ITO, New Delhi V. M/s. Bhasin Estates, New Delhi

ITA 4589/DEL/2009

• Counselvise Citation: [2010] 135 COUNSELVISE.COM (IT) 6772 (ITAT-DELHI)
• Duration Of Justice: 11 month(s) 8 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 28-09-2010
• Assessment Year: 2004-2005
• Appeal Filed On: 04-12-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MRS PRATIMA KAUSHIK
• Keywords: Opportunity of being heard; Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH A: NEW DELHI BEFORE SHRI G.E.VEERABHADRAPPA, VICE PRESIDENT AND SHRI C.L. SETHI, JUDICIAL MEMBER. I.T.A.NO.4589/DEL/2009 ASSESSMENT YEAR : 2004-05 INCOME-TAX OFFICER, M/S. BHASIN ESTATES, WARD-28(4), NEW DELHI. VS. 47, RAGHUSHREE BUILDIN G, AJMERI GATE, DELHI. PAN: AADFB3123G (APPELLANT) (RESPONDENT) APPELLANT BY : MRS. PRATIMA KAUSHIK, SR. D R. RESPONDENT BY : NONE. O R D E R PER C.L. SETHI, JUDICIAL MEMBER. THE ONLY GROUND RAISED BY THE REVENUE IN THIS APPEA L FILED AGAINST THE ORDER, DATED 18 TH SEPTEMBER, 2010 PASSED BY THE COMMISSIONER OF INCO ME- TAX (APPEALS) PERTAINING TO THE ASSESSMENT YEAR 200 4-05 IS AS UNDER:- IN THE FACTS AND THE CIRCUMSTANCES OF THE CASE, TH E LD. CIT(A) HAS ERRED IN DIRECTING THE A.O. TO RECOMPUTED THE A LV AT RS.27,72,000/- ON THE BASIS OF MUNICIPAL VALUATION AS ASSESSED BY MCD. 2 2. IN THIS CASE THE ASSESSEE HAD SHOWN THE ANNUAL L ETTING VALUE OF THE PROPERTY AT ` 25,92,000/- BASED UPON THE MONTHLY RENT OF ` 2,16,000/- STATED TO BE AGREED TO BETWEEN THE ASSESSEE AND THE TENANT , FOR THE PURPOSE OF COMPUTING INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HOWEVER, THE ASSESSING OFFICER DETERMINED THE ALV AT ` 51,84,000/- BY TAKING THE MONTHLY RENT OF ` 4,32,000/- AS PER THE ORIGINAL LEASE AGREEMENT WHER EBY THE RENT WAS ORIGINALLY FIXED AT ` 3,00,000/- PER MONTH FOR INITIAL PERIOD OF THREE YEARS UPTO MARCH, 2000, AND THEN AT THE MONTHLY REN TAL OF ` 3,60,000/- FOR THE PERIOD UPTO MARCH, 2003 AND THEN MONTHLY RENTAL OF ` 4,32,000/- FROM THE PERIOD OF MARCH, 2003 TO FEBRUARY, 2006. IT WAS TH E CASE OF THE ASSESSEE THAT PROPERTY WAS NOT GIVING GOOD RETURN AND THEREF ORE, IT WAS AGREED BETWEEN THE ASSESSEE AND TENANT TO REDUCE THE RENT TO ` 2,16,000/- AS AGAINST ` 4,32,000/- DETERMINED IN THE ORIGINAL LEASE DEED DA TED 1 ST MARCH, 1997 FOR THE PERIOD UNDER CONSIDERATION. IN THIS RESPECT, T HE CIT(A) DECIDED THIS ISSUE BY OBSERVING AND HOLDING AS UNDER:- 4.3.2 DURING THE APPELLATE PROCEEDINGS, THE APPEL LANT PRODUCED ADDITIONAL EVIDENCES ON THE GROUND THAT SU FFICIENT OPPORTUNITY HAD NOT BEEN GIVEN DURING THE ASSESSMEN T PROCEEDINGS. THE ADDITIONAL EVIDENCES COMPRISED OF A COPY OF THE LEASE DEED DATED 23/-0/1999 AND COPY OF A CERTI FICATE DATED 07/08/2008 FROM THE TENANT CONFIRMING THE RENTAL PA YMENT OF RS.2,16,000/- PER MONTH WITH EFFECT FROM 01/01/2003 . THE SAID CONFIRMATION ALSO STATED THAT IN THE FY 04-05, THE PROPERTY WAS ACQUIRED BY ONE MRS. SWARN LATA SURI AND OTHERS AND THE MONTHLY RENT WAS FURTHER REDUCED TO RS.1,72,800 WIT H EFFECT 3 FROM 01/09/2004. THE ADDITIONAL EVIDENCES WERE PRO VIDED TO THE ASSESSING OFFICER, WHO HOWEVER MERELY REITERATE D THE CONTENTS OF THE IMPUGNED ORDER. 