SAYEEDA M H PESHIMAM, MUMBAI V. ITO 19(3)(4), MUMBAI

ITA 4984/MUM/2015

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 2892 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-10-2016
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: SMC
• Assessment Year: 2009-2010
• Appeal Filed On: 05-10-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SUMIT KUMAR
• Keywords: Maximum Marginal Rate
• Section: 10; 15

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH SMC , MUMBAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER ITA NO S . 4984 & 4985 /MUM/20 15 : (A.Y S : 2009 - 10 & 2010 - 11 ) SAYEEDA M H PESHIMAM BAITUL SHARIF, 101, HILL ROAD, BANDRA (W), MUMBAI 400 050. PAN : AACAS1996A ( APPELLANT ) VS. ITO - 23 ( 1 ) - 4 , MUMBAI (RESPONDENT) ASSESSEE BY : NONE REVENUE BY : SHRI SUMIT KUMAR DATE OF HEARING : 14/09 /2016 DATE OF PRONOUNCEMENT : 05 / 10 /2016 O R D E R THE CAPTIONED TWO APPEALS BY THE ASSESSEE RELATE TO ASSESSMENT YEARS 2009 - 10 & 2010 - 11 AND INVOLVE CERTAIN COMMON ISSUES. THEREFORE, THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING PASSED FOR THE SAKE OF CONVENIENCE AND BREVITY . APPEAL FOR ASSESSMENT YEAR 2009 - 10 IS TAKEN AS THE LEAD CASE TO APPRECIATE THE CONTROVERSY. ITA NO. 4984 /MUM/2015 (A.Y : 2009 - 10) : - 2. IN THIS APPEAL, ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL : - 2 SAYEEDA M H PESHIMAM ITA NOS. 4984 & 4985/MUM/2015 1. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE COMMISSIONER OF INCOME TAX (APPEALS) - 30, MUMBAI, [HEREINAFTER, FOR THE SAKE OF BREVITY, REFERRED TO AS 'THE CIT(A)'] ERRED IN FACTS AND IN LAW IN CONFIRMING THE INCOME UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' BE ASSESSED IN THE HANDS OF THE APPELLANT THOUGH INDIVIDUAL INCOME OF THE BENEFICIARIES HAS BEEN OFFERED IN THE HANDS OF THE BENEFICIARIES, AND IT IS PRAYED THAT THE INCOME BE ASSESSED IN THE HANDS OF BENEFICIARIES AND NOT IN THE HANDS OF THE APPELLANT. 2. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, IT IS PRAYED THAT THE RENT RECEIVED ON PROPERTY BE DISTRIBUTED AMONGST THE BENEFICIARIES AS ACCEPTED BY THE REVENUE IN EARL IER YEARS BY GIVING NIL TAX DEDUCTION CERTIFICATE BASED ON THE SAM E PREMISE. 3. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONSIDERING THE RENT RECEIVED AS INCOME OF THE APPELLANT DESPITE COMING TO THE CONCLUSION THAT THE INCOME BELONGED TO SAYEEDA PESHIMAM (INDIVIDUAL) AND NOT THE INCOME OF THE APPELLANT. 4. CONSIDERING THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) ERRED IN CONSIDERING THE INCOME OF THE APPELLANT TAXABLE AT MAXIMUM MARGINAL RATE WITHOUT EVEN ISSUING NOTICE REGARDING ENHANCEMENT OF TAX. 5. CONS IDERING THE FACTS AND CIRCUMSTANCES OF THE CASE, THE CIT(A) ERRED IN CONSIDERING THE INCOME OF THE APPELLANT TAXABLE AT MAXIMUM MARGINAL RATE. 3 . ALTHOUGH THE APPELLANT - ASSESSEE HAS RAISED MULTIPLE GROUNDS OF APPEAL, BUT THE SOLITARY DISPUTE RELATES TO W HETHER THE RENTAL INCOME EARNED FROM PROPERTY BEING BETUL SHARIF BUNGALOW, 104/105, SURVEY NO. 244, HILL ROAD, BANDRA (W), MUMBAI 400 050 IS TO BE TAXED IN THE HANDS OF THE NINE NUMBERS OF ASSOCIATION OF PERSONS (AOP ), AS CONTENDED BY THE ASSESSEE OR SOL ELY IN THE HANDS OF THE ASSESSEE, AS HELD BY THE INCOME - TAX AUTHORITIES. 