ACIT CC 39, MUMBAI V. RAINA JAIN, MUMBAI

ITA 3832/MUM/2014

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 84523 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-12-2014
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Next Hearing Date: 17-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 28-05-2014
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: B S BIST
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH D, MUMBAI BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER ITA NO.3832/M/2014 ASSESSMENT YEAR: 2010-11 ASST. COMMISSIONER OF INCOME TAX, CC-39, R.NO.32(1), GROUND FLOOR, AAYAKAR BHAVAN, MUMBAI - 400020 VS. MRS. RINA JAIN, 82, MAKER CHAMBERS-III, NARIMAN POINT, MUMBAI 400 021 PAN: AABPJ 1883F (APPELLANT) (RESPONDENT) ITA NO.3963/M/2014 ASSESSMENT YEAR: 2010-11 MRS. RINA VIRENDRA JAIN, 82, MAKER CHAMBERS-III, NARIMAN POINT, MUMBAI 400 021 PAN: AABPJ 1883F VS. DY. COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-39, R.NO.32(1), GR. FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400020 (APPELLANT) (RESPONDENT) PRESENT FOR: ASSESSEE BY : SHRI VIJAY MEHTA, A.R. REVENUE BY : SHRI B.S. BIST, D.R DATE OF HEARING :20.10.2016 DATE OF PRONOUNCEMENT :14.12.2016 O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE ABOVE CROSS APPEALS ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE HAVE ARISEN AGAINST THE ORDER DATED 28.02. 2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT YEAR 2010-11. ITA NO.3832/M/2014 & ITA NO.3963/M/2014 MRS. RINA VIRENDRA JAIN 2 2. THE SOLE ISSUE RAISED FOR DETERMINATION IN BOTH THE APPEALS IS RELATING TO THE ESTIMATION OF THE ANNUAL LETTING VALUE (ALV) OF THE VACANT FLATS OF THE ASSESSEE AT CENTRAL GARDEN COMPLEX. 3. THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSE E IS OWNING TOTAL 30 RESIDENTIAL FLATS IN THE BUILDING 'CENTRAL GARDEN C OMPLEX'. IN HER RETURN OF INCOME, THE ASSESSEE OFFERED THE ALV AS PER MUNICIP AL RATEABLE VALUE OF THESE FLATS TOTALING TO RS.14.2 LAKHS. HOWEVER, DURING THE COURSE OF ASSESSMENT PROCEEDING S, THE ASSESSING OFFICER (HEREINAFTER REFERRED TO AS THE AO) RELIED ON THE E NQUIRY MADE BY INSPECTOR IN A.Y. 2009-10 WHICH STATED THE FAIR MARKET RENTAL RA TE OF THESE FLATS @ RS.42 PER SQ.FT. PER MONTH AND THUS, DETERMINED ALV AT RS .2.51 CRORE. BEING AGGRIEVED BY THE ABOVE ORDER OF THE AO, ASSESSEE PR EFERRED APPEAL BEFORE THE CIT(A). 