AAMIR HUSAIN KHAN, MUMBAI V. ADDL CIT CIR 11(1), MUMBAI

ITA 4248/MUM/2012

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 83975 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-10-2014
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 29-09-2014
• Assessment Year: 2008-2009
• Appeal Filed On: 20-06-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SACHIDANAND DUBE
• Keywords: Additional evidence; Reasonable cause
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH A , MUMBAI BEFORE SHRI H.L. KARWA, PRESIDENT AND SHRI D. KARUNAKARA RAO, ACCOUNTAT MEMBER I.T.A.NO. 4248/M/2012 ( AY: 2008 - 2009) MR. AMIR HUSSAIN KHAN, BIMAL PAREKH & CO., 110, ARUN CHAMBERS, TARDEO, MUMBAI 400 034. VS. ADDL. COMMISSIONER OF INCOME TAX, CIRCLE 11(1), AAYAKAR BHAVAN, MUMBAI 400 020. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI K. GOPAL RESPONDENT BY : SHRI SACHIDANAND DUBE DATE OF HEARING: 29.9.2014 DATE OF ORDER: 29 .10.2014 O R D E R PER D. KARUNAKARA RAO, AM : THIS APPEAL IS FILED BY THE ASSESSEE ON 20.6.2012 AGAINST THE ORDER OF THE CIT (A) - 3, MUMBAI DATED 10.10.2011 FOR THE ASSESSMENT YEAR 2008 - 2009. 2. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT SOME OF THE GROUNDS ARE ARGUMENTATIVE IN NATURE AND THE CORE ISSUE TO BE ADJUDICATED EMANATES FROM THE GROUND NOS. 1.1 AND 1.2 OF THE GROUNDS OF APPEAL . T HEREFORE , THE SAID TWO GROUNDS ARE EXTRACTED WHICH READ AS UNDER: 1. THE ASSESSING OFFICER HAS ERRED IN ARRIVING AT AN ANNUAL VALUE (ALV) O F THE FOLLOWING SELF OCCUPIED HOUSE PROPERTIES (FLATS) AT 5% OF THE COST OF THE PROPERTY AND THEREBY ENHANCING THE INCOME BY RS. 21,54,945/ - UNDER THE HEAD HOUSE PROPERTY INCOME AND CIT (A) IN CONFIRMING THE SAME. NAME OF THE PROPERTY AS PER ASSESSING OFF ICER AS PER APPLICANT MARINA APARTMENTS 21,17,365/ - 4,200/ - BELLA VISTA APARTMENTS 37,580/ - 1,456/ - 21,54,945/ - 5,656/ - 1.2. IT IS SUBMITTED THAT SINCE THE HOUSE IS SELF - OCCUPIED, AS HELD BY VARIOUS COURTS THE ANNUAL VALUE SHOULD BE ARRIVED AT ON THE BASIS OF MUNICIPAL RATEABLE VALUE & CAN NEVER BE THE OPEN MARKET RATE. HENCE, THE ANNUAL VALUE BE DETERMINED AT MUNICIPAL RATEABLE VALUE. 3. AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED THAT THERE IS A DELAY OF 185 DAYS IN FILING THE APPEAL BEFORE THE TRIBUNAL. IN THIS REGARD, HE BROUGHT OUR 2 ATTENTION TO THE ASSESSEES LETTER DATED 21 ST JUNE, 2012 WHEREIN THE ASSESSEE EXPLAINED THE REA SONS FOR THE SAID DELAY OF 185 DAYS AND PRAYED TO CONDONE THE SAME. HE READ OUT THE RELEVANT PORTIONS OF THE SAID LETTER AND THE SAME ARE EXTRACTED AS UNDER: 1 2. THE APPEAL WAS HEARD BY THE LD CIT (A) - 3, MUMBAI ON 10.10.2011. HOWEVER, AS THE APPLICANT HAS NOT RECEIVED ANY ORDER, HIS AUTHORIZED REPRESENTATIVE MADE AN ENQUIRY WITH THE OFFICE OF THE LD CIT (A) - 3, MUMBAI IN APRIL 2012. THE LD CIT (A)S OFFICE HAD INFO RMED THE AUTHORIZED REPREHENSIVE THAT THE ORDER PASSED BY THE LD CIT (A) WAS DISPATCHED ON 14.10.2011 BY SPEED POST. 3. THE APPLICANT STATES THAT HE HAD NOT RECEIVED THE SAID ORDER IN THE MONTH OF OCTOBER, 2011. HE HAS ALSO MADE AN APPLICANT FOR THE XERO X OF THE ACKNOWLEDGEMENT OF SPEED POST FOR THE RECEIPT OF THE ORDER ON 14.10.2011. ON REQUEST, THE ORDER WAS GIVEN ON 23.4.2011. IMMEDIATELY AFTER THE RECEIPT OF THE ORDER, THE APPLICANT HAS FILED THE APPEAL BEFORE THE APPELLATE TRIBUNAL ON 20.6.2011. 4. THE APPLICANT, FURTHER, SUBMITS THAT IF THE DATE OF RECEIPT OF ORDER IS CONSIDERED AS 14.10.2011 THEN THE LAST DATE FOR FILING THE APPEAL BEFORE THE APPELLATE TRIBUNAL WAS 13.12.2011. THUS, THERE WOULD BE DELAY OF 185 DAYS IN FILING THE PRESENT APPEAL. THUS, A PRECAUTIONARY MEASURE THE APPLICANT IS FILING THIS PETITION FOR CONNDONATION OF DELAY. 4. IN SUPPORT OF HIS CONTENTION TO CONDONE THE DELAY, ASSESSEE ALSO RELIEXD ON THE JUDGMENT OF THE HONBLE APEX COURT IN THE CASE OF 167 ITR 471 (SC) COLLECTOR , LAND ACQUISITION VS. KATIJI . 5. ON PERUSAL OF THE SAID ASSESSEES LETTER, WE FIND, THERE IS A REASONABLE AND SUFFICIENT CAUSE FOR NOT FILING THE APPEAL BEFORE THE TRIBUNAL WITHIN THE STIPULATED TIME. CONSIDERING THE SAID REASONABLE CAUSE FOR FILING THE APPEAL BEFORE THE TRIBUNAL WITH A DELAY OF 185 WHICH IS NOT DELIBERATED, WE CONDONE THE SAME AND PROCEED TO ADJUDICATE THE APPEAL ON MERITS. 6 . ON QUANTUM ADDITIONS, THE RELEVANT FACTS OF THE CASE ARE THAT THE ASSESSEE IS A POPULAR FILM ACTOR AND MODEL. A SSESSEE FILED THE RETURN OF INCOME DECLARING THE TOTAL INCOME OF RS. 20.60 CRS. ASSESSMENT WAS COMPLETED U/S 143(3) OF THE ACT AND THE ASSESSED INCOME WAS DETERMINED AT RS. 20,81,51,240/ - . IN THE ASSESSMENT AO MADE CERTAIN ADDITIONS AND ONE OF SUCH ADDIT ION RELATES TO ALV OF THE PROPERTIES LOCATED AT (I) MARINA APARTMENT AND (II) BELLA VISTA APARTMENTS. THE FACTS RELATING TO THE SAID ADDITION ARE THAT THE ASSESSEE DECLARED 3 HOUSE PROPERTIES IN THE RETURN OF INCOME. THE INCOME DECLARED ON ACCOUNT OF EACH OF THE SAID 3 HOUSE PROPERTIES