3 SAYEEDA M H PESHIMAM ITA NOS. 4984 & 4985/MUM/2015 4 . AT THE TIME OF HEARING, IT WAS NOTICED THAT INSPITE OF SERVICE OF NOTICE OF HEARING BY REGISTERED A.D, NONE APPEARED ON BEHALF OF THE APPELLANT - ASSESSEE WHILE THE LD. DR APPEAR ED FOR THE R ESPONDENT - REVENUE. NO APPLICATION SEEKING ADJOURNMENT HAS ALSO BEEN MADE ON BEHALF OF THE APPELLANT - ASSESSEE. IN THIS VIEW OF THE MATTER, FOLLOWING RULE 24 OF THE INCOME TAX (APPELLATE TRIBUNAL) RULES, 1963, THE APPEAL IS BEING DISPOSED OF EX PA RTE QUA THE APPELLANT - ASSESSEE AFTER HEARING THE LD. DR ON MERITS. 5 . AT THE OUTSET, THE LD. DR POINTED OUT THAT BOTH THE APPEALS FILED BY THE ASSESSEE WERE BELATED. THE RECORD SHOWS THAT THE APPEALS HAVE BEEN FILED LATE BY 141 DAYS. ALONGWITH THE APPEA LS, ASSESSEE HAS FILED AN AFFIDAVIT STATING THAT DUE TO ILLNESS OF HER MOTHER, THE APPEALS COULD NOT BE FILED IN TIME. THE LD. DR POINTED OUT THAT THE AFFIDAVIT FILED BY ASSESSEE IS QUITE GENERAL AND VAGUE AND NO SPECIFIC REASON HAS BEEN BROUGHT OUT FOR C ONDONATION OF DELAY. AFTER PERUSING THE AFFIDAVIT AND NOTICING THE ABSENCE OF ASSESSEE BECAUSE OF WHICH THERE IS NO MATERIAL WHICH CAN BE VERIFIED TO UNDERSTAND THE CONTENTS OF THE AFFIDAVIT, I HOLD THAT THE DELAY IN FILING OF APPEALS HAVE NOT BEEN ADEQUA TELY AND PROPERLY EXPLAINED. THEREFORE, IN MY VIEW, IN THE ABSENCE OF ANY JUSTIFIABLE REASONS FOR THE DELAY, THE APPEALS ARE LIABLE TO BE DISMISSED AS UNADMITTED. I HOLD SO. 6 . EVEN OTHERWISE, HAVING PERUSED THE ORDERS OF THE RESPECTIVE I NCOME - TAX AUT HORITIES, I FIND NO ERROR IN THEIR APPROACH IN DENYING THE CLAIM OF THE ASSESSEE. NOTABLY, THE FOLLOWING FACTUAL ASPECTS HAVE BEEN 4 SAYEEDA M H PESHIMAM ITA NOS. 4984 & 4985/MUM/2015 NOTICED BY THE CIT(A). THE CIT(A) NOTICED THAT THE PROPERTY IN QUESTION WAS PURCHASED AND CONSTRUCTED IN 1965 BY LATE SHRI MOHAMMED HASAN HUSAIN PESHIMAM IN THE NAME OF SMT. SAYEEDA MOHHAMAD HASAN PESHIMAM. THE INCOME FROM THE SAID SELF - OCCUPIED PROPERTY WAS ASSESSED U/S 64 OF THE ACT IN THE HANDS OF SHRI MOHAMMED HASAN HUSAIN PESHIMAM, LATE HUSBAND OF THE PRESENT ASSESSEE TI LL THE AMENDMENT WAS MADE IN THE LAW TO THE EFFECT THAT SELF - OCCUPIED PROPERTY, I.E., SOP WAS TO BE VALUED AT RS. NIL. THE CIT(A) HAS ALSO NOTICED THAT THE RENTAL AGREEMENT DATED 29.3.1985 WITH CORPORATION BANK FROM WHERE THE IMPUGNED RENTALS HAVE BEEN EA RNED WAS ALSO ENTERED INTO BY THE OWNER OF THE PROPERTY, I.E., SMT. SAYEEDA MOHHAMAD HASAN PESHIMAM. IN THIS BACKGROUND, THE CIT(A) HAS CONCLUDED AS FOLLOWS : - 9.5 THEREFORE, UNDER THE INCOME - TAX ACT, WHEN THE PROPERTY WAS NEVER IN THE NAME OF LATE SHRI. M.H.H. PESHIMAM, AND THE OWNER THE PROPERTY IS ALIVE, THE QUESTION OF LEGAL HEIRS COMING IN TO CLAIM THEIR STAKE OVER THE PROPERTY DOES NOT ARISE. FURTHER, CORPORATION BANK IS MAKING PAYMENT TO SMT. SAYEEDA M.H. PESHIMAM. NO AGREEMENT HAS BEEN PLAC ED TO SHOW THAT