4.3.3 IN THE ABSENCE OF ANY MATERIAL BROUGHT ON RE CORD BY THE ASSESSING OFFICER EITHER DURING THE ASSESSME NT OR REMAND PROCEEDINGS, THE ASSERTION IN THE IMPUGNED ORDER, T HAT THE LETTER DATED 29/11/2002 RELATING TO REDUCED RENTAL OF RS.2 ,16,000/- PER MONTH WAS AN `ARRANGEMENT OF MUTUAL INTEREST FO R THE REASONS BEST KNOWN TO THE PARTIES, REMAINS UNSUBST ANTIATED. THE ASSESSING OFFICER DID NOT CONDUCT ANY INQUIRY O R INVESTIGATION TO COUNTER THE CLAIM OF THE APPELLANT THAT THE MONTHLY RENT STOOD REDUCED TO RS.2,16,000. UNDER T HE CIRCUMSTANCES, THE COMPUTATION OF THE ANNUAL VALUE OF THE PROPERTY AT RS.51,84,000 BY THE ASSESSING OFFICER C ANNOT BE SUSTAINED. HOWEVER, IT IS NOTED FROM THE ASSESSMEN T ORDER OF THE JOINT ASSESSOR & COLLECTOR, MCD THAT WITH EFFEC T FROM 01/01/2003 THE ALV WAS DETERMINED AT RS.27,72,000 A ND NOT AT RS.23.56 LAKH AS CONTENDED BY THE APPELLANT IN THE WRITTEN SUBMISSION FILED DURING APPELLATE PROCEEDINGS. SIN CE U/S 23(1) THE ANNUAL VALUE OF THE PROPERTY IS DEEMED TO BE HI GHER OF THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPE CTED TO LET FROM YEAR TO YEAR OR THE ACTUAL RENT RECEIVED OR RE CEIVABLE, IN THE ABSENCE OF ANY OTHER MATERIAL ON RECORD, THE AS SESSING OFFICER IS DIRECTED TO RECOMPUTE THE ANNUAL VALUE O F THE PROPERTY BY TAKING THE ALV AT RS.27,72,000, THE FIGURE REFLE CTED AS ALV IN THE ASSESSMENT ORDER OF THE JOINT ASSESSOR & COL LECTOR, MCD. GROUNDS 2, 3 AND 4 ARE DISPOSED ACCORDINGLY. 3. WE HAVE HEARD THE LEARNED DR. NONE FOR THE ASSE SSEE WAS PRESENT DESPITE NOTICE WAS SERVED UPON THE ASSESSEE BY AFFI XTURE AS WELL AS BY SERVICE OF NOTICE ON ASSESSEES AUTHORIZED REPRESEN TATIVE THROUGH DEPARTMENT. 4. WE HAVE CAREFULLY PERUSED THE ORDER OF THE CIT(A ) AND FIND THAT DURING THE APPELLATE PROCEEDINGS, THE ASSESSEE PROD UCED ADDITIONAL EVIDENCE 4 IN THE FORM OF A COPY OF CERTIFICATE DATED 7.08.200 8 GIVEN BY THE TENANT CONFIRMING THAT ACTUAL RENT PAID BY TENANT WAS ` 2,16,000/- PER MONTH WITH EFFECT FROM 1 ST JUNE, 2003. IN THE CONFIRMATION IT IS ALSO STATED THAT FROM THE FINANCIAL YEAR 2004-05 THE PROPERTY WAS ACQUIRED BY ONE MRS. SWARAN LATA SURI AND OTHERS, AND THE MONTHLY RENT WAS FURTHER R EDUCED FROM ` 2,16,000/- TO ` 1,72,800/- WITH EFFECT FROM 01.09.2004. THESE ADDI TIONAL EVIDENCES FILED DURING THE APPELLATE PROCEEDINGS WERE FORWARDED TO THE AO FOR HIS COMMENTS. HOWEVER, THE LEARNED CIT(A) HAS DECIDED THIS APPEAL ON THE BASIS OF ASSESSMENT OF ANNUAL LETTING VALUE MADE BY JOINT ASSESSOR AND COLLECTOR OF MCD EFFECTIVE FROM 01.01.2003. IN THE CIT(A)S ORDER, IT IS NOWHERE STATED BY HIM THAT THIS ASSESSMENT ORDER OF THE JOINT ASSESSOR & COLLECTOR OF MUNICIPAL CORPORATION OF DELHI WAS SEN T TO THE AO FOR HIS COMMENT. THE ONLY DOCUMENTS WHICH WERE SENT TO THE AO FOR HIS COMMENT WERE ADDITIONAL EVIDENCES CONSISTING OF LEASE DEED DATED 23.09.2009 AND A COPY OF A CERTIFICATE DATED 07.08.2008 GIVEN BY THE TENANT, AND NOT THE ASSESSMENT MADE BY THE JOINT ASSESSOR & COLLECTOR M CD ABOUT THE ANNUAL LETTING VALUE OF THE PROPERTY. WE, THEREFORE, REST ORE THIS MATTER BACK TO THE FILE OF THE ASSESSING OFFICER FOR HIS FRESH ADJUDIC ATION AFTER DETERMINING THE ANNUAL VALUE OF THE PROPERTY WITHIN THE MEANING OF SEC. 23 OF THE ACT AND THEN TO DECIDE THE ISSUE AS PER LAW. NEEDLESS TO M ENTION THAT THE AO SHALL 5 PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO TH E ASSESSEE. WE ORDER ACCORDINGLY. 5. IN THE RESULT, THE APPEAL FILED BY THE REVENUE I S TREATED TO BE ALLOWED FOR STATISTICAL PURPOSES. 6. THIS DECISION IS PRONOUNCED IN THE OPEN COURT ON 12 TH NOVEMBER, 2010. SD/- SD/- (G.E. VEERABHADRAPPA) (C.L. SETHI) VICE PRESIDENT JUDICIAL ME MBER DATED: 12 TH NOVEMBER, 2010. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR, ITAT.