ACIT, New Delhi V. Shri Har Raj Bahadur Singh, New Delhi

ITA 4165/DEL/2010

• Counselvise Citation: [2011] 134 COUNSELVISE.COM (IT) 4173 (ITAT-DELHI)
• Duration Of Justice: 7 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 25-04-2011
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 25-04-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 08-09-2010
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MONA MOHANTY
• Assessee Lawyers: VED PRAKASH BANSAL
• Keywords: Question of law; Tax effect
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI DELHI DELHI DELHI, BENCH , BENCH , BENCH , BENCH C CC C, , , , NEW DELHI NEW DELHI NEW DELHI NEW DELHI BEFORE SHRI C. L. SETHI, JUDICIAL MEMBER AND SHRI K. D. RANJAN, ACCOUNTANT MEMBER ITA NO. 4165/DEL/2010 (ASSESSMENT YEAR 2007-08) ACIT, CIRCLE 35(1), VS. SHRI HAR RAJ BAHADUR SINGH , NEW DELHI B-19, ANAND VIHAR, DELHI-92. ITA NO. 4519/DEL/2010 (ASSESSMENT YEAR 2007-08) SHRI HAR RAJ BAHADUR SINGH, VS. DCIT, CIRCLE 35(1) , B-16, ANAND VIHAR, NEW DELHI. DELHI 110 092 (APPELLANT) (RESPONDENT) PAN AATPS5642P APPELLANT BY: SMT. MONA MOHANTY, SR. D.R. RESPONDENT BY: SHRI VED PRAKASH BANSAL, C.A. ORDER ORDER ORDER ORDER PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: PER K. D. RANJAN, AM: 1. THESE CROSS APPEALS BY THE ASSESSEE AND THE REVE NUE ARISE OUT OF THE ORDER OF CIT(A) XXVII, NEW DELHI. DURIN G THE COURSE OF HEARING, LD. A.R. FOR THE ASSESSEE DID NOT PRESS AP PEAL FILED BY THE ASSESSEE AND THEREFORE, THE SAME IS DISMISSED AS SU CH. 2. AS REGARDS THE APPEAL FILED BY THE REVENUE, THE GROUNDS OF APPEAL ARE REPRODUCED AS UNDER: 1) ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT(A) HAS IGNORED THE PROVISION LAID DOWN IN SECTI ON 23 OF THE INCOME TAX ACT, 1961. 2) THE LD. CIT(A) HA WRONGLY DELETED THE ADDITION O F ` 8,04,720/- UNDER THE HEAD INCOME FORM HOUSE PROPER TY AND ALSO ISSUED ERRONEOUS DIRECTION TO ASSESSING OFFICE R FOR I.T.A.NOS.4165, 4519/DEL/2010 2 ADOPTION OF ANNUAL LETTING VALUE ON THE BASIS OF OR DER PASSED BY MCD FOR THE F.Y. 1996-97. BUT THE ASSESSMENT OR DER U/S 143(3) IS PERTAINED TO A.Y. 2007-08. 3. THE ONLY ISSUE FOR CONSIDERATION IN REVENUES AP PEAL RELATES TO DELETING THE ADDITION UNDER THE HEAD INCOME FROM H OUSE PROPERTY. THE FACTS OF THE CASE STATED IN BRIEF ARE THAT THE ASSESSEE OWNED HOUSE PROPERTY BEARING NO. D-1/B, GREEN PARK, NEW D ELHI WHICH WAS USED BY THE COMPANY M/S. NBTC MERCANTILE PVT. LTD. IN WHICH THE ASSESSEE WAS DIRECTOR. NO RENT WAS PAID BY THE COM PANY TO THE ASSESSEE FOR THE USE OF THE PROPERTY. THE ASSESSIN G OFFICER DETERMINED THE ANNUAL LETTING VALUE ON THE BASIS OF COMPARABLE CASE OF SMT. MOTIA KAUR AND SHRI NARINDER SINGH (HU F) WHO HAVE SHOWN RENTAL INCOME OF ` 2.30 LACS PER MONTH FORM 2 400 SQ. FT. PROPERTY. THE AREA OF THE PROPERTY OWNED BY THE AS SESSEE IS 96 SQ. YARDS. THE ASSESSING OFFICER BY APPLYING THE SAME RATE, I.E. ` 95.8 PER SQ. FT. PER MONTH, ESTIMATED THE ANNUAL LETTING VALUE AT ` 22,99,200/- AND 50% SHARE OF THE ASSESSEES PROPERT Y CAME TO ` 11,49,600/-. THE ASSESSEE OWNED THE SAID PROPERTY IN CO-OWNERSHIP WITH HIS MOTHER SMT. HARJINDER KAUR. THE ASSESSING OFFICER FROM THE INCOME OF ` 11,49,600/- ALLOWED DEDUCTION U/S 24(A) AT ` 3,44,880/- AND DETERMINED THE INCOME FROM HOUSE PROPERTY AT ` 8,04,720/-. 4. ON APPEAL, LD. CIT(A) FOLLOWING THE DECISION OF HON'BLE SUPREME COURT IN HT CASE OF DEWAN DAULATRAM RAJ KAP OOR VS NEW DELHI MUNICIPAL COMMITTEE, HELD THAT ANNUAL LETTING VALUE WAS TO BE FIXED BASED ON STANDARD RENT. THE ASSESSEE FURNISH ED DETAILS OF STANDARD RENT AS FIXED BY MCD AT ` 1,52,500/-. LD. CIT(A) THEREFORE, DIRECTED THE ASSESSING OFFICER TO ADOPT ANNUAL LETT ING VALUE AT ` 1,52,500/-. 5. WHEN THE CASE CAME UP FOR HEARING, IT IS NOTED T HAT THE INCOME FROM HOUSE PROPERTY HAS BEEN ESTIMATED ON TH E BASIS OF STANDARD RENT BY CIT(A) AT ` 1,52,500/- AS AGAINST ` 8,04,720/-. THUS I.T.A.NOS.4165, 4519/DEL/2010 3 THE AMOUNT DELETED ON ACCOUNT OF ANNUAL LETTING VAL UE IS AT ` 6,52,220/- AND THE TAX THEREON WOULD BE ` 1,95,660/ -, WHICH IS LESS THAN ` 3 LACS. AS PER THE INSTRUCTION NO.3/2011 DA TED 09.02.2011 THE REVENUE IS NOT PERMITTED TO FILE APPEAL BEFORE THE TRIBUNAL IF THE TAX EFFECT IS LESS THAN ` 3 LACS. 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE MATERIAL AVAILABLE ON RECORD. INSTRUCTION NO.3/201 1 DATED 09.02.2011 HAS REVISED THE MONETARY LIMIT FOR FILI NG THE APPEAL BY THE DEPARTMENT BEFORE INCOME TAX APPELLATE TRIBUNAL , HON'BLE HIGH COURT AND HON'BLE SUPREME COURT. MONETARY LIMIT FO R FILING THE APPEAL BEFORE THE TRIBUNAL IS ` 3 LACS; BEFORE HON' BLE HIGH COURT ` 10 LACS AND BEFORE HON'BLE SUPREME COURT ` 25 LACS. H ON'BLE DELHI HIGH COURT IN THEIR ORDER DATED 25.03.2011 IN I.T.A . NOS. 3 TO 5 ETC./2010 HAS HELD AS UNDER: IT IS STATED THAT THE TAX IMPACT IN THE PRESENT CA SES IS LESS THAN ` 10 LAKHS. THE DEPARTMENT HAS RECENTLY ISSUE D AN INSTRUCTION BEARING NO.3/2011 DATED 09.02.2011, WHI CH IS IDENTICAL TO ITS EARLIER INSTRUCTION BEARING NO.5/2 008 DATED 15.05.2008 EXCEPT THAT IN SO FAR AS THE HIGH COURT IS CONCERNED, THE MONETARY LIMIT IN RESPECT OF APPEALS WHERE THE QUESTIONS OF LAW RAISED NEED NOT TO BE ANSWERED, HA S BEEN RAISED FROM ` 4 LAKHS TO ` 10 LAKHS. THE DIVISION BENCH OF THIS COURT IN I.T.A. NO. 89/1999 DECIDED ON 28.01.2011 H AS ALREADY HELD THAT THE INSTRUCTION BEARING NO.5/2008 DATED 1 5.05.2008 WOULD APPLY EVEN TO THE OLD PENDING REFERENCES AND APPEALS. THIS PRINCIPLE WOULD THUS NATURALLY EQUALLY APPLY T O THE INSTANT INSTRUCTION BEARING NO.3/2011 DATED 09.02.2011, AS WELL. THE TAX EFFECT BEING LESS THAN ` 10 LAKHS, THE QUESTION OF LAW DOES NOT REQUIRE TO BE ANSWERED. THE APPEALS ARE DISPOS ED OF ACCORDINGLY. I.T.A.NOS.4165, 4519/DEL/2010 4 7. LD. A.R. FOR THE ASSESSEE HAS ALSO FILED COPY OF THE ORDER OF HON'BLE DELHI HIGH COURT IN THE CASE OF CIT VS DELH I RACE CLUB LTD. IN I.T.A. NO. 128/2008 DATED 03.03.2011 WHEREIN IT HAS BEEN HELD AS UNDER: THE TAX EFFECT INVOLVED IN THE PRESENT APPEAL IS ` 4,65,860/-. AS PER THE RECENT GUIDELINES OF THE CB DT, APPEAL IN THOSE CASES WHERE THE TAX EFFECT IS LESS THAN ` 10 LACS, ARE NOT TO BE ENTERTAINED. THIS COURT IN THE CASE OF CIT DELHI III VS M/S. P. S. JAIN AND CO. BEING I.T.A. NO. 179/1991 DECIDED ON 2 ND AUGUST, 2010 HAS TAKEN A VIEW THAT SUCH CIRCULAR WOULD ALSO APPLY TO PENDING CASES. 8. IN VIEW OF THE DECISION OF HON'BLE DELHI HIGH CO URT IT IS CLEAR THAT INSTRUCTION NO.3/2011 DATED 09.02.2011 WILL AP PLY TO ALL PENDING APPEALS. RESPECTFULLY FOLLOWING THE PRECED ENT, IT IS HELD THAT THE APPEAL IS NOT MAINTAINABLE IN THE INSTANT CASE THE TAX EFFECT IS LESS THAN ` 3 LACS. ACCORDINGLY, IT IS HELD THA T APPEAL FILED BY THE REVENUE IS NOT MAINTAINABLE. IN VIEW OF THE ABOVE , THE APPEAL FILED BY THE REVENUE IS DISMISSED AS NOT MAINTAINABLE. 9. IN THE RESULT, BOTH THE APPEALS FILED BY THE ASS ESSEE AND THE REVENUE ARE DISMISSED. 10. ORDER PRONOUNCED IN THE OPEN COURT ON 25 TH APRIL 2011. SD./- SD./- (C. L. SETHI) (K. D. RANJAN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED:25 TH APR., 2011 SP. COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT TRUE COPY: BY ORDER I.T.A.NOS.4165, 4519/DEL/2010 5 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI