DCIT CC 6(4), MUMBAI V. RINA JAIN, MUMBAI

ITA 430/MUM/2018

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 5967 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-07-2019
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 19-01-2018
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI M. BALAGANESH , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 547 /MUM/201 8 ( / ASSESSMENT YEAR: 2014 - 15 ) RINA JAIN 82, MAKER CHAMBERS III NARIMAN POINT, MUMBAI - 400021 . / VS. DCIT, CENTRAL CIRCLE 6(4), AIR INDIA BUILDING, 19 TH FLOOR, MUMBAI - 400021 . ITA . NO. 430 /MUM/201 8 ( / ASSESSMENT YEAR: 20 14 - 15 ) DCIT, CENTRAL CIRCLE 6(4), AIR INDIA BUILDING, 19 TH FLOOR, MUMBAI - 40 0021 . / VS. RINA JAIN 82, MAKER CHAMBERS III NARIMAN POINT, MUMBAI - 400021 . ./ ./ PAN/GIR NO. : AABPJ188EF ( / APPELLANT ) .. ( / RESPONDENT ) / DATE OF HEARING : 30/ 0 7/ 201 9 / DATE OF PRONOUNCEMENT : 31 /07/2019 / O R D E R PER AMARJIT SINGH, J M: THE ASSESSEE AS WELL AS REVENUE HAVE FI LED THE ABOVE MENTIONED APPEAL S AGAINST THE ORDER DATED 16 . 10 .201 7 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 54 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2014 - 15 . ITA NO. 547 /M/201 8 ASSESSEE BY: SHRI ANUJ KISNADWALA REVE NUE BY : SHRI D. G. PANSARI ITA. NO.547 /M/1 8 430 /M/201 8 A.Y. 2014 - 15 2 2 . THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 16 . 10 .201 7 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 54 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2014 - 1 5 . 3. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS: - 1. IN THE FACTS AND CIRCUMS TANCES OF THE CASE AND IN LAW, THE LEARNED CIT(A). ERRED IN CONFIRMING THE ANNUAL LETTING VALUE (ALV) OF THE PREMISES OWNED BY THE APPELLANT AT CENTRAL GARDEN COM PLEX CHUNABHATTI, MUMBAI AT RS. 22,95,290/ - INSTEAD OF RS.15,77.192/ - OFFERED BY THE APPELLANT BASED ON THE MUNICIPAL RATEABLE VALUE OF THE SAID PREMISES. THE LEARNED CIT(A) FAILED TO APPRECIATE THAT THE AFORESAID PREMISES WERE VACANT THROUGHOUT THE PREVIOUS YEAR AND ACCORDINGLY THE APPELLANT HAD RIGHTLY ADOPTED THE MUNICIPAL RATEABLE VALUE FOR THE PURPOSE OF DETERMINING INCOME UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' 2. THE ORDER PASSED BY THE LEARNED CIT(A) IS ILLEGAL. BAD IN LAW, ULTRA VIRES AND CONTRARY TO THE PROVISIONS OF LAW AND FACTS AND IS PASSED WITHOUT APPLICATION OF MIND AND IN VIOLA TION OF THE PRINCIPLES OF THE NATURAL JUSTICE. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GROUNDS OR ADD A NEW GROUND WHICH MAY BE NECESSARY. 4 . THE BRIEF FACTS OF THE CASE ARE THAT THE A SSESSEE FILED HER RETURN OF INCOME ON 29 . 07 .20 14 DECLARI NG TO TAL INCOME TO THE TUNE OF RS.1,02,78,160/ - . THE CASE WAS SELECTED FOR SCRUTINY. THEREFORE, NOTICE S U/S 143(2) AND 142(1) OF THE I.T. ACT, 1961 WERE ISSUED AND SERVED UPON THE ASSESSEE. DURING THE YEAR UNDER CONSIDERATION, THE ASSESSEE RECEIVED THE INC OME FROM HOUSE PROPERTY TO THE TUNE OF RS. 33,57,314/ - AND INCOME FROM OTHER SOURCES TO THE TUNE OF RS.70,45,850/ - . ON VERIFICATION, IT WAS ALSO FOUND THAT THE ASSESSEE HAS SHOWN HER FLAT AT CENTRAL G ARDEN COMPLEX AS VACANT AND HAS OFFERED ANNUAL RENTAL VAL UE OF THE FLAT AS PER THE MUNICIPAL RATABLE VALUE AT RS.15,77,192/ - . NOTICE WAS GIVEN AND AFTER THE REPLY OF THE ASSESSEE, THE AO TOOK THE ANNUAL RATABLE VALUE ON THE BASIS OF THE REPORT OF ITA. NO.547 /M/1 8 430 /M/201 8 A.Y. 2014 - 15 3 INSPECTOR DATED 23.12.2010 BASED UPON THE MARKET RATE TO THE TUNE OF RS.2,96 ,57,575/ - . ACCORDINGLY, THE INCOME OF THE ASSESSEE WAS ASSESSED IN SUM OF RS.2,99,34,430/ - . FEELING AGGRIEVED, THE ASSESSEE HAS FILED AN APPEAL BEFORE THE CIT(A) AND THE CIT(A) CONSIDERED THE RATABLE VALUE TAKEN INTO CONSIDERATION F OR THE A.Y. 20 12 - 13 AND 2013 - 14, THE CIT(A) HAS ENHANCED 1/9 TH OF THE SAID VALUE TO ARRIVE AT THE ALV FOR THE RELEVANT ASSESSMENT YEAR. THE ASSESSEE WA S NOT SATISFIED, THEREFORE, HAS FILED THE PRESENT APPEAL BEFORE US . 5. WE HAVE HEARD THE ARGUMENT ADVANCED BY THE LD. R EPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. AT THE VERY OUTSET, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE CASE OF THE ASSESSEE HAS DULY BEEN COVERED BY THE DECISION OF HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2013 - 14 I N ITA. NO. 445/M/2018 AND ITA. NO.685/M/2018 DATED 22.03.2019 , THEREFORE, IN THE SAID CIRCUMSTANCES, THE MUNICIPAL RATABLE VALUE IS LIABLE TO BE TAKEN INTO CONSIDERATION FOR THE ASSESSMENT OF THE VACANT PREMISES AND ACCORDINGLY IS LIABLE TO BE TAXED. THE CO PY OF ORDER IS ON THE FILE AND THE RELEVANT FINDING IS HEREBY REPRODUCED AS UNDER: - 9. AFTER HEARING BOTH THE PARTIES AND PERUSING THE MATERIAL ON RECORD, WE FIND THAT ASSESSEE IS HAVING FLAT IN CENTRAL GARDEN COMPLEX WHICH WAS VACANT DURING THE YEAR AND OFFERED THE ALV OF THE FLAT AS PER MUNICIPAL RATABLE VALUE AT RS.15,06,201/ - . THE SAID ALV WAS SUBSTITUTED BY THE AO BY RS.2,77,17,360/ - ON THE BASIS OF ENQUIRES MADE IN THE FIELD BY THE INSPECTOR OF INCOME TAX RESULTING INTO AN ADDITION OF RS.1,83,47,811 / - . 10. IN THE APPELLATE PROCEEDINGS, THE LD. CIT(A) HELD THAT THE ALV OF THE FLAT WHICH WAS VACANT DURING THE YEAR HAS TO BE DETERMINED ON THE BASIS OF MUNICIPAL RATABLE VALUE BY MUNICIPAL AUTHORITIES IN A.Y. 2006 - 07 AS INCREASED BY 5% EVERY YEAR. THEREA FTER, THE LD. CIT(A) FOLLOWING THE ORDER OF HIS PREDECESSOR IN A.Y. 2010 - 11 TOOK THE ALV AT RS.17,03,369/ - AND FINALLY THE DETERMINED THE CURRENT ALV AT RS.20,81,895/ - AFTER ITA. NO.547 /M/1 8 430 /M/201 8 A.Y. 2014 - 15 4 MAKING NECESSARY ADJUSTMENTS FOR THE ANNUAL INCREASE. THUS THE DISPUTE BEFORE US I S ONLY WITH REGARD TO THE ASCERTAINMENT OF ALV WHERE THE FLAT WAS VACANT DURING THE YEAR. IN THE CASE OF DCIT VS. LAXMI JAIN IN ITA NO.2118/M/2012 A.Y. 2009 - 10 THE CO - ORDINATE BENCH OF THE TRIBUNAL BY FOLLOWING THE DECISION OF HONBLE JURISDICTIONAL HIGH C OURT IN THE CASE OF SMITABEN N. AMBANI VS. CWT, 323 ITR 104 HIGH COURT HELD THAT THE ALV OF THE VACANT FLAT HAS TO BE MADE ON THE BASIS OF MUNICIPAL RATABLE VALUE AND THUS DISMISSED THE APPEAL OF THE REVENUE. THE SAID DECISION OF THE TRIBUNAL WAS AFFIRMED BY THE HONBLE BOMBAY HIGH COURT IN THE CASE OF PR. CIT VS. LAXMI JAIN VIDE ORDER DATED 16.04.2018 ON THE GROUND THAT THERE IS NO SUBSTANTIAL QUESTION OF LAW ARISING FROM THE REVENUES APPEAL. IN THE CASE OF HARSH JAIN VS. DCIT IN ITA NO.2710/M/2013 A.Y. 2 009 - 10, THE COORDINATE BENCH OF THE TRIBUNAL HAS HELD THAT THE ALV OF THE PROPERTY HAS TO BE COMPUTED AS PER MUNICIPAL RATABLE VALUE AS DEEMED INCOME FROM THE HOUSE PROPERTY. THE SAID DECISION OF THE CO - ORDINATE BENCH OF THE TRIBUNAL WAS AFFIRMED BY THE HO NBLE BOMBAY HIGH COURT IN THE CASE OF PR. CIT VS. HARSH JAIN VIDE ORDER DATED 05.02.2019 WHERE THE APPEAL OF THE REVENUE WAS DISMISSED. 6. ON APPRAISAL OF THE ABOVE SAID FINDING, WE FIND THAT THE HONBLE ITAT HAS DECIDED THE MATTER OF CONTROVERSY ON THE BASIS OF DECISION IN CASE OF DCIT VS. LAXMI JAIN IN ITA. NO.2118/M/2012 FOR THE A.Y. 2009 - 10. THE CASE OF THE LAXMI JAIN IS RELATED TO THE SAME BUILDING IN W HICH THE ASSESSEE IS HOLDING HER FLAT. THE LAXMI JAIN HAS STATED TO THE MEMBER OF THE FAMILY OF THE ASSESSEE. THE SAID CASE HAS BEEN DECIDED ON THE BASIS OF DECISION OF JURISDICTION HIGH COURT IN CASE OF SMITABEN N. AMBANI VS. CWT, 323 ITR 104 IN WHICH THE ANNUAL LETTING VALUE OF THE VACANT FLAT HAS BEEN TAKEN INTO CONSIDERATION ON THE BASIS OF MUNICIPA L RATABLE VALUE OF THE PREMISES . SUBSEQUENTLY, THE DECISION OF HONBLE ITAT IN THE LAXMI JAIN HAS BEEN UPHELD BY HONBLE JURISDICTIONAL HIGH COURT IN ITA. NO. 1285/M/2015 DATED 16.04.2018 . IN THE CASE OF HARSH JAIN VS. DCIT IN ITA. NO.2710/M/2013 FOR THE A. Y. 2009 - 10 DATED 05.02.2019 . THE CO - ORDINATE BENCH HAS TAKEN THE SIMILAR VIEW IN WHICH THE MUNICIPAL RATABLE VALUE HAS TAKEN INTO CONSIDERATION FOR THE DEEMED INCOME FROM THE HOUSE PROPERTY. THE SAID DECISION HAS ALSO BEEN UPHELD BY HONBLE BOMBAY HIGH ITA. NO.547 /M/1 8 430 /M/201 8 A.Y. 2014 - 15 5 COU RT IN THE CASE OF PCIT VS. HARSH JAIN IN ITA. NO. 1438 OF 2016 FOR THE A.Y. 2009 - 10. THIS ISSUE HAS BEEN SQUARELY COVERED BY HONBLE JURISDICTIONAL HIGH COURT, THEREFORE, IN VIEW OF THE SAID CIRCUMSTANCES, WE ARE OF THE VIEW THAT THE ALV OF THE VACANT FLAT HAS TO BE DETERMINED ON THE BASIS OF MUNICIPAL RATABLE VALUE FOR THE PURPOSE OF ASSESSING INCOME UNDER THE HOUSE PROPERTY. ACCORDINGLY, WE DECIDE THIS ISSUE IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. I TA NO . 430 /M/201 8 7 . THIS APPEAL FILED BY THE REVE NUE IN WHICH THE ORDER OF THE CIT(A) HAS BEEN CHALLENGED WHEREIN THE CIT(A) HAS REDUCED THE ANNUAL LETTING VALUE (ALV) ON THE BASIS OF ANNUAL LETTING VALUE ASSESSED FOR THE A.Y. 2012 - 13 & 2013 - 14 INCREASED BY 5% IN THE A.Y. 2014 - 15. SINCE THE MATTER OF CON TROVERSY HAS BEEN ADJUDICATED WHILE DECIDING THE APPEAL OF THE ASSESSEE MENTIONED ABOVE IN ITA. NO.547/M/2018 AND FINDING OF THE SAID APPEAL IS QUITE APPLICABLE IN THE PRESENT CASE ALSO AS MUTATIS MUTANDIS, THEREFORE, IN VIEW OF THE SAID CIRCUMSTANCES, WE DISMISSED THE APPEAL OF THE REVENUE . 8 . IN THE RESULT, THE APPEAL S FILED BY THE REVENUE IS HEREBY DISMISSED AND APPEAL FILED BY THE ASSESSEE ARE HEREBY ALLOWED . ORDER PRONOUNCE D IN THE OPEN COURT ON 31 /07/2019 SD/ - SD/ - ( M. BALAGANESH ) (AMARJIT SINGH) / ACCOUNTANT MEMBER /JUDICIAL MEMBER MUMBA I DATED : 31 /07/2019 VIJAY / SR. PS ITA. NO.547 /M/1 8 430 /M/201 8 A.Y. 2014 - 15 6 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI