MEHER BANAJI KRUL, MUMBAI V. ADDL CIT 2(1), MUMBAI

ITA 4048/MUM/2010

• Counselvise Citation: 404819914 RSA 2010
• Duration Of Justice: 1 year(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-06-2011
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2007-2008
• Appeal Filed On: 18-05-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V V SHASTRI
• Assessee Lawyers: DI LIP J THAKKAR
• Keywords: Deemed owner of house property

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH H, MUMBAI BEFORE SHRI N.V.VASUDEVAN(J.M) & SHRI R.K.PANDA (A .M) ITA NO.4048/MUM/2010(A.Y. 2007-2008) MEHAR BANAJI KRUL, 9, THE CLIFF, 27, POCHKHANAWALA ROAD, WORLI, MUMBAI 400 025. PAN: AABPB 5212E (APPELLANT) VS. THE ADDL. CIT 2(1), MUMBAI. (RESPONDENT) APPELLANT BY : SHRI DILIP J. THAKKAR RESPONDENT BY : SHRI V.V.SHASTRI ORDER PER N.V.VASUDEVAN, J.M, THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE OR DER DATED 21/4/2010 OF CIT(A) IV, MUMBAI RELATING TO ASSESSMENT YEAR 20 07-08. GROUNDS OF APPEAL OF THE ASSESSEE READ AS FOLLOWS: 1. ON THE FACTS AND UNDER THE CIRCUMSTANCES OF TH E CASE AND IN LAW, THE LEARNED CIT(A) ERRED IN CONFIRMING ACTION OF AO OF TAXING THE NOTIONAL VALUE OF SECOND FLAT EVEN THOUGH BOTH THE FLATS ARE USED AS ONE HOUSE AND THERE IS NO SEPARATE KITCHEN. HENCE, CIT(A) SHOULD HAVE CONSIDERED BOTH FLAT AS ONE HOUSE. 2. WITHOUT PREJUDICE , THE CIT(A) ERRED IN TAXING THE NOTIONAL VALUE OF SECOND FLAT AS DEEMED LET OUT FLAT, BY CONSIDERING THE ANNUAL MARKET VALUE AT RS. 8,40,000/- INSTEAD OF RS. 624/- WHICH IS OFFERED BY APPELLANT AS PER MUNICIPAL RATEABLE VALUE. 2. THE ASSESSEE IS AN INDIVIDUAL. SHE DERIVES INCO ME UNDER THE HEAD CAPITAL GAINS AND INTEREST INCOME. THE ASSESSEE OW NED FLAT NO.9 & 10 AT THE CLIFF, 27, POCHKHANAWALA ROAD, WORLI, MUMBAI - 25. THE ASSESSEE OFFERED UNDER THE HEAD INCOME FROM HOUSE PROPERTY A SUM OF RS. 624/- BEING ITA NO.4048/MUM/2010(A.Y. 2007-2008) 2 MUNICIPAL VALUATION IN RESPECT OF FLAT NO.10. IN T HE COURSE OF ASSESSMENT PROCEEDINGS THE ASSESSEE SUBMITTED BEFORE ASSESSING OFFICER THAT FLAT NO.9 & 10, THOUGH ARE TWO SEPARATE FLATS, THEY ARE ADJACE NT TO EACH OTHER AND ARE BEING USED AS ONE FLAT AND BOTH THE FLATS ARE SELF OCCUPIED BY THE ASSESSEE. THE ASSESSEE, THEREFORE, SUBMITTED THAT VALUE OF FL AT NO.10 CANNOT BE BROUGHT TO TAX UNDER SECTION 22 OF THE INCOME TAX ACT, 1961 (THE ACT) AS IT HAS TO BE CONSIDERED AS SELF OCCUPIED PROPERTY. THE ASSESSEE FILED CERTIFICATE OF THE SOCIETY TO SHOW THAT FLAT NO.9 & 10 WERE USED AS ON E FLAT FOR SELF OCCUPATION BY THE ASSESSEE. THE ASSESSING OFFICER DID NOT DEA L WITH THIS SUBMISSION BUT HE PROCEED TO ESTIMATE THE ANNUAL VALUATION OF FLAT NO.10. THE ASSESSING OFFICER RECEIVED AN INFORMATION FROM THE SOCIETY TH AT THE MARKET VALUE OF THE RENT OF FLATS IN THE BUILDING THE CLIFF WAS RS. 7 0,000 PER MONTH. THE ASSESSING OFFICER ACCORDINGLY PROCEEDED TO DETERMIN E THE ANNUAL VALUE OF THE PROPERTY AS FOLLOWS: ANNUAL VALUE 70,000 X 12 RS. 8,40,000/- LESS: REPAIRS & MAINTENANCE @ 30% RS. 2,52,000/- RS. 5,88,000/- ============= 3. BEFORE CIT(A) THE ASSESSEE REITERATED ITS STAND AS WAS PUT FORTH BEFORE THE ASSESSING OFFICER AND FURTHER RELIED ON THE DEC ISION OF THE HONBLE MUMBAI BENCH OF ITAT IN THE CASE OF SURESH C. SADAR ANGANI VS. ACIT (2009) 33 SOT 428 (MUM). IN THE AFORESAID CASE THERE WER E TWO FLATS ONE ABOVE THE OTHER IN TWO FLOORS. BOTH THE FLATS WERE OCCUPIED AS ONE PROPERTY WITH A CONNECTING STAIR CASE WITHIN THE FLATS. THE ITAT H ELD THAT BOTH THE FLATS WERE TO BE CONSIDERED AS SELF OCCUPIED. THE CIT(A) HOWE VER DID NOT AGREE WITH THE PLEA OF THE ASSESSEE FOR THE FOLLOWING REASONS. 8. I DO NOT AGREE WITH THE SUBMISSIONS OF THE AUT HORIZED REPRESENTATIVE THAT IF BOTH THE HOUSES ARE BEING US ED AS ONE HOUSE THE INCOME HAS TO BE ASSESSED AS ONE HOUSE PR OPERTY. SINCE THERE ARE TWO FLATS THE AO IS JUSTIFIED IN TAXING TWO HOUSE PROPERTIES. SINCE ONE HOUSE IS TO BE REGARDED AS S OP THE OTHER ITA NO.4048/MUM/2010(A.Y. 2007-2008) 3 HOUSE IS TO BE TAXED AS ANNUAL LETTING VALUE (ALV) AS DETERMINED BY THE AO. THE CASE OF SURESH C. SADARA NGANI (33 SOT 428)(MUM) IS DISTINGUISHABLE ON FACT AS IN THAT CASE THE HOUSE PROPERTY WAS SITUATED ONE ABOVE THE OTHER AND WAS LINKED WITH COMMON STAIRS. IN FACT THAT HOUSE WAS A DUPLE X HOUSE HENCE IT WAS REGARDED AS ONE HOUSE BY HONBLE ITAT MUMBAI. IT IS NOT THE CASE HERE. HENCE THE AO IS JUSTIFIED IN TAXING THE HOUSE PROPERTY AT RS.5,88,000/-. THE ADDITION IS C ONFIRMED AND THE APPEAL ON THIS GROUND IS DISMISSED. 4. AGGRIEVED BY THE ORDER OF THE CIT(A) THE ASSESSE E PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS. WE ARE OF T HE VIEW THAT IN THE LIGHT OF THE UNDISPUTED FACT THAT BOTH THE FLATS WE RE COMBINED AND USED AS ONE FLAT THEY ARE TO BE CONSIDERED AS SELF OCCUPIED . THE FACT THAT THERE WERE TWO SEPARATE AGREEMENT FOR PURCHASE OF FLATS WOULD NOT MEAN THAT THEY WERE TWO SEPARATE PROPERTIES. THE CIT(A) WAS NOT JUSTIF IED IN DISTINGUISHING THE CASE OF SURESH SADARANGANI (SUPRA) ON THE GROUND TH AT THE FLATS WERE SITUATED ONE ABOVE THE OTHER, WHEREAS IN ASSESSEE S CASE THEY WERE LOCATED ADJACENT TO EACH ON THE SAME FLOOR. THE MAIN ASPEC T WHICH SHOULD HAVE WEIGHED IS THE FACT THAT THOUGH THEY ARE TWO FLATS, THEY WERE USED AS ONE FLAT AND OCCUPIED BY THE ASSESSEE. WE, THEREFORE, HOLD THAT THE ANNUAL VALUE OF FLAT NO.10 HAS TO BE TAKEN AS NIL. IN VIEW OF THE ABOVE GROUND NO.2 RAISED BY THE ASSESSEE DOES NOT REQUIRE ANY CONSIDERATION. 6. IN THE RESULT, THE APPEAL BY THE ASSESSEE IS ALL OWED. ORDER PRONOUNCED IN THE OPEN COURT ON THE 17 TH DAY OF JUNE, 2011. SD/- SD/- (R.K.PANDA ) (N.V.VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI, DATED. 17 TH JUNE.2011 ITA NO.4048/MUM/2010(A.Y. 2007-2008) 4 COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3 . THE CIT CITY CONCERNED 4. THE CIT(A)- CONCERNED 5. THE D.RH BENCH. (TRUE COPY) BY ORDER ASST. REGISTRAR, I TAT, MUMBAI BENCHES MUMBAI. VM. ITA NO.4048/MUM/2010(A.Y. 2007-2008) 5 DETAILS DATE INITIALS DESIGNATION 1 DRAFT DICTATED ON 9/6/11 SR.PS/PS 2 DRAFT PLACED BEFORE AUTHOR 10/6/11 SR.PS/PS 3 DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY SECOND MEMBER JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS/PS 7. FILE SENT TO THE BENCH CLERK SR.PS/PS 8 DATE ON WHICH THE FILE GOES TO THE HEAD CLERK 9 DATE OF DISPATCH OF ORDER