SUMAN GUPTA, MUMBAI V. DCIT - CC- 4(2), MUMBAI

ITA 3860/MUM/2018

AI Insights

The case involves appeals by Smt. Suman Gupta against the orders of the Commissioner of Income-tax (Appeals)-52, Mumbai, concerning the assessment years 2014-15 and 2015-16. The appeals were consolidated due to common grounds. The primary issues revolved around the additions made for deemed rental income and undisclosed jewellery found during a search operation under section 132(1) of the Income Tax Act, 1961. The Tribunal examined the legality of the additions made by the Assessing Officer and upheld by the CIT(A), particularly focusing on the declarations made during the search and the wealth tax returns filed prior to the search.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 123584 (ITAT-MUMBAI)
• Duration Of Justice: 4 year(s) 10 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-04-2023
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Next Hearing Date: 01-03-2023
• Assessment Year: 2014-2015
• Appeal Filed On: 30-05-2018
• Other Referred Cases: National Thermal Power Corporation v. CIT, CIT v. Prabhabati Bansali, M/s Radha Devi Dalmia v. CIT, Sonavala V CIT, ITO V/s Makrupa Chemicals (P) Ltd
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Assessee Lawyers: VIJAY BHATT
• Keywords: Deemed owner of house property; Depreciation; Search and seizure; Opportunity of being heard; Additional evidence; Competent authority
• Section: 143(3); 153A; 143(2); 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “G” MUMBAI BEFORE SHRI KULDIP SINGH (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA Nos. 3860 & 3859/MUM/2018 Assessment Years: 2014-15 & 2015-16 Smt. Suman Gupta, 6 th New Harileela House, Mint Road, Fort, Mumbai-400 001. Vs. Dy. CIT CC-4(2), Air India Building, 19 th floor, Room No. 1918, Nariman Point, Mumbai-21. PAN No. AHQPG 0220 P Appellant Respondent Assessee by : Mr. Bhupendra Karkhanis & Mr. Aakash Marthak & Mr. Vijay Bhatt, ARs Revenue by : Dr. Kishor Dhule, CIT-DR Date of Hearing : 02/03/2023 Date of pronouncement : 27/04/2023 ORDER PER OM PRAKASH KANT, AM These appeals by the assessee are directed against two separate orders, both dated 21.03.2018, passed by the Ld. Commissioner of Income-tax (Appeals)-52, Mumbai [in short ‘the Ld. CIT(A)’] for assessment year 2015-16 and 2014-15 respectively. As common grounds are involved in these appeals ,therefore same were heard together and disposed off by way of this consolidated order for convenience. 2. Briefly stated facts of the case are that a search and seizure action u/s 132(1) of the Income was carried out at the premises of M/s ‘Ushdev Group’ notice u/s 153A were issued in respect of relevant assessment years including the assessment year 2014 assessment year 2015 u/s 143(2) of the Act was issued. assessment year 2014 deemed rental income from properties owned by the assessee. In assessment year 2015 rental value in respect of properties owned and occupied by the assessee. For the assessment year 2015 return of income declared unexplained jewellery of Rs.42,37,838/ found during the course of search, proceedings, the assessee submitted that jewellery was already declared in the return of wealth tax filed by the family members and therefore, undisclosed income against jeweller declared by the assessee reduced while assessment ITA Nos. 3860 & 3859/M/2018 were heard together and disposed off by way of this consolidated order for convenience. Briefly stated facts of the case are that a search and seizure action u/s 132(1) of the Income-tax Act, 1961 (in short ‘the Act’) was carried out at the premises of the assessee along with cases of ’ on 11.09.2014. Consequent to search action notice u/s 153A were issued in respect of relevant assessment the assessment year 2014-15 assessment year 2015-16 being part of the year of u/s 143(2) of the Act was issued. The Assessing Officer in assessment year 2014-15 made addition of Rs.28,64,288/ deemed rental income from properties owned by the assessee. In assessment year 2015-16, he repeated the addition for deemed rental value in respect of properties owned and occupied by the assessment year 2015-16, the assessee in the return of income declared undisclosed income in the form of jewellery of Rs.42,37,838/- and cash of Rs.4,98,000/ found during the course of search, however during assessment proceedings, the assessee submitted that jewellery was already declared in the return of wealth tax filed by the family members and therefore, undisclosed income against jewellery declared by the assessee, therefore, income to that extent should be while assessment. However, this claim of the assessee was Smt. Suman Gupta 2 ITA Nos. 3860 & 3859/M/2018 were heard together and disposed off by way of this consolidated Briefly stated facts of the case are that a search and seizure tax Act, 1961 (in short ‘the Act’) the assessee along with cases of onsequent to search action notice u/s 153A were issued in respect of relevant assessment 15, whereas in year of search, notice The Assessing Officer in 15 made addition of Rs.28,64,288/- for deemed rental income from properties owned by the assessee. In addition for deemed rental value in respect of properties owned and occupied by the 16, the assessee in the undisclosed income in the form of of Rs.4,98,000/- however during assessment proceedings, the assessee submitted that jewellery was already declared in the return of wealth tax filed by the family members and y was wrongly herefore, income to that extent should be . However, this claim of the assessee was not accepted by the Assessing Officer. On further appeal, assessment year 2015 assessee in relation to jewellery and deemed rental value assessment year 2014 value has been sustained by the Ld. CIT(A). 2.1 First we take up the appeal of the assessee for assessment year 2015-16. The relevant ground under: 1(a). On the facts and in the circumstances of the case and in law, the Id. CIT (A)erred in confirming addition of Rs. 42,37,838/ time of search that the said jewelleries were already disclosed in the return of wealth tax filed forAY 2014 ie prior to date of search and therefore question of making addition does not arise, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. 1(b). On the facts and in the circumstances of the case and in law, the Id. CIT (A)erred in confirming addition of Rs. 42,37,838/ time of search proceedings on reasoning that appellant agreed to offer the said amount to tax at the time of search without appreciating the fact that due to paucity of time for reconciliation of jewelleries found du search with return of wealth tax, appellant agreed to offer the said jewelleries to tax at the time search, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there un ITA Nos. 3860 & 3859/M/2018 not accepted by the Assessing Officer. On further appeal, assessment year 2015-16, the Ld. CIT(A) rejected the claim of the assessee in relation to jewellery and deemed rental value assessment year 2014-15 also the addition of the deemed rental value has been sustained by the Ld. CIT(A). First we take up the appeal of the assessee for assessment 16. The relevant grounds of appeal are reproduced as 1(a). On the facts and in the circumstances of the case and in law, the Id. CIT (A)erred in confirming addition of Rs. 42,37,838/- in respect of jewelleries found at the time of search proceedings without appreciating the fact that the said jewelleries were already disclosed in the return of wealth tax filed forAY 2014-15 on 31/07/2014 ie prior to date of search and therefore question of making addition does not arise, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made 1(b). On the facts and in the circumstances of the case and in law, the Id. CIT (A)erred in confirming addition of Rs. 42,37,838/- in respect of jewelleries found at the time of search proceedings on reasoning that appellant agreed to offer the said amount to tax at the time of search without appreciating the fact that due to paucity of time for reconciliation of jewelleries found during the search with return of wealth tax, appellant agreed to offer the said jewelleries to tax at the time search, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. Smt. Suman Gupta 3 ITA Nos. 3860 & 3859/M/2018 not accepted by the Assessing Officer. On further appeal, in ed the claim of the assessee in relation to jewellery and deemed rental value. In 15 also the addition of the deemed rental First we take up the appeal of the assessee for assessment of appeal are reproduced as 1(a). On the facts and in the circumstances of the case and in law, the Id. CIT (A)erred in confirming addition of in respect of jewelleries found at the proceedings without appreciating the fact that the said jewelleries were already disclosed in the 15 on 31/07/2014 ie prior to date of search and therefore question of making addition does not arise, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made 1(b). On the facts and in the circumstances of the case and in law, the Id. CIT (A)erred in confirming addition of in respect of jewelleries found at the time of search proceedings on reasoning that appellant agreed to offer the said amount to tax at the time of search without appreciating the fact that due to paucity ring the search with return of wealth tax, appellant agreed to offer the said jewelleries to tax at the time search, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the 1(c). On the facts and in the circumstances of the case and in law, the Id. CIT (A)ought to have accepted the contention of the appellant to the effect that said jewelleries were disclosed in the return of wealth tax filed before date of search though offered the same in return of income filed u/s 153A, in the light of; (i) the proposition laid down in National Thermal Power Corporation v.CIT 229 ITR 383 (SC); and (ii) the principles laid down in Circular No. 14 (XL dated 11.4.1955 ofthe CBDT. 1(d). On the facts and in the circumstances of the case and in law, the lower authorities failed to appreciate that addition of Rs. 42,37,838/ found in search would lead to double taxation as appellant had alr Return of wealth tax, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. 2. On the facts and in the circumstances of the cas in law, the CIT(A) erred in making addition u/s. 23 in the impugned order u/s 143(3) r.w.s.153A of the Income Tax Act, 1961 without appreciating the fact that no incriminating material was found during the course of search proceedings in respect of s wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. 3(a). Without prejudice to above, on the facts and in the circumstances of the case and in law, t erred in confirming the addition of Rs. 4,08,663/ "Income from deemed let out property" located at Apeejay House and Pune by applying a rate of 7% of cost of property of Rs. 1,44,09,475/ 6,00,000/- assigned for doing so are wrong and contrary to the facts ITA Nos. 3860 & 3859/M/2018 1(c). On the facts and in the circumstances of the case and in law, the Id. CIT (A)ought to have accepted the contention of the appellant to the effect that said jewelleries were disclosed in the return of wealth tax filed before date of search though inadvertently appellant offered the same in return of income filed u/s 153A, in the proposition laid down in National Thermal Power Corporation v.CIT 229 ITR 383 (SC); and (ii) the principles laid down in Circular No. 14 (XL .4.1955 ofthe CBDT. 1(d). On the facts and in the circumstances of the case and in law, the lower authorities failed to appreciate that addition of Rs. 42,37,838/- in respect of jewelleries found in search would lead to double taxation as appellant had already disclosed the said jewelleries in Return of wealth tax, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. On the facts and in the circumstances of the cas in law, the CIT(A) erred in making addition u/s. 23 in the impugned order u/s 143(3) r.w.s.153A of the Income Tax Act, 1961 without appreciating the fact that no incriminating material was found during the course of search proceedings in respect of said additions, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. 3(a). Without prejudice to above, on the facts and in the circumstances of the case and in law, the Id. CIT (A) erred in confirming the addition of Rs. 4,08,663/ "Income from deemed let out property" located at Apeejay House and Pune by applying a rate of 7% of cost of property of Rs. 1,44,09,475/- i.e.Rs. 10,08.663/- offered by the appellant and reasons assigned for doing so are wrong and contrary to the facts Smt. Suman Gupta 4 ITA Nos. 3860 & 3859/M/2018 1(c). On the facts and in the circumstances of the case and in law, the Id. CIT (A)ought to have accepted the contention of the appellant to the effect that said jewelleries were disclosed in the return of wealth tax inadvertently appellant offered the same in return of income filed u/s 153A, in the proposition laid down in National Thermal Power (ii) the principles laid down in Circular No. 14 (XL-35) 1(d). On the facts and in the circumstances of the case and in law, the lower authorities failed to appreciate that in respect of jewelleries found in search would lead to double taxation as eady disclosed the said jewelleries in Return of wealth tax, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. On the facts and in the circumstances of the case and in law, the CIT(A) erred in making addition u/s. 23 in the impugned order u/s 143(3) r.w.s.153A of the Income Tax Act, 1961 without appreciating the fact that no incriminating material was found during the course of aid additions, which is wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the 3(a). Without prejudice to above, on the facts and in the he Id. CIT (A) erred in confirming the addition of Rs. 4,08,663/-being "Income from deemed let out property" located at Apeejay House and Pune by applying a rate of 7% of cost of less Rs. by the appellant and reasons assigned for doing so are wrong and contrary to the facts and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. 3(b). Without prejudice to above, on the facts and in the circumstances of the case and in law, the Id. CIT (A) failed to appreciate that the Annual value of the deemed let out properties should be considered based on municipal ratable value fixed by municipal authorities in terms of section 23(1) of the Act and not as the properties, which is wrong and contrary to the facts of the case and provisions of the Income Tax Act, 1961 and the rules made thereunder. 3(c). Without prejudice to above, on the facts and in the circumstances of the case and in law, the authorities erred in computing deemed notional rent on the property located at Apeejay House by considering it as non businessproperty as no depreciation was claimed on the said business premises in its return of income filed by the appellant, which Facts of the case and provisions of the Income Tax Act, 1961 and the rules made thereunder. 3. In ground No. 1 of the appeal, the assessee is aggrieved with the rejection of the claim in respect of jewellery of Rs.42,37,838/ 4. The brief facts qua the issue of search proceedings and were found in the hands of the various family members of the assessee group. In the course of statement recorded u/s 132(4) of the Act on 08.10.2014, the assessee declared jewellery of Rs.42,37,838/- and cash of Rs.4,98,000/ which was stated by the assessee as received on various occasions from relative and friends during the current financial year and ITA Nos. 3860 & 3859/M/2018 and circumstances of the case, the provisions of Income Tax Act, 1961, and the Rules made there under. 3(b). Without prejudice to above, on the facts and in the tances of the case and in law, the Id. CIT (A) failed to appreciate that the Annual value of the deemed let out properties should be considered based on municipal ratable value fixed by municipal authorities in terms of section 23(1) of the Act and not as 7% of cost of the properties, which is wrong and contrary to the facts of the case and provisions of the Income Tax Act, 1961 and the rules made thereunder. 3(c). Without prejudice to above, on the facts and in the circumstances of the case and in law, the authorities erred in computing deemed notional rent on the property located at Apeejay House by considering it as non businessproperty as no depreciation was claimed on the said business premises in its return of income filed by the appellant, which is wrong and contrary to the Facts of the case and provisions of the Income Tax Act, 1961 and the rules made thereunder. In ground No. 1 of the appeal, the assessee is aggrieved with the rejection of the claim in respect of jewellery of Rs.42,37,838/ The brief facts qua the issue-in-dispute are that in the course of search proceedings, Gold, Silver and gold & diamond jewellery and were found in the hands of the various family members of the assessee group. In the course of statement recorded u/s 132(4) of the Act on 08.10.2014, the assessee declared jewellery of and cash of Rs.4,98,000/- as undisclosed income ch was stated by the assessee as received on various occasions from relative and friends during the current financial year and Smt. Suman Gupta 5 ITA Nos. 3860 & 3859/M/2018 and circumstances of the case, the provisions of Income 3(b). Without prejudice to above, on the facts and in the tances of the case and in law, the Id. CIT (A) failed to appreciate that the Annual value of the deemed let out properties should be considered based on municipal ratable value fixed by municipal authorities in 7% of cost of the properties, which is wrong and contrary to the facts of the case and provisions of the Income Tax Act, 1961 3(c). Without prejudice to above, on the facts and in the circumstances of the case and in law, the lower authorities erred in computing deemed notional rent on the property located at Apeejay House by considering it as non businessproperty as no depreciation was claimed on the said business premises in its return of income filed is wrong and contrary to the Facts of the case and provisions of the Income Tax Act, In ground No. 1 of the appeal, the assessee is aggrieved with the rejection of the claim in respect of jewellery of Rs.42,37,838/-. dispute are that in the course & diamond jewellery and were found in the hands of the various family members of the assessee group. In the course of statement recorded u/s 132(4) of the Act on 08.10.2014, the assessee declared jewellery of as undisclosed income ch was stated by the assessee as received on various occasions from relative and friends during the current financial year and, accordingly in the return of income filed for the year under consideration the assessee declared the undisclosed income corresponding to jewellery of Rs.42,37,838/ Rs.4,98,000/-. During the course of assessment proceedings, the assessee contended that jewellery and silver found in the hands of the family members was already shown in the wealth tax return of the family members but the time of the search proceedings, the jewellery was offered to tax while recording the s the jewellery declared in wealth tax return jewellery found in the course of the search. The Assessing Officer rejected the contention of the assessee observing as under: “7. During the assessment proce submitted the details of Jewelleries and silver found in hands of various fa search and explanation regarding the items shown in the wealth tax returns of the family m also submitted wealth tax returns of the family members. As regards Jewelleries seized of Rs. 12,37,838/ assessee submitted that due to lack of sufficient time to reconcile at amount of jewellery of Rs. 42,37,838 was offered to lax while recording the statement under section 132|4) of the IT Act but if can be appreciated th more Jewelleries in the returns then those were found in the course of the search.Though while filing the return of income the items were tallied but i with tho Departme in the statement made under section this amount of jewellery is offered to ITA Nos. 3860 & 3859/M/2018 accordingly in the return of income filed for the year under consideration the assessee declared the undisclosed income nding to jewellery of Rs.42,37,838/- . During the course of assessment proceedings, the assessee contended that jewellery and silver found in the hands of the family members was already shown in the wealth tax return of but due to lack of sufficient time to reconcile at the time of the search proceedings, the jewellery was offered to tax while recording the statement u/s 132(4) of the Act. But in the jewellery declared in wealth tax return is more than th jewellery found in the course of the search. The Assessing Officer rejected the contention of the assessee observing as under: 7. During the assessment proceeding. the assessee submitted the details of Jewelleries and silver found in hands of various family members during the course of search and explanation regarding the items shown in the wealth tax returns of the family members. The assesses ted wealth tax returns of the family members. As regards Jewelleries seized of Rs. 12,37,838/ ssee submitted that due to lack of sufficient time to the time of the search proceedings. the amount of jewellery of Rs. 42,37,838 was offered to lax while recording the statement under section 132|4) of the t but if can be appreciated that there were already more Jewelleries in the returns then those were found in the course of the search.Though while filing the return of income the items were tallied but in order to coopcrate with tho Department and since the disclosure was ement made under section 132(4) of the IT Act, this amount of jewellery is offered to tax. Smt. Suman Gupta 6 ITA Nos. 3860 & 3859/M/2018 accordingly in the return of income filed for the year under consideration the assessee declared the undisclosed income and cash of . During the course of assessment proceedings, the assessee contended that jewellery and silver found in the hands of the family members was already shown in the wealth tax return of due to lack of sufficient time to reconcile at the time of the search proceedings, the jewellery was offered to tax tatement u/s 132(4) of the Act. But in reality, s more than the jewellery found in the course of the search. The Assessing Officer rejected the contention of the assessee observing as under: he assessee submitted the details of Jewelleries and silver found in mily members during the course of search and explanation regarding the items shown in the embers. The assesses ted wealth tax returns of the family members. As regards Jewelleries seized of Rs. 12,37,838/-, ssee submitted that due to lack of sufficient time to the time of the search proceedings. the amount of jewellery of Rs. 42,37,838 was offered to lax while recording the statement under section 132|4) of the at there were already more Jewelleries in the returns then those were found in the course of the search.Though while filing the return of n order to coopcrate the disclosure was made he IT Act, 7.2. The submission of the assessee is considered but not accepted. The assessee herself confessed in the statement recorded on oath us. 132(4) of the It Act that she has received the above income during various occasion from relatives and friends and she these incomes while filing return of income. Hence, the said addition made by the assessee herself cannot be withdrawn. Since the assessee herself ha addition in her return of income, no further addition is made.” 5. On further appeal, the Ld. CIT(A) rejected the contention of the assessee observing as under: “6.1 I have considered the submissions and contentions of the assessee as also that on the excess jewellery found at the time of search action, the assessee made a declaration of undisclosed income of Rs 42,37,838/ 132(4). The assessee in her return of income filed for relevant year pursuant to the search action also included the said declaration of Rs 42,37,838/ the assessment proceedings, the assessee submitted that though reconciliation could not be given at the time of thesearch action, she has reconcile the difference and requested the AO to allow withdrawal of the said undisclosed income included in the Return of Income for the relevant ear. However, the AO did not allow this request of the assesses on the ground that t of search action and she herself had also included the amount of the said declaration made in the return of income filed for the relevant year pursuant to the search action. 6.2 In the appellate proceedinas also similar claims as made before the AO. It is observed that there is no dispute that the jewellery found at the time of search action could not be reconciled by the assessee and therefore, an admission of undisclosed income of Rs ITA Nos. 3860 & 3859/M/2018 7.2. The submission of the assessee is considered but not accepted. The assessee herself confessed in the statement recorded on oath us. 132(4) of the It Act that she has received the above income during various occasion from relatives and friends and she also offered these incomes while filing return of income. Hence, the said addition made by the assessee herself cannot be withdrawn. Since the assessee herself has declared such addition in her return of income, no further addition is On further appeal, the Ld. CIT(A) rejected the contention of the assessee observing as under: 6.1 I have considered the submissions and contentions of the assessee as also the order of the AO. It is observed that on the excess jewellery found at the time of search action, the assessee made a declaration of undisclosed income of Rs 42,37,838/- in the statement on oath u/s 132(4). The assessee in her return of income filed for relevant year pursuant to the search action also included the said declaration of Rs 42,37,838/-. However, during the assessment proceedings, the assessee submitted that though reconciliation could not be given at the time of thesearch action, she has subsequently managed to reconcile the difference and requested the AO to allow withdrawal of the said undisclosed income included in the Return of Income for the relevant ear. However, the AO did not allow this request of the assesses on the ground that the same could not be reconciled at the time of search action and she herself had also included the amount of the said declaration made in the return of income filed for the relevant year pursuant to the search 6.2 In the appellate proceedinas also the assessee made similar claims as made before the AO. It is observed that there is no dispute that the jewellery found at the time of search action could not be reconciled by the assessee and therefore, an admission of undisclosed income of Rs Smt. Suman Gupta 7 ITA Nos. 3860 & 3859/M/2018 7.2. The submission of the assessee is considered but not accepted. The assessee herself confessed in the statement recorded on oath us. 132(4) of the It Act that she has received the above income during various also offered these incomes while filing return of income. Hence, the said addition made by the assessee herself cannot be s declared such addition in her return of income, no further addition is On further appeal, the Ld. CIT(A) rejected the contention of the 6.1 I have considered the submissions and contentions the order of the AO. It is observed that on the excess jewellery found at the time of search action, the assessee made a declaration of undisclosed in the statement on oath u/s 132(4). The assessee in her return of income filed for the relevant year pursuant to the search action also included . However, during the assessment proceedings, the assessee submitted that though reconciliation could not be given at the time of subsequently managed to reconcile the difference and requested the AO to allow withdrawal of the said undisclosed income included in the Return of Income for the relevant ear. However, the AO did not allow this request of the assesses on the he same could not be reconciled at the time of search action and she herself had also included the amount of the said declaration made in the return of income filed for the relevant year pursuant to the search the assessee made similar claims as made before the AO. It is observed that there is no dispute that the jewellery found at the time of search action could not be reconciled by the assessee and therefore, an admission of undisclosed income of Rs 42,37,838/- 132(4) and this declaration was also included in the return of income forthe relevant year filed pursuant to the search action. Therefore, the AO has rightly rejected the request of the assessee to be allowed to withd amount of undisclosed income of Rs 42.37.338/ was surrendered in statement on oath us 132(4) during the search action and also voluntarily included in her return of income for the relevant year filed pursuant to the search action. Accordingl dismissed.” 6. Before us, the Ld. Counsel of the assessee has filed a book containing pages 1 to 59. The pages 38 to 59 are copy of the wealth tax return filed for assessment year 2014 Suman Gupta i.e. the assessee, (ii) Natasha Gupta, (iii) Ginni Gupta and (iv) Prateek Gupta. Before us, the application for admitting th assessee and her relative the ITAT Rules, 1963. T Paper Book page No. 12 and submitted that quantity of ‘gold’ jewellery found during the course of search from the assessee and her family members is less than the jewellery declared by th assessee and her family members in the wealth tax return Regarding the diamond diamond and precious stone declared in the wealth tax return is more than the value of the diamond and the precious stone foun during the course of the members. The Ld. Counsel accordingly submitted that additional ITA Nos. 3860 & 3859/M/2018 was made in the statement on oath us 132(4) and this declaration was also included in the return of income forthe relevant year filed pursuant to the search action. Therefore, the AO has rightly rejected the request of the assessee to be allowed to withdraw the amount of undisclosed income of Rs 42.37.338/ was surrendered in statement on oath us 132(4) during the search action and also voluntarily included in her return of income for the relevant year filed pursuant to the search action. Accordingly, this Ground of Appeal is Before us, the Ld. Counsel of the assessee has filed a ook containing pages 1 to 59. The pages 38 to 59 are copy of the wealth tax return filed for assessment year 2014-15 in the case of (i) . the assessee, (ii) Natasha Gupta, (iii) Ginni Gupta and (iv) Prateek Gupta. Before us, the assessee has filed an application for admitting those wealth tax return her relatives as additional evidence under Rule 29 of 1963. The Ld. Counsel of the assessee referred to Paper Book page No. 12 and submitted that quantity of found during the course of search from the assessee and her family members is less than the jewellery declared by th assessee and her family members in the wealth tax return ding the diamond also, it was submitted that value of the diamond and precious stone declared in the wealth tax return is more than the value of the diamond and the precious stone foun during the course of the search from the assessee and her family members. The Ld. Counsel accordingly submitted that additional Smt. Suman Gupta 8 ITA Nos. 3860 & 3859/M/2018 was made in the statement on oath us 132(4) and this declaration was also included in the return of income forthe relevant year filed pursuant to the search action. Therefore, the AO has rightly rejected the raw the amount of undisclosed income of Rs 42.37.338/- which was surrendered in statement on oath us 132(4) during the search action and also voluntarily included in her return of income for the relevant year filed pursuant to y, this Ground of Appeal is Before us, the Ld. Counsel of the assessee has filed a paper ook containing pages 1 to 59. The pages 38 to 59 are copy of the 15 in the case of (i) . the assessee, (ii) Natasha Gupta, (iii) Ginni Gupta assessee has filed an se wealth tax returns filed by the as additional evidence under Rule 29 of he Ld. Counsel of the assessee referred to Paper Book page No. 12 and submitted that quantity of ‘silver’ and found during the course of search from the assessee and her family members is less than the jewellery declared by the assessee and her family members in the wealth tax returns filed. that value of the diamond and precious stone declared in the wealth tax return is more than the value of the diamond and the precious stone found assessee and her family members. The Ld. Counsel accordingly submitted that additional evidences filed by the assessee might be admitted and issue of reconciliation of the jewellery found along with jewellery decl the wealth tax return may be restored back to the file of the Assessing Officer. 7. The Ld. Departmental Representative (DR) on the other hand opposed the request of the assessee and submitted that the claim of the assessee has been rejected by th failure on the part of the assessee jewellery declared in the wealth tax return along with items of the jewellery found, during the course of the search action. he submitted that the Ld. CIT(A) has correctly rejected the claim of the assessee. 8. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. during the course of the search in statem offered the jewellery amounting to Rs.42,37,838/ cash of Rs.4,98,000/ search action from the various lockers of the assessee and its family members. It was submitted by th reconciliation of the jewellery same was offered while recording the statement u/s 132(4) of the Act however actually the said jewellery stand declared in the wealth tax returned filed by the assessee and her family members/relat ITA Nos. 3860 & 3859/M/2018 filed by the assessee might be admitted and issue of reconciliation of the jewellery found along with jewellery decl the wealth tax return may be restored back to the file of the The Ld. Departmental Representative (DR) on the other hand opposed the request of the assessee and submitted that the claim of the assessee has been rejected by the Assessing Officer due to failure on the part of the assessee in reconciling the items of the jewellery declared in the wealth tax return along with items of the during the course of the search action. he submitted that the Ld. CIT(A) has correctly rejected the claim of We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. during the course of the search in statement u/s 132(4) of the Act offered the jewellery amounting to Rs.42,37,838/- cash of Rs.4,98,000/-, which was found during the course of the from the various lockers of the assessee and its family members. It was submitted by the assessee that due to non reconciliation of the jewellery same was offered while recording the statement u/s 132(4) of the Act however actually the said jewellery stand declared in the wealth tax returned filed by the assessee and her family members/relatives prior to search action Smt. Suman Gupta 9 ITA Nos. 3860 & 3859/M/2018 filed by the assessee might be admitted and issue of reconciliation of the jewellery found along with jewellery declared in the wealth tax return may be restored back to the file of the The Ld. Departmental Representative (DR) on the other hand opposed the request of the assessee and submitted that the claim of e Assessing Officer due to the items of the jewellery declared in the wealth tax return along with items of the during the course of the search action. Accordingly, he submitted that the Ld. CIT(A) has correctly rejected the claim of We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. The assessee ent u/s 132(4) of the Act along with the during the course of the from the various lockers of the assessee and its family e assessee that due to non- reconciliation of the jewellery same was offered while recording the statement u/s 132(4) of the Act however actually the said jewellery stand declared in the wealth tax returned filed by the assessee and prior to search action. It was further submitted that same was filed in the view of the disclosure made the assessee during search action. During the assessment proceedings, the assessee submitted before the Assessing withdrawal of the undisclosed income declared against jewellery. However, the Assessing Officer rejected the ground that the assessee herself confessed the jewellery as unexplained recorded u/s 132(4) of the Act and also declared in the return of income filed. declared in return of income can’t be rolled back except by way of revising the return of income. the issue before us is return of income, whether option for the assessee to claim revising the return of income. from the decision of the Hon’ble Supreme Court in v/s CIT, [2006] 284 ITR 323(SC) Jurisdictional High Court in Shareholders Pvt. Ltd., [2012] 349 ITR 336 (Bom appellate authority certainly has power and jurisdiction to entertain a fresh claim of the assessee otherwise then by way of revised return of income if the relevant fact for deciding such issue are available on record. ITA Nos. 3860 & 3859/M/2018 same was declared the same in the return of income in the view of the disclosure made the assessee during search . During the assessment proceedings, the assessee submitted ssessing Officer, a reconciliation chart for withdrawal of the undisclosed income declared against jewellery. However, the Assessing Officer rejected the claim of the assessee the ground that the assessee herself confessed the jewellery as explained recorded u/s 132(4) of the Act and also declared in the return of income filed. According to the Assessing Officer, income declared in return of income can’t be rolled back except by way of revising the return of income. In view of the above fact the issue before us is that once income has been declared in the whether it becomes irreversible or is there any assessee to claim for refund of the same without revising the return of income. The settled legal position as emerges from the decision of the Hon’ble Supreme Court in Goetz India Ltd. v/s CIT, [2006] 284 ITR 323(SC) and the decision of the Hon’ble Jurisdictional High Court in CIT v/s Pruthvi Brokers and Shareholders Pvt. Ltd., [2012] 349 ITR 336 (Bom appellate authority certainly has power and jurisdiction to entertain a fresh claim of the assessee otherwise then by way of revised return of income if the relevant fact for deciding such issue are Smt. Suman Gupta 10 ITA Nos. 3860 & 3859/M/2018 declared the same in the return of income in the view of the disclosure made the assessee during search . During the assessment proceedings, the assessee submitted reconciliation chart for permitting withdrawal of the undisclosed income declared against jewellery. the claim of the assessee on the ground that the assessee herself confessed the jewellery as explained recorded u/s 132(4) of the Act and also declared in the According to the Assessing Officer, income declared in return of income can’t be rolled back except by way of In view of the above facts and ground once income has been declared in the it becomes irreversible or is there any for refund of the same without position as emerges Goetz India Ltd. and the decision of the Hon’ble CIT v/s Pruthvi Brokers and Shareholders Pvt. Ltd., [2012] 349 ITR 336 (Bom.) is that the appellate authority certainly has power and jurisdiction to entertain a fresh claim of the assessee otherwise then by way of revised return of income if the relevant fact for deciding such issue are 8.1 We find that in the case of the the assessee could not reconcile and it was declared in the return of income evidence supports the view that the jewellery found during the course of the search declared in the return of wealth tax filed prior to the date of the search, then the claim of the assessee cannot be dismissed merely for the reason that same was offered in the statement u/s 132(4 the Act and declared in the return of income filed. cannot collect the tax amount which is not as per law. The appellate authority was expected to quasi-judicial authority and circumstances during the course of search action possible on the part of the assessee to admit the jewellery as unexplained without reconciliation, though it was duly declared in wealth tax returns. The article 265 of the constitution also mandates that no taxes can be collected otherwise then authority of law. In the case, the Assessing officer has no authority to treat the jewellery as unexplained if same is already declared in wealth tax returns filed prior to the date of search. circumstances of the case, we feel it appropriate to admit wealth tax filed by the assessee and additional evidence. CIT(A) on the issue in dispute and ITA Nos. 3860 & 3859/M/2018 n the case of the assessee, due to lack of time the assessee could not reconcile during the course of search action and it was declared in the return of income. However evidence supports the view that the jewellery found during the of the search action stand reconciled by way of jewellery declared in the return of wealth tax filed prior to the date of the then the claim of the assessee cannot be dismissed merely for the reason that same was offered in the statement u/s 132(4 the Act and declared in the return of income filed. The government cannot collect the tax amount which is not as per law. The was expected to consider the claim authority and take into consideration the circumstances during the course of search action possible on the part of the assessee to admit the jewellery as unexplained without reconciliation, though it was duly declared in . The article 265 of the constitution also mandates that no taxes can be collected otherwise then authority of In the case, the Assessing officer has no authority to treat the jewellery as unexplained if same is already declared in wealth tax returns filed prior to the date of search. In the f circumstances of the case, we feel it appropriate to admit wealth tax filed by the assessee and her family . Accordingly, we set-aside the finding of ld CIT(A) on the issue in dispute and restore the matter back to the file Smt. Suman Gupta 11 ITA Nos. 3860 & 3859/M/2018 due to lack of time, during the course of search action owever, later on if the evidence supports the view that the jewellery found during the by way of jewellery declared in the return of wealth tax filed prior to the date of the then the claim of the assessee cannot be dismissed merely for the reason that same was offered in the statement u/s 132(4) of The government cannot collect the tax amount which is not as per law. The fist consider the claim being an take into consideration the circumstances during the course of search action, where it was possible on the part of the assessee to admit the jewellery as unexplained without reconciliation, though it was duly declared in . The article 265 of the constitution also mandates that no taxes can be collected otherwise then authority of In the case, the Assessing officer has no authority to treat the jewellery as unexplained if same is already declared in wealth tax In the facts and circumstances of the case, we feel it appropriate to admit returns of her family members as aside the finding of ld restore the matter back to the file of the Ld. Assessing Officer for verifying whether the items of the jewellery/gold/silver found during the course of the search tally with the items of gold/ and her family members in the return of wealth tax filed prior to the date of the search, and then decide law. It is needless to mention that the assessee shall afforded adequate opportunity of being heard. In the result, the ground of the appeal is accordingly allowed for statistical purposes. 9. In the ground No. 2, the assessee has submitted that no incriminating material was found during the course of search and therefore, addition made is contrary to the provisions of the Act. 10. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. The Hon’ble Bombay High Court in the case of Corporation 374 ITR 645 (Bom) assessment no addition could have been made incriminating material found during the course of the search. We find that both the year under consideration 2014-15 are abated assessments and therefore ratio of the said decision does not apply over the facts of the case for both the assessment years. Accordingly, ground No. 2 of the appeal of the assessee is dismissed. ITA Nos. 3860 & 3859/M/2018 of the Ld. Assessing Officer for verifying whether the items of the jewellery/gold/silver found during the course of the search tally gold/silver, jewellery etc. declared by the assessee members in the return of wealth tax filed prior to the , and then decide the issue in accordance with It is needless to mention that the assessee shall afforded opportunity of being heard. In the result, the ground is accordingly allowed for statistical purposes. In the ground No. 2, the assessee has submitted that no incriminating material was found during the course of search and therefore, addition made is contrary to the provisions of the Act. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. The Hon’ble Bombay High Court in the case of Continental Warehousing Corporation 374 ITR 645 (Bom)held that in case of unabated no addition could have been made except incriminating material found during the course of the search. We find that both the year under consideration i.e AY 2015 are abated assessments and therefore ratio of the said oes not apply over the facts of the case for both the assessment years. Accordingly, ground No. 2 of the appeal of the assessee is dismissed. Smt. Suman Gupta 12 ITA Nos. 3860 & 3859/M/2018 of the Ld. Assessing Officer for verifying whether the items of the jewellery/gold/silver found during the course of the search tally etc. declared by the assessee members in the return of wealth tax filed prior to the in accordance with It is needless to mention that the assessee shall afforded opportunity of being heard. In the result, the ground No. 1 is accordingly allowed for statistical purposes. In the ground No. 2, the assessee has submitted that no incriminating material was found during the course of search and therefore, addition made is contrary to the provisions of the Act. We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. The Hon’ble Continental Warehousing held that in case of unabated except the aid of the incriminating material found during the course of the search. We i.e AY 2015-16 and are abated assessments and therefore ratio of the said oes not apply over the facts of the case for both the assessment years. Accordingly, ground No. 2 of the appeal of the 11. In ground No. 3, the assessee is aggrieved with the deemed rental value assessed by the Assessing Officer whi upheld by the Ld. CIT(A). 12. The brief facts qua the issue owned following properties: Flat at Brighton Office premises at Appejay House Propety at Lavassa 92 Property at lavassa 94 Property at Alibaug Flat at Pune 50% share in Sakinaka Property 12.1 The assessee offered income from house property from various properties at Rs.6,00,000/ estimated the deemed rent on the property @ 7% of the value of the property as ‘income from house property the Hon’ble Allahabad High Court in the case of Dalmia v. CIT 125 ITR 134 (All) deemed by the Assessing Officer is as under: Office premises at Appejay House Propety at Lavassa 92 Property at lavassa 94 Property at Alibaug Flat at Pune 50% share in Sakinaka Property Total 7% of above ITA Nos. 3860 & 3859/M/2018 In ground No. 3, the assessee is aggrieved with the deemed rental value assessed by the Assessing Officer whi upheld by the Ld. CIT(A). The brief facts qua the issue-in-dispute are that assessee properties: Property Amount Flat at Brighton 4,02,40,060 Office premises at Appejay House 1,23,36,609 Propety at Lavassa 92 1,71,90,73 Property at lavassa 94 1,71,49,899 Property at Alibaug 5,02,696 20,72,866 50% share in Sakinaka Property 2,37,027 The assessee offered income from house property from various properties at Rs.6,00,000/- per annum. The Assessing Officer estimated the deemed rent on the property @ 7% of the value of the income from house property’ following the decision of the Hon’ble Allahabad High Court in the case of M/s Radha Devi Dalmia v. CIT 125 ITR 134 (All). The detail of the rental value deemed by the Assessing Officer is as under: Property Amount Office premises at Appejay House 1,23,36,609 Propety at Lavassa 92 1,71,90,735 Property at lavassa 94 1,71,49,899 Property at Alibaug 5,02,696 20,72,866 50% share in Sakinaka Property 2,37,027 4,94,89,832 34,64,288 Smt. Suman Gupta 13 ITA Nos. 3860 & 3859/M/2018 In ground No. 3, the assessee is aggrieved with the deemed rental value assessed by the Assessing Officer which has been dispute are that assessee Amount 4,02,40,060 1,23,36,609 1,71,90,735 1,71,49,899 5,02,696 20,72,866 2,37,027 The assessee offered income from house property from various per annum. The Assessing Officer estimated the deemed rent on the property @ 7% of the value of the following the decision of M/s Radha Devi . The detail of the rental value Amount 1,23,36,609 1,71,90,735 1,71,49,899 5,02,696 20,72,866 2,37,027 4,94,89,832 34,64,288 Income already offered by assessee Income to be offered 12.2 Out of the total investment of Rs.1,44,09,475/ the Ld. CIT(A) upheld return on the investment rental value on two property property at Pune’, which against Rs.6,00,000/ Ld. CIT(A) sustained the addition to the extent of Rs.4,08,663/ 13. Before us, the Ld. Counsel of the assessee submitted that under the provisions of the Act annual value of properties should be considered based on the municipal ratable value fixed by the municipal authorities u/s 23(1) the Act and the deemed rental value determined by the Assessing Officer @ 7% of the rate of the investment is arbitrary and provisions of the Act. 13. The Ld. DR on the other hand relied on the order of the lower authorities. 14. We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. assessee has sought relief on two has submitted that the purpose of own business and so deemed rental in case of that property ITA Nos. 3860 & 3859/M/2018 Income already offered by assessee 6,00,000 Income to be offered 28,64,288 he total investment of Rs.1,44,09,475/ the Ld. CIT(A) upheld return on the investment @ 7% rental value on two property namely ‘Apeejay house’ and ‘residential ’, which was computed to Rs.10 against Rs.6,00,000/- declared by the assessee and therefore, the Ld. CIT(A) sustained the addition to the extent of Rs.4,08,663/ Before us, the Ld. Counsel of the assessee submitted that under the provisions of the Act annual value of the deemed let out properties should be considered based on the municipal ratable municipal authorities u/s 23(1) the Act and the deemed rental value determined by the Assessing Officer @ 7% of the rate of the investment is arbitrary and contrary to the provisions of the Act. on the other hand relied on the order of the lower We have heard rival submission of the parties on the issue dispute and perused the relevant material on record. assessee has sought relief on two reasonings. Firstly has submitted that the ‘Apeejay House’ was being used for the purpose of own business and so deemed rental can’t in case of that property but, we find that no documentary evidence Smt. Suman Gupta 14 ITA Nos. 3860 & 3859/M/2018 6,00,000 28,64,288 he total investment of Rs.1,44,09,475/- in properties, @ 7% as deemed namely ‘Apeejay house’ and ‘residential was computed to Rs.10,08,663/- as declared by the assessee and therefore, the Ld. CIT(A) sustained the addition to the extent of Rs.4,08,663/-. Before us, the Ld. Counsel of the assessee submitted that the deemed let out properties should be considered based on the municipal ratable municipal authorities u/s 23(1) the Act and the deemed rental value determined by the Assessing Officer @ 7% of contrary to the on the other hand relied on the order of the lower We have heard rival submission of the parties on the issue-in- dispute and perused the relevant material on record. Before us the Firstly , the assessee was being used for the can’t be estimated ocumentary evidence in respect of the claim has been filed by the assessee lower authorities or before us assessee stands rejected. 14.1 The Second reasoning is is concerned the lett value assessed by the Assessing officer. As far as this argument of the assessee is considered, we find that is measured as annual value of the pro annual value has been contemplated in section 23 of the ready reference, said section is reproduced as “ Annual value how determined 23. (1) For the purposes of section 22, the annual value of any property (a) the sum for which the property might reasonably 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 (a), the amount 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 and owing to such vacancy the actual rent rec or receivable by the 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 respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of ITA Nos. 3860 & 3859/M/2018 in respect of the claim has been filed by the assessee lower authorities or before us and therefore this claim of the assessee stands rejected. reasoning is that as far as section lettable value of the properties is value assessed by the Assessing officer. As far as this argument of the assessee is considered, we find that income from house property is measured as annual value of the property. The determination of annual value has been contemplated in section 23 of the ready reference, said section is reproduced as under: 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 reasonably 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 amount 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 and owing to such vacancy the actual rent rec or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or Provided that the taxes levied by any local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of Smt. Suman Gupta 15 ITA Nos. 3860 & 3859/M/2018 in respect of the claim has been filed by the assessee before the and therefore this claim of the s far as section 23(1) of the Act able value of the properties is less than the value assessed by the Assessing officer. As far as this argument of income from house property The determination of annual value has been contemplated in section 23 of the Act. For : 23. (1) For the purposes of section 22, the annual value of (a) the sum for which the property might reasonably be (b) where the property or any part of the property is let and the actual rent received or receivable by the owner in excess of the sum referred to in clause (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 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 Provided that the taxes levied by any local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner 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 pai Explanation. this sub-section, the amount of actual rent received or receivable by the owner shall not include, subject to such rules as may be made in this behalf, the amount of rent which the own (2) Where the property consists of a house or part of a house which (a) is in the occupation of the owner for the purposes of his own residence; or (b) cannot actually be occupied by the owner by reason of the fact that owing to his profession carried on at any other place, he has to reside at that other 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 (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 there from is derived by the owner. (4) Where the property referred to in sub consists of mor (a) the provisions of that sub respect of 55[two] of such houses, which the assessee may, at his option, specify in this behalf; (b) the annual value of the house or houses, 56[other than the house or ho exercised an option under clause (a), shall be determined under sub-section (1) as if such house or houses had been let. ITA Nos. 3860 & 3859/M/2018 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 clause (c) of section, the amount of actual rent received or receivable by the owner shall not include, subject to such rules 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 purposes of his own residence; or (b) cannot actually be occupied by the owner by reason of the fact that owing to his employment, business or profession carried on at any other place, he has to reside at that other 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 apply 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 there from is derived by the owner. (4) Where the property referred to in sub-section (2) consists of more than 54[two houses]— (a) the provisions of that sub-section shall apply only in respect of 55[two] of such houses, which the assessee may, at his option, specify in this behalf; (b) the annual value of the house or houses, 56[other than the house or houses] in respect of which the assessee has exercised an option under clause (a), shall be determined section (1) as if such house or houses had been Smt. Suman Gupta 16 ITA Nos. 3860 & 3859/M/2018 accounting regularly employed by him) in determining the annual value of the property of that previous year in which For the purposes of clause (b) or clause (c) of section, the amount of actual rent received or receivable by the owner shall not include, subject to such rules as may be made in this behalf, the amount of rent (2) Where the property consists of a house or part of a (a) is in the occupation of the owner for the purposes of his (b) cannot actually be occupied by the owner by reason of employment, business or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall shall not apply if— (a) the house or part of the house is actually let during the (b) any other benefit there from is derived by the owner. section (2) section shall apply only in respect of 55[two] of such houses, which the assessee (b) the annual value of the house or houses, 56[other than uses] in respect of which the assessee has exercised an option under clause (a), shall be determined section (1) as if such house or houses had been (5) Where the property consisting of any building or land appurtenant thereto is held as st property or any part of the property is not let during the whole or any part of the previous year, the annual value of such property or part of the property, for the period up to 57[two years] from the end of the financial year in whic the certificate of completion of construction of the property is obtained from the competent authority, shall be taken to be nil. 14.2 Thus, for determination of the ALV under has first to find out the reasonably expected rent which the property might fetch by letting out from year to year and then this reasonably expected rent has to be compared with the annual rent received or receivable by the owner and if annual rent received or receivable as contemplated under reasonable rent expected from letting out the property from year to year as determined u/s 23(1)(a) the amount so received or receivable would the annual value for the purpose of the Act. 14.3 The assessee has not let out this property and therefore there was no actual rent received a receivable as contemplated in section 23(1)(b) of the Act in respect of the two properties in assessee has also not computed the sum for which these two properties could be reasonably expected to lead from year to year as contemplated under section 23(1)(a) of the Sonavala V CIT 177 246 ITA Nos. 3860 & 3859/M/2018 (5) Where the property consisting of any building or land appurtenant thereto is held as stock-in-trade and the property or any part of the property is not let during the whole or any part of the previous year, the annual value of such property or part of the property, for the period up to 57[two years] from the end of the financial year in whic the certificate of completion of construction of the property is obtained from the competent authority, shall be taken to Thus, for determination of the ALV under section 23(1) first to find out the reasonably expected rent which the property might fetch by letting out from year to year and then this reasonably expected rent has to be compared with the annual rent received or receivable by the owner and if annual rent received or receivable as contemplated under section 23(1)(b) is in excess of the reasonable rent expected from letting out the property from year to year as determined u/s 23(1)(a) the amount so received or e would the annual value for the purpose of The assessee has not let out this property and therefore there was no actual rent received a receivable as contemplated in section 3(1)(b) of the Act in respect of the two properties in assessee has also not computed the sum for which these two properties could be reasonably expected to lead from year to year as contemplated under section 23(1)(a) of the Act. I Sonavala V CIT 177 246 , the Bombay high Court has followed the Smt. Suman Gupta 17 ITA Nos. 3860 & 3859/M/2018 (5) Where the property consisting of any building or land trade and the property or any part of the property is not let during the whole or any part of the previous year, the annual value of such property or part of the property, for the period up to 57[two years] from the end of the financial year in which the certificate of completion of construction of the property is obtained from the competent authority, shall be taken to section 23(1), the AO first to find out the reasonably expected rent which the property might fetch by letting out from year to year and then this reasonably expected rent has to be compared with the annual rent received or receivable by the owner and if annual rent received or is in excess of the reasonable rent expected from letting out the property from year to year as determined u/s 23(1)(a) the amount so received or e would the annual value for the purpose of section 22 of The assessee has not let out this property and therefore there was no actual rent received a receivable as contemplated in section 3(1)(b) of the Act in respect of the two properties in question. The assessee has also not computed the sum for which these two properties could be reasonably expected to lead from year to year as In case of M.V. the Bombay high Court has followed the decision of the Calcutta High Court in CIT V/s Prabhabati Bansali 141 ITR 419 and concluded that the municipal value is to be regarded as the sum for which the property might reasonably expected to let from year to year that it was municipal ratable value which was unequivocally regarded as the sum for which the property might reasonably be expected to let from year to year in so far as section 23(1)(a 15. Before us, the assessee did not produce any cogent evident regarding the Municipal value of the property in question. we find that Tribunal in the case of (P) Ltd reported in 108 ITD considering the various decisions of Hon’ble High supreme court held that the municipal ratable value is not binding on the AO if the AO can show that ratable value under the Municipal Law does not represent the correct fair market value/rent, then he can determine the same on the basis of material/evidence placed before him. rent from year to year from the property, the learne Officer has estimated 7% of the investment value of the property standard rent for the year Radha Devi Dalmia (supra Hon’ble High Court is reproduced as under: ITA Nos. 3860 & 3859/M/2018 decision of the Calcutta High Court in CIT V/s Prabhabati Bansali 141 ITR 419 and concluded that the municipal value is to be regarded as the sum for which the property might reasonably expected to let from year to year that it was municipal ratable value which was unequivocally regarded as the sum for which the property might reasonably be expected to let from year to year in so (a) is concerned. he assessee did not produce any cogent evident regarding the Municipal value of the property in question. we find that Tribunal in the case of ITO V/s Makrupa Chemicals (P) Ltd reported in 108 ITD 95/110 TTJ (MUM)489 considering the various decisions of Hon’ble High supreme court held that the municipal ratable value is not binding on the AO if the AO can show that ratable value under the Municipal Law does not represent the correct fair market then he can determine the same on the basis of vidence placed before him.For determination of expected rent from year to year from the property, the learne Officer has estimated 7% of the investment value of the property standard rent for the year relying on the decision in case of M/s dha Devi Dalmia (supra). The relevant part of the decision of the Hon’ble High Court is reproduced as under: Smt. Suman Gupta 18 ITA Nos. 3860 & 3859/M/2018 decision of the Calcutta High Court in CIT V/s Prabhabati Bansali 141 ITR 419 and concluded that the municipal value is to be regarded as the sum for which the property might reasonably be expected to let from year to year that it was municipal ratable value which was unequivocally regarded as the sum for which the property might reasonably be expected to let from year to year in so he assessee did not produce any cogent evident regarding the Municipal value of the property in question. Further, ITO V/s Makrupa Chemicals 95/110 TTJ (MUM)489 after considering the various decisions of Hon’ble High Courts and supreme court held that the municipal ratable value is not binding on the AO if the AO can show that ratable value under the Municipal Law does not represent the correct fair market then he can determine the same on the basis of For determination of expected rent from year to year from the property, the learned Assessing Officer has estimated 7% of the investment value of the property as relying on the decision in case of M/s The relevant part of the decision of the “4. Learned counsel for the assessee invited our attention to a decision of the Kerala High Court in J. George v. CIT distinguishable. There, the municipal authorities determined the annual letting value at Rs. 18,000, though they were aware of the fact that the building was let out on an annual rent of Rs. 33,000. They took into consideration various circumstances and relevant factors such as the prevailing rent in the area and what a similar building of the same nature would fetch in that locality and then fixed the mont 1,500. The High Court observed that it is inconceivable that the authority who has as much interest in imposing as much legitimate tax as possible would have ignored this aspect before fixing the annual letting value. In the present case th indicate as to what circumstances or factors were actually taken into consideration by the municipal authorities. That case is distinguishable on facts. However, in our opinion, the determination of the annual letting value on the basis o investment was a just and a fair method of determining the annual letting value for the year 1971 72. 15.1 As the assessee has failed to adduce evidence in support of rent assessment by the municipal authorities and justification of the same as how same was do not find any error in the order of the Ld. CIT(A) in upholding the estimation of annual lettable value investment in property. Accordingly, the ground No. three o appeal of the assessee is dismissed. 16. In the assessment year 2014 appeal relates to issue that no addition could have been made ITA Nos. 3860 & 3859/M/2018 4. Learned counsel for the assessee invited our attention to a decision of the Kerala High Court in J. George v. CIT [1973] 92 ITR 137. That case is distinguishable. There, the municipal authorities determined the annual letting value at Rs. 18,000, though they were aware of the fact that the building was let out on an annual rent of Rs. 33,000. They took into consideration various circumstances and relevant factors such as the prevailing rent in the area and what a similar building of the same nature would fetch in that locality and then fixed the monthly rent at Rs. 1,500. The High Court observed that it is inconceivable that the authority who has as much interest in imposing as much legitimate tax as possible would have ignored this aspect before fixing the annual letting value. In the present case there is nothing to indicate as to what circumstances or factors were actually taken into consideration by the municipal authorities. That case is distinguishable on facts. However, in our opinion, the determination of the annual letting value on the basis of 7 per cent. of the investment was a just and a fair method of determining the annual letting value for the year 1971 As the assessee has failed to adduce evidence in support of rent assessment by the municipal authorities and justification of how same was fair market rental value do not find any error in the order of the Ld. CIT(A) in upholding the estimation of annual lettable value (ALV) at 7% of the cost of investment in property. Accordingly, the ground No. three o appeal of the assessee is dismissed. In the assessment year 2014-15, the ground No. 1 of the appeal relates to issue that no addition could have been made Smt. Suman Gupta 19 ITA Nos. 3860 & 3859/M/2018 4. Learned counsel for the assessee invited our attention to a decision of the Kerala High Court in C. [1973] 92 ITR 137. That case is distinguishable. There, the municipal authorities determined the annual letting value at Rs. 18,000, though they were aware of the fact that the building was let out on an annual rent of Rs. 33,000. They took into consideration various circumstances and relevant factors such as the prevailing rent in the area and what a similar building of the same nature would fetch hly rent at Rs. 1,500. The High Court observed that it is inconceivable that the authority who has as much interest in imposing as much legitimate tax as possible would have ignored this aspect before fixing the annual ere is nothing to indicate as to what circumstances or factors were actually taken into consideration by the municipal authorities. That case is distinguishable on facts. However, in our opinion, the determination of the f 7 per cent. of the investment was a just and a fair method of determining the annual letting value for the year 1971- As the assessee has failed to adduce evidence in support of rent assessment by the municipal authorities and justification of fair market rental value of property, we do not find any error in the order of the Ld. CIT(A) in upholding the at 7% of the cost of investment in property. Accordingly, the ground No. three of the 15, the ground No. 1 of the appeal relates to issue that no addition could have been made without any incriminating material found during the course of the search. We have already h being abated assessment, the ratio of the Hon’ble Bombay High Court in the case of Continental Warehousing Corporation (supra) does not apply and therefore, the Assessing Officer is authorized to make the addition witho also. The ground No. 1 of the appeal of the assessee is accordingly dismissed. 17. The ground No. 2 of the appeal is identical to the ground No. 3 of the appeal for assessment year 2015 adjudicated mutatis mutandis 18. In the result, appeal of the assessee for assessment year 2015 16 is allowed partly for statistical purposes assessment year 2014 Order pronounced in the open Court on Sd/- (KULDIP SINGH JUDICIAL MEMBER Mumbai; Dated: 27/04/2023 Rahul Sharma, Sr. P.S. Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai ITA Nos. 3860 & 3859/M/2018 without any incriminating material found during the course of the search. We have already held that the assessment year 2014 being abated assessment, the ratio of the Hon’ble Bombay High Court in the case of Continental Warehousing Corporation (supra) does not apply and therefore, the Assessing Officer is authorized to make the addition without the aid of the incriminating material also. The ground No. 1 of the appeal of the assessee is accordingly The ground No. 2 of the appeal is identical to the ground No. 3 of the appeal for assessment year 2015-16 and therefore, same is mutatis mutandis. In the result, appeal of the assessee for assessment year 2015 allowed partly for statistical purposes, whereas appeal for the assessment year 2014-15 is dismissed. nced in the open Court on 27/04 Sd/ KULDIP SINGH) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Copy of the Order forwarded to : Smt. Suman Gupta 20 ITA Nos. 3860 & 3859/M/2018 without any incriminating material found during the course of the eld that the assessment year 2014-15 being abated assessment, the ratio of the Hon’ble Bombay High Court in the case of Continental Warehousing Corporation (supra) does not apply and therefore, the Assessing Officer is authorized to ut the aid of the incriminating material also. The ground No. 1 of the appeal of the assessee is accordingly The ground No. 2 of the appeal is identical to the ground No. 3 16 and therefore, same is In the result, appeal of the assessee for assessment year 2015- , whereas appeal for the 04/2023. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER 5. Guard file. //True Copy// ITA Nos. 3860 & 3859/M/2018 BY ORDER, (Assistant Registrar) ITAT, Mumbai Smt. Suman Gupta 21 ITA Nos. 3860 & 3859/M/2018 BY ORDER, (Assistant Registrar) ITAT, Mumbai