AS WELL AS THEIR VALUES ARE TABULATED AS UNDER: 3 S.NO. NAME OF THE PROPERTY INCOME DECLARED VALUE AS PER B/S. 1. MRINA APARTMENTS RS. 4,200/ - RS. 6,04,96,161/ - 2. BELLA VISTA APARTMENTS RS. 1,450/ - RS. 10,75,000/ - 3. BUNGLOW AT PANCHGANI S.O.P. RS. 7,42,00,000/ - 7 . THE DETERMINATION OF THE INCOME OF EACH OF THE PROPERTY IS THE SUBJECT MATTER OF THE ENQUIRY BY THE AO DURING THE ASSESSMENT. ASSESSEE CLAIMED THAT THE ALV OF THE SAID PROPERTIES SHOULD BE CONSIDERE D AS PER THE M UNICIPAL VALUATION RENT AS PER THE STANDARD RENT CONTROL ACT. HOWEVER, ASSESSEE FAILED TO FURNISH THE SAID RATEABLE VALUATION FOR WORKING OF ALV OF THE PROPERTIES. ACCORDINGLY, THE AO OPINED THAT 5% OF THE BOOK VALUE OF THE EACH OF THE PROPERTY WILL CONSTITUTE THEIR ALVS . ACCORDINGLY, AO DETERMINED THE INCOME ON ACCOUNT OF PROPERTY AT MARINA APARTMENT AT RS. 21,17,365/ - AND INCOME ON ACCOUNT OF PROPERTY AT BELLA VISTA AT RS. 37,580/ - . THUS, THE ASS E SSEE FAILED TO FURNISH REQUISITE MUNICIPAL RAT EABLE VALUE TO THE ASSESSING OFFICER DURING THE ASSESSMENT PROCEEDINGS THAT LED TO THE ABOVE SAID ADDITION IN THE ASSESSMENT. AGGRIEVED WITH THE SAME, THE ASSESSEE IS IN APPEAL BEFORE THE CIT (A). 8 . DURING THE PROCEEDINGS BEFORE THE CIT (A) ALSO, ASSESSE E COULD NOT SUBMIT THE REQUISITE ORDERS OF THE MUNICIPAL AUTHORITIES GIVING THE RATEABLE VALUES OF THE IMPUGNED PROPERTIES. HOWEVER, HE FILED A LETTER FROM THE VIRGO COOP. HSG. SOCIETY LTD, WHICH IS RESPONSIBLE FOR MAINTAINING THE MARINA AND BELLA VISTA A PARTMENTS , GIVING THE PARTICULARS OF RATEABLE VALUES OF THE SAID TWO FLATS. CIT (A) DID NOT ACCEPT THE SAME FOR WANT OF PROPER ORDERS FROM THE MUNICIPAL AUTHORITIES IN THIS REGARD. EVENTUALLY, CIT (A) CONFIRMED THE 5% OF THE BOOK VALUE OF EACH OF THE PRO PERTY AS INCOME OF THE ASSESSEE. THE CONTENTS OF PARA 1.3 OF THE CIT (A)S ORDER ARE RELEVANT IN THIS REGARD. AGGRIEVED WITH THE SAID DECISION OF THE CIT (A), ASSESSEE FILED THE PRESENT APPEAL BEFORE THE TRIBUNAL BY RAISING THE ABOVE MENTIONED GROUNDS. 9 . DURING THE PROCEEDINGS BEFORE US, AT THE OUTSET, LD COUNSEL FOR THE ASSESSEE MENTIONED INTER ALIA THAT THE IDENTICAL ISSUE CAME UP BEFORE THE TRIBUNAL IN ASSESSEES OWN CASE FOR THE SUBSEQUENT ASSESSMENT YEAR 2009 - 2010 AND THE SAME WAS ADJU DICATED BY TH E TRIBUNAL WHEREIN THE ISSUE WAS REMANDED TO THE FILE OF THE AO CONSIDERING THE VALUATION ON THE RATEABLE VALUES, IN RESPECT OF THE SAME PROPERTIES, FURNISHED BY THE ASSESSEE AFTER OBTAINING THE SAME FROM THE MUNICIPAL 4 AUTHORITIES. THIS CORRESPONDENCE WAS THE ADDITIONAL EVIDENCE IN THAT YEAR AND THE SAME WAS ADMITTED AND REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION. IN THIS REGARD, HE FILED A COPY OF THE ORDER OF THE TRIBUNAL VIDE ITA NO. 5660/MUM/2012 AND 6070/MUM/2012, DATED 23.4.2014 AND BROUG HT OUR ATTENTION TO PARA S 11 TO 15 OF THE SAID TRIBUNALS ORDER TO DEMONSTRATE THAT THE ISSUE IS ONE AND THE SAME. FURTHER, LD COUNSEL MENTIONED THAT SIMILAR ADDITION WAS MADE BY THE AO IN THE AY 2009 - 2010 ADOPTING 5% OF THE BOOK VALUE OF THE SAID PROPERT IES WAS CONSIDERED AS INCOME FROM THE SAID PROPERTIES AND THE SAID DECISION OF THE AO WAS NOT APPROVED BY THE TRIBUNAL. CONSIDERING THE SAME, LD COUNSEL FOR THE ASSESSEE IS OF THE OPINION THAT THE ISSUE RAISED IN GROUND NOS. 1.1 AND 1.2 OF THE INSTANT APPE AL SHOULD ALSO BE REMANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION OF THE MATTER AND TO DETERMINE THE INCOME FROM HOUSE PROPERTY CONSIDERING THE SAID LETTER OF VALUATION OF THE TWO PROPERTIES (FLATS AT MARINA AND BELLA VISTA APARTMENTS). FURTHER, LD COUNSEL MENTIONED THAT THE MUNICIPAL RATEABLE VALUES FOR THIS YEAR SHALL BE LESSER THAN THAT OF THE ONES RELEVANT FOR THE ASSESSMENT YEAR 2009 - 2010. LD COUNSEL PRAYED THAT THE AO MAY BE DIRECTED TO CONSIDERING THE ABOVE ARGUMENTS DURING THE ASSESSMENT PRO CEEDINGS. 10 . PER CONTRA LD DR RELIED HEAVILY ON THE ORDER OF THE AO AND THE CIT (A). 11 . WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE ORDERS OF THE REVENUE AUTHORITIES. ON PERUSAL OF THE RELEVANT MATERIAL PLACED BEFORE US, WE FIND, THE FLATS IN QUESTION ARE ONE AND THE SAME, WHICH WAS THE SUBJECT MATTER OF ADJUDICATION DURING THE ASSESSMENT YEAR 2009 - 2010. IT IS ALSO A DECIDED ISSUE THAT THE ALV OF THE PROPERTIES IN QUESTION SHOULD BE FINALIZED BY THE RATEABLE VALUES OF THE MUNICIPAL AUTHORITIES . AOS DECISION IN RESORTING THE AD - HOC ESTIMATIONS APPLYING THE 5% OF THE BOOK VALUE OF THE PROPERTIES WAS NOT ACCEPTED BY THE TRIBUNAL IN THE ASSESSEES OWN CASE FOR THE AY 2009 - 2010. IN THIS REGARD, WE HAVE PERUSED THE SAID ORDER OF THE TRIBUNAL DATED 23.4.2014 (SUPRA) AND FIND THE PARA S 14 & 15 ARE RELEVANT IN THIS REGARD. FOR THE SAKE OF COMPLETENESS OF THIS ORDER, THE SAID PARAS 14 AND 15 ARE EXTRACTED WHICH READ AS UNDER: 14. WE HAVE HEARD THE ARGUMENTS OF THE AR AND HAVE PERUSED THE MATERIAL PLA CED BEFORE THE REVENUE AUTHORITIES AND THE ADDITIONAL EVIDENCE, WHICH WAS EXPLAINED BY THE AR, AS TO WHY THE SAME HAS BEEN PRODUCED BEFORE US FOR THE FIRST TIME. ON GOING THROUGH THE ADDITIONAL EVIDENCE, WE ACCEPT THE REASONABLENESS OF THE SAME AND ADMIT THE SAME. SINCE, THE ADDITIONAL EVIDENCE GOES TO THE ROOT OF THE 5 ENTIRE CONTROVERSY, WE FEEL THAT IN THE INTEREST OF JUSTICE, THE ISSUE SHOULD BE RESTORED TO AO TO EXAMINE THE DOCUMENTS AND THEREAFTER TAKE A DECISION IN ACCORDANCE WITH LAW, AND AS PER THE DECISION OF THE COORDINATE BENCH IN ASSESSEES OWN CASE, WHEREIN THE DIRECTION HAD BEEN GIVEN TO THE AO TO FIX THE ALV FOR THE FLATS IN OCCUPATION OF THE ASSESSEE IN BUILDINGS, MARINA APARTMENTS AND BELLA VISTA APARTMENTS, KEEPING IN MIND THAT VALUATION T AKEN BY BMC PERTAINS TO THE BUILDING AND NOT TO THE INDIVIDUAL FLAT(S). 15. WE, THEREFORE, SET ASIDE THE ORDER OF THE CIT (A) AND RESTORE THE ISSUE TO THE AO WITH ABOVE DIRECTIONS, NEEDLESS TO SAY THAT THE AO SHALL PROVIDE REASONABLE AND ADEQUATE OPPORTUNI TY TO THE ASSESSEE TO PRESENT HIS CASE. 12 . FROM THE ABOVE, IT IS EVIDENT THAT THE ASSESSEE MANAGED TO OBTAIN THE CERTIFICATE FROM THE BMC AUTHORITIES SHOWING THE VALUATION OF THE PROPERTY IN QUESTION. THE SAME ARE RELEVANT FOR THE AY 2009 - 2010. SUCH CERTIFICATE IS NOT FURNISHED BY THE ASSESSEE DUR ING THE YEAR UNDER CONSIDERATION. NEVERTHELESS, IT IS THE ARGUMENT OF THE LD COUNSEL FOR THE ASSESSEE THAT THE VALUATION OF THE PROPERTY FOR THIS YEAR WOULD BE THE SAME OR LESS THAN THE VALUATION RELEVANT FOR THE AY 2009 - 2010. THE ASSESSING OFFICER HAS N OT ACCEPTED THE CERTIFICATE ISSUED BY THE VIRGO COOP. HSG. SOCIETY LTD AND HAVING NO MATERIAL TO SUGGEST THAT 5% OF THE BOOK VALUE OF THE PROPERTY CONSTITUTES INCOME OF THE ASSESSEE AS PER THE SAID PROPERTIES. IN OUR OPINION, THIS ISSUE SHOULD ALSO BE REM ANDED TO THE FILE OF THE AO FOR FRESH ADJUDICATION KEEPING IN TUNE WITH THE DECISION RELEVANT FOR THE AY 2009 - 2010 IN THE ASSESSEES OWN CASE. ACCORDINGLY, THE GROUNDS RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 13 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOU NCED IN THE OPEN COURT ON 2 9 T H OCTOBER, 2014. S D / - S D / - (H.L. KARWA) (D. KARUNAKARA RAO) PRESIDENT ACCOUNTANT MEMBER DATE: 2 9 .10.2014. AT :MUMBAI OKK COPY TO : 1. APPELLANT 2. RESPONDENT 3. THE CIT (A), CONCERNED. 4. THE CIT CONCERNED. 5. THE DR A, BENCH, ITAT, MUMBAI. 6. GUARD FILE. 6 // TRUE COPY// BY ORDER ASSISTANT REGISTRAR ITAT, MUMBAI BENCHES, MUMBAI