4. THE LD. CIT(A) RELIED UPON THE DECISION OF THE H ONBLE BOMBAY HIGH COURT IN THE CASE OF SMITABEN N AMBANI VS CWT 323 ITR 104 AND OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS MON I KUMAR SUBAA 240 CTR 97 (FB) AND HELD THAT WHERE FLATS ARE NOT ACTUA LLY LET OUT, AN APPROPRIATE BASIS FOR THE ALV WOULD BE THE MUNICIPAL RATEABLE V ALUE. FURTHER, THE LD. CIT(A) DIRECTED TO ADD 20% OF THE MUNICIPAL RATABLE VALUE BEING INCREASE IN ALV BY 5% PER YEAR AS BMC HAS NOT REVISED THE MUNIC IPAL RATEABLE VALUE FROM THE YEAR 2006-07. IT IS PERTINENT TO MENTION HERE THAT ONE OF THE CONTENTIONS MADE BEFORE THE LD. CIT(A) WAS THAT THE ASSESSEE HAS BEEN PUTTING ALL HER EFFORTS TO RENT OUT THE PROPERTY, B UT AN APPROPRIATE TENANT WAS NOT FOUND AND HENCE, COULD NOT BE LET OUT. THE ASSE SSEE THUS CONTENDED THAT VACANCY ALLOWANCE U/S.23(1)(C) BE GRANTED AND ALV S HOULD BE TAKEN AS NIL. HOWEVER, THE LD. CIT(A) DISMISSED THIS CONTENTION F OR THE REASON THAT NO EVIDENCE WAS FILED IN SUPPORT OF THE ABOVE CONTENTI ON. ITA NO.3832/M/2014 & ITA NO.3963/M/2014 MRS. RINA VIRENDRA JAIN 3 5. NOW THE CROSS APPEALS HAVE BEEN FILED AGAINST TH E SAID ORDER BEFORE US. THE REVENUE IS AGGRIEVED BY THE ACTION OF THE CIT(A ) IN DIRECTING THE AO TO DETERMINE THE ALV AS PER MUNCIPAL RATEABLE VALUE WI TH FURTHER INCREASE AS NOTED ABOVE AS AGAINST THE VALUE ADOPTED BY THE AO AS PER THE INSPECTORS REPORT. WHEREAS THE ASSESSEE IS AGGRIEVED BY THE EN HANCEMENT OF THE ALV BY THE CIT(A) AS AGAINST SUO-MOTO OFFERED BY THE ASSES SEE. 6. AT THE OUTSET, THE LD. A.R. FOR THE ASSESSEE HAS STATED THAT IN THE CASES OF THE OTHER FAMILY MEMBERS OF THE ASSESSEE, UNDER SIMILAR CIRCUMSTANCES, THE ALV AS PER THE MUNICIPAL RATEABLE VALUE HAS BEEN UP HELD BY THE TRIBUNAL. HE IN THIS RESPECT HAS RELIED UPON THE DECISIONS OF THE TRIBUNAL DATED 17.4.2015 & 2.8.2016 IN THE CASES OF SH. ANAND JAI N FOR AY 2009-10 AND 2010-11 RESPECTIVELY; IN THE CASE OF HARSH JAIN VID E ORDER DATED 17.7.2015 FOR AY 2009-10; IN THE CASE OF LAXMI JAIN DATED 4.2.20 16 FOR AY 2010-11 AND IN THE CASE OF SATYAPAL JAIN DATED 20.1.2016 FOR 20 09-10. HE, HOWEVER, HAS FURTHER BROUGHT OUR ATTENTION TO T HE DECISION OF THE CO- ORDINATE BENCH OF THE TRIBUNAL DATED 12.08.2015 PAS SED IN ITA NO.2116/M/2012 & 2117/M/2012 IN THE CASE OF THE AS SESSEE AND HER HUSBAND, SHRI VIRENDRA JAIN FOR A.Y. 2009-10 AND HA S STATED THAT THE IDENTICAL ISSUE HAS BEEN SET ASIDE VIDE SAID DECISI ON BY THE CO-ORDINATE BENCH OF THE TRIBUNAL WITH A DIRECTION THAT FURTHER ENQUI RY SHOULD BE MADE AS NO SUCH INSPECTOR REPORT WAS AVAILABLE IN THE ORDER IN THE CASE OF OTHER FAMILY MEMBERS' ORDERS WHICH WERE RELIED ON BY THE ASSESS EE DURING THE COURSE OF HEARING. HE HAS FURTHER SUBMITTED THAT SUBSEQUENT TO THIS ORDER, ONE MORE ORDER DATE 15.06.2016 HAS BEEN PASSED IN THE CASE OF SHRI VIRENDRA JAIN HUSBAND OF THE ASSESSEE FOR A.Y. 2010-11, WHEREIN I T WAS BROUGHT TO THE NOTICE OF THIS TRIBUNAL THAT THE REPORT OF THE INSP ECTOR WAS CONSIDERED IN THE CASES OF OTHER FAMILY MEMBERS OF THE ASSESSEE. THE TRIBUNAL, CONSIDERING THE ITA NO.3832/M/2014 & ITA NO.3963/M/2014 MRS. RINA VIRENDRA JAIN 4 ABOVE SUBMISSIONS HAS DIRECTED THE AO TO VERIFY AND CONSIDER THE ABOVE CONTENTIONS OF THE ASSESSEE AND DECIDE THE ISSUE A FRESH AS PER LAW. 7. THE LD. A.R. HAS FURTHER SUBMITTED THAT IT IS AM PLY CLEAR THAT THE FACTS IN THE CASE OF THE FAMILY MEMBERS AND THAT OF THE A SSESSEE ARE IDENTICAL. HE HAS SUBMITTED THAT IN THIS SCENARIO, A DIRECTION BE GIVEN TO THE AO TO VERIFY THE FACTS OF THOSE CASES WITH THAT OF ASSESSEE AND IF THE SAME FOUND IDENTICAL, THEN IT MAY BE DIRECTED THAT NO FURTHER ENQUIRY BE MADE AND THE DECISIONS GIVEN IN THOSE CASES BE APPLIED. THE LD. A.R. HAS MADE AN ALTERNATIVE CONTENTION THAT ALV SHOULD BE TAKEN AT NIL U/S.23( 1)(C) IN VIEW OF PUNE ITAT DECISION IN THE CASE OF VIKAS KESHAV GARUD ( 71 TAXMANN.COM 214) WHEREIN THE TRIBUNAL HAS OBSERVED THAT IF THE INTEN TION TO RENT OUT THE PROPERTY IS PROVED AND THE ASSESSEE TOKK APPROPRIATE EFFORTS TO LET THE PROPERTY BUT DOES NOT SUCCEED, THEN THE ALV IS TO BE TREATED AS NIL U /S 23(1)(C) OF THE ACT. 8. WE HAVE CONSIDERED THE ABOVE SUBMISSIONS. IN THE INSTANT CASE, PROPERTY HAS BEEN LET OUT FROM A.Y. 2015-16. APART FROM THAT, ADDITIONAL EVIDENCES ARE BEING FILED IN THE FORM OF LETTERS FR OM BROKER WHICH STATES THAT THERE WERE CONTINUOUS EFFORTS ON THEIR PART IN FIND ING TENANTS; HOWEVER, DUE TO SOME OF THE WEAKNESS IN LOCATION THEY COULD NOT FIN D A TENANT. APART FROM THAT, AN AFFIDAVIT OF THE ASSESSEE IS ALSO FILED ST ATING THAT THERE HAVE BEEN EFFORTS ON HER PART TO RENT OUT THE PROPERTY BUT SH E COULD NOT GET SUCCESS. APART FROM THAT THE TRIBUNAL VIDE ORDER DATED 15.6.2015 I N THE CASE OF VARINDER JAIN FOR AY 2010-11 HAS RESTORED THE MATTER TO THE FILE OF THE AO WITH A DIRECTION TO THE AO TO CONSIDER THE PLEA OF THE ASSESSEE REGA RDING THE EXISTENCE OF SAME FACTS INCLUDING INSPECTORS REPORT IN THE CASES OF OTHER FAMILY MEMBERS WHOSE ORDERS ARE RELIED ON BY THE ASSESSEE AND DECIDE THE ISSUE AFRESH AS PER LAW. CONSIDERING THE ABOVE POSITION, WE RESTORE THE ISSU E TO THE FILE OF THE AO FOR ADJUDICATION A FRESH WITH A DIRECTION THAT THE AO W ILL CONSIDER ALL THE PLEAS RAISED BY THE ASSESSEE AS DISCUSSED ABOVE THEN TO P ASS A SPEAKING ORDER IN THIS ITA NO.3832/M/2014 & ITA NO.3963/M/2014 MRS. RINA VIRENDRA JAIN 5 RESPECT. NEEDLESS TO SAY THAT THE AO WILL GIVE PROP ER OPPORTUNITY TO THE ASSESSEE TO PRESENT HER CASE. 9. IN THE RESULT BOTH THE CROSS APPEALS I.E.ONE BY THE REVENUE AND THE OTHER BY THE ASSESSEE ARE TREATED AS ALLOWED FOR STATISTI CAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 14.12.2016. SD/- SD/- (ASHWANI TANEJA) (SANJAY GARG) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED: 14.12.2016. * KISHORE, SR. P.S. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT (A) CONCERNED, MUMBAI THE DR CONCERNED BENCH //TRUE COPY// [ BY ORD ER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.