3606/DEL/2019

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5067 (ITAT-DELHI)
• Duration Of Justice: 3 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-08-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: F
• Assessment Year: 2015-2016
• Appeal Filed On: 25-04-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SHRI N.K. BILLAIYA, ACCOUNTANT MEMBER & SHRI PAVAN KUMAR GADALE, JUDICIAL MEMBER ITA NO. 3606/DEL/2019 ASSESSMENT YEAR: 2015-16 VINOD KUMAR MANCHANDA A-70, NARAINA INDUSTRIAL AREA, PHASE-1, DELHI. PAN NO. AALPM8076D VS ACIT CIRCLE 63(1) NEW DELHI. APPELLANT RESPONDENT ASSESSEE BY SHRI MANPREET SINGH KAPOOR, CA REVENUE BY SHRI B.S. RAJ PUROHIT, SR. DR ORDER PER SHRI N.K. BILLAIYA, A.M. WITH THIS APPEAL, THE ASSESSEE HAS CHALLENGED THE C ORRECTNESS OF THE ORDER OF THE CIT(A)-38, NEW DELHI DATED 25.1 2.2017 PERTAINING TO AY 2015-16. 2. THE SUM AND SUBSTANCE OF THE GRIEVANCE OF THE AS SESSEE IS THAT THE CIT(A) ERRED IN CONFIRMING THE ADDITION OF RS. 15.75 LAKHS ON ACCOUNT OF NOTIONAL RENT FOR NINE MONTHS. 3. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT DU RING THE COURSE OF THE SCRUTINY ASSESSMENT PROCEEDINGS, THE AO NOTI CED THAT THE DATE OF HEARING 20.08.2019 DATE OF PRONOUNCEMENT 20.08.2019 2 ITA NO . 3606/DEL/2019 ASSESSEE HAS SHOWN ONLY THREE MONTH RENT FROM THE P ROPERTY AT CC-28, NEHRU ENCLAVE, KALKAJI, NEW DELHI. THE ASSE SSEE WAS ASKED TO SHOW CAUSE AS TO WHY DEEMED RENT FOR THE R EMAINING NINE MONTHS SHOULD NOT BE ADDED TO THE INCOME OF THE ASS ESSEE. THE ASSESSEE SUBMITTED THAT THE TENANT VACATED THE PROP ERTY AND THE ASSESSEE TRIED TO THE BEST LEVEL TO GET THE PROPERT Y ON RENT. 4. THE REPLY OF THE ASSESSEE DID NOT FIND ANY FAVOU R WITH THE AO WHO PROCEEDED BY MAKING ADDITION ON ACCOUNT OF NOTI ONAL RENT OF RS. 15.75 LAKHS. 5. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) BU T WITHOUT ANY SUCCESS. 6. BEFORE US, THE COUNSEL FOR THE ASSESSEE STATED T HAT THE IMPUGNED PROPERTY WAS LET OUT SINCE FY 2007-08 AND THE TENANTS KEPT ON CHANGING. IT IS THE SAY OF THE COUNSEL THA T THE LAST TENANT SAMSUNG INDIA ELECTRONICS PVT. LTD. VACATED THE PRO PERTY AFTER THREE MONTHS THEREAFTER, THE PROPERTY REMAINED VACA NT. THE COUNSEL STATED THAT SINCE THE PROPERTY COULD NOT BE RENTED OUT THE ACTUAL RENT RECEIVED FOR THREE MONTHS HAS BEEN SHOW N AS INCOME FROM HOUSE PROPERTY. THE COUNSEL PRAYED FOR THE DE LETION OF THE NOTIONAL RENT ADDED BY THE AO AMOUNTING TO RS. 15.7 5 LAKHS. 7. PER CONTRA, THE DR STRONGLY SUPPORTED THE FINDIN GS OF THE CIT(A) AND READ THE RELEVANT OPERATIVE PART OF THE ORDER OF THE CIT(A). 3 ITA NO . 3606/DEL/2019 8. WE HAVE CAREFULLY CONSIDERED THE ORDERS OF THE A UTHORITIES BELOW. THERE IS NO DISPUTE THAT THE PROPERTY WAS L ET OUT IN EARLIER ASSESSMENT YEARS WHICH CAN BE SEEN FROM THE FOLLOWI NG CHART: FY AY NAME OF TENANT TOTAL RENT RENT/ MONTH MONTH 2007-08 2008-09 SAMSUNG INDIA ELECTRONICS PVT. LTD. 2,594,440 216200 12 2008-09 2009-10 SAMSUNG INDIA ELECTRONICS PVT. LTD. 17,29,600 216200 8 2009-10 2010-11 GREEN VALLEY HOSPITALITY PVT. LTD. 25,20,000 240000 10.5 2010-11 2011-12 GREEN VALLEY HOSPITALITY PVT. LTD. 19,20,000 240000 8 2014-15 2015-16 SAMSUNG INDIA ELECTRONICS PVT. LTD. 7,50,000 250000 3 9. FROM THE ABOVE CHART, IT CAN BE SEEN THAT EVEN I N EARLIER FINANCIAL YEARS THE PROPERTY COULD NOT BE LET OUT F OR THE ENTIRE YEAR WHICH SHOWS THAT THE TENANTS KEEP ON VACATING THE P ROPERTY. IN OUR CONSIDERED VIEW, THE OBSERVATIONS OF THE CIT(A) ARE NOT CORRECT ON THE GIVEN FACTS OF THE CASE. OUR VIEW IS FORTIF IED BY THE CBDT CIRCULAR NO. 14/2001 DATED 09.11.2001, WHEREIN, INTER ALIA, THE BOARD HAS EXPLAINED WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR AND OWNING TO SUCH VACANCY THE ACTUAL RENT RECEIVED OR RECEIVABLE IS LESS THAN THE ALV THE SUM SO RECEI VED OR RECEIVABLE SHALL BE THE ANNUAL VALUE. IN CASE, THE ACTUAL REN T RECEIVED OR RECEIVABLE DURING THE YEAR IS LESS THAN THE ALV, BU T NOT BECAUSE OF VACANCY, IT IS THE ALV WHICH SHALL BE TAKEN TO BE T HE ANNUAL VALUE. 4 ITA NO . 3606/DEL/2019 10. THUS, IT CAN BE SEEN THAT EVEN THE BOARD HAS RE COGNIZED THAT THERE MAY BE A SITUATION IN THE CASE OF LET OUT PRO PERTY WHERE THE SAID PROPERTY REMAINS VACANT. 11. CONSIDERING THE FACTS OF THE CASE IN TOTALITY, WE DIRECT THE AO TO DELETE THE ADDITION ON ACCOUNT OF NOTIONAL RENT OF RS. 15.75 LAKHS. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ACCORDINGLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (PAVAN KR. GADALE) (N.K. BIL LAIYA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 20/08/2019 *KAVITA ARORA COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT TRUE COPY ASSISTANT REGISTRAR ITAT NEW DELHI 5 ITA NO . 3606/DEL/2019 DATE OF DICTATION 20.08.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 20.08.2019 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR. P S/PS 21.08.2019 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE D ICTATING MEMBER FOR PRONOUNCEMENT 20.08.2019 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/PS 21.08.2019 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WE BSITE OF ITAT 21.08.2019 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK 21.0 8.2019 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK THE DATE ON WHICH THE FILE GOES TO THE ASSISTANT RE GISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER