ACIT - 19(3), MUMBAI V. SHAILAJA S.HEMDEV, MUMBAI

ITA 410/MUM/2014

• Counselvise Citation: 41019914 RSA 2014
• Duration Of Justice: 1 year(s) 5 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-06-2015
• Appeal Filed By: Department
• Bench Allotted: E
• Assessment Year: 2009-2010
• Appeal Filed On: 17-01-2014
• Court: TRIBUNAL
• Department Lawyers: NEIL PHILIP
• Keywords: Notional interest

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL E , BENCH MUMBAI . . , , BEFORE SHRI R.C.SHARMA , A M & SHRI SANJAY GARG , J M ./ ITA NO . 55 / MUM/20 1 4 ( / ASSESSMENT YEAR : 20 09 - 10 ) SHAILAJA S HEMDEV, 12/13 TH FLOOR, BELAIR APARTMENT, DR AMBEDKAR ROAD, BANDRA (W), MUMBAI - 400050 VS. ADCIT - 19(3), MUMBAI ./ ./ PAN/GIR NO. : A A B BPH 2668 D ( / APPELLA NT ) .. ( / RESPONDENT ) AND ./ ITA NO. 410 / MUM/20 14 ( / ASSESSMENT YEAR :2009 - 10 ) A CIT - 19(3), MUMBAI VS. SHAILAJA S HEMDEV, 12/13 TH FLOOR, BELAIR APARTMENT, DR AMBEDKAR ROAD, BANDRA (W), MUMBAI - 400050 ./ ./ PAN/GIR NO. : A ABBPH 2668 D ( / APPELLANT ) .. ( / RESPONDENT ) /ASSESSEE BY : SHRI YOGESH THAR /REVENUE BY : SHRI NEIL PHILIP / DATE OF HEARING : 24 /0 6 / 2015 / DATE OF PRONOUNCEMENT 24/06 /2015 / O R D E R PER R.C.SHARMA (A.M) : TH ESE ARE THE CROSS APPEALS FILED BY THE ASSESSEE AND REVENUE AGAINST THE ORDER OF CIT(A) , MUMBAI , FOR THE ASSESSMENT YEAR 2009 - 2010 IN THE MATTER OF ORDER P ASSED U/S.14 3 (3) OF THE I.T.ACT . ITA NO S . 55&410 /1 4 2 2 . RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. FACTS IN BRIEF ARE THAT THE ASSESSEE IS AN INDIVIDUAL AND A PARTNER IN ACCESS INTERNATIONAL . DURING THE COURSE OF SCRUTINY ASSESSMENT, THE AO FOUND THAT ASSESSEE HAS NOT TAKEN ALV OF FLAT SITUATED IN PEACE HEAVEN HOUSING COOPERATIVE SOCIETY LTD. ACCORDINGLY, HE COMPUTED THE ALV, WHEREIN HE HAS TAKEN HIGHEST RANGE RENT OBTAINED FROM THE SOCIETY. IN APPEAL, THE ADDITIONAL MADE BY THE AO WAS CONFIRMED BY THE CIT(A), AGAIN ST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 3. IT WAS CONTENDED BY LD. AR THAT ON THE PRINCIPLE OF PROVISIONS OF SECTION 23(2), THE AO SHOULD NOT HAVE TAKEN THE ALV OF ONE HOUSE OUT OF VARIOUS HOUSES OWNED BY THE ASSESSEE. AS AN ALTERNATE HE SUBMITTE D THAT THE MUNICIPAL RATABLE VALUE OF THE SAID FLAT SHOULD BE TAKEN AS ALV INSTEAD OF RENT OF OTHER FLATS ADOPTED BY THE AO. 4. WE HAVE CONSIDERED RIVAL CONTENTIONS AND FOUND THAT ASSESSEE HAS OFFERED INCOME FROM HOUSE PROPERTY IN RESPECT OF FOUR FLATS. H OWEVER, NO ALV WAS OFFERED IN RESPECT OF HOUSE SITUATED IN PEACE HEAVE HOUSING COOPERATIVE SOCIETY LTD.. AS PER PROVISIONS OF SECTION 23(2), A HOUSE OR PART OF THE HOUSE WHICH IS IN THE OCCUPATION OF THE OWNER FOR THE PURPOSE OF HIS OWN RESIDENCE, SHOULD B E TAKEN AT NIL OR A HOUSE WHICH CANNOT ACTUALLY BE OCCUPIED BY THE OWNER BY THE REASON OF THE FACT THAT OWING TO HIS EMPLOYMENT , BUSINESS O R PROFESSION CARRIED ON AT ANY OTHER PLACE, HE HAS TO RESIDE AT OTHER PLACE IN A BUILDING NOT BELONGING TO HIM. AS P ER LD. AR, THE AO SHOULD NOT HAVE TAKEN ALV OF THIS HOUSE WHILE COMPUTING THE INCOME FROM HOUSE PROPERTY. EVEN THOUGH BEFORE THE CIT(A) THE ASSESSEE ITA NO S . 55&410 /1 4 3 HAS MADE THE CONTENTION THAT ANNUAL VALUE OF THIS FLAT NEEDS TO BE CONSIDERED AS NIL UNDER SECTION 23(2) OF THE ACT. HOWEVER, THERE IS NO SPECIFIC MENTION THAT THIS FLAT WAS EITHER USED BY THE ASSESSEE FOR HIS RESIDENCE OR COULD NOT BE USED DUE TO HIS OCCUPATION AT ANY OTHER PLACE. IN THE INTEREST OF JUSTICE, WE RESTORE THIS ISSUE TO THE FILE OF AO AND DIRECT THE AO NOT TO TAKE ANNUAL VALUE AT NIL IF HE FINDS THAT OUT OF THE VARIOUS FLAT OWNED BY IT, HE HAS TAKEN ALV OF ALL THE FLATS EXCEPT ONE FLAT, VALUE OF WHICH WILL BE TAKEN U/S.23(2) OF THE I.T. A CT. WE DIRECT ACCORDINGLY. 5. THE NEXT GRIEVANCE OF THE ASS ESSEE RELATES TO NON - DEDUCTION OF MAINTENANCE CHARGES WHILE COMPUTING ALV. THE ISSUE IS COVERED BY THE FOLLOWING DECISION S OF HONBLE DELHI HIGH COURT AS WELL AS COORDINATE BENCH : I) ALOO BEJAN DAVER VS. ITO, IT A NO.2381/M/10 II) CIT VS. R.J.WOOD P.LTD. ( 20 TAXMANN.COM 599)(DEL HC) III) SHARMILA TAGORE VS. JCIT(150 TAXMAN 4); IV) REALTY FINANCE & LEASING PVT. LTD. (5 SOT 3448); V) ITO VS. GOPICHAND GODHWANI (1 SOT 374) VI) VARMA FAMILY TRUST (7 ITD 392); AND VII) BOMBAY OIL INDUSTRIES VS. DCIT (82 ITD 626) WHEREIN IT HAS BEEN HELD THAT MAINTENANCE CHARGES IS DEDUCTIBLE WHILE COMPUTING ANNUAL VALUE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. RESPECTFULLY FOLLOWING THE AFORESAID JUDICIAL PRONOUNCEMENTS, WE DIRECT THE AO TO ALLOW MAINTENANCE CHARGES WHILE COMP UTING ANNUAL LETTING VALUE. 6. GROUND NO.3 WAS NOT PRESSED BY LD. AR, THEREFORE, THE SAME IS DISMISSED IN LIMINE . ITA NO S . 55&410 /1 4 4 7. THE REVENUE IN ITS APPEAL IS AGGRIEVED BY THE DIRECTION OF THE CIT(A) NOT TO TAKE NOTIONAL INTEREST AT 10% PER ANNUM ON INTEREST FREE SECU RITY DEPOSIT RECEIVED BY THE ASSESSEE WHILE COMPUTING ANNUAL LETTING VALUE U/S.23(1)(A) OF THE ACT. 8. THE ISSUE IS COVERED BY THE DECISION OF HON BLE JURISDICTIONAL HIGH COURT IN THE CASE OF SHAILAJA S.HEMDEV, ITA NO.576&578/2012, DATED 4 - 9 - 2014, WHEREIN AFTER CONSIDERING THE DECISION IN CASE OF J.K.INVESTORS (BOMBAY) LTD., 248 ITR 723 AND DECISION OF HONBLE DELHI HIGH COURT IN THE CASE OF MONI KUMAR SUBBA, 333 ITR 38, IT WAS HELD THAT NOTIONAL INTEREST ON INTEREST FREE DEPOSIT IS NOT TO BE CONSIDERED WHI LE COMPUTING ALV. 9. RESPECTFULLY FOLLOWING THE DECISION OF THE HONBLE JURISDICTIONAL HIGH COURT, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF CIT(A) IN DIRECTING THE AO NOT TO INCLUDE THE NOTIONAL INTEREST ON INTEREST FREE SECURITY DEPOSIT WHILE COMPUTI NG THE ALV. 10 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED IN PART , WHEREAS APPEAL OF THE REVENUE IS DISMISSED . O RDER PRONOUNCED IN THE OPEN COURT ON THIS 24/06 / 201 5 . SD/ - SD/ - ( ) ( SANJAY GARG ) ( . . ) ( R.C.SHARMA ) / JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; DATED 30/06 /201 5 . . /PKM , . / PS / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. ITA NO S . 55&410 /1 4 5 / BY ORDER, / ( ASSTT. REGISTRAR) , / ITAT, MUMBAI 3. ( ) / THE CIT(A), MUMBAI. 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. //TRUE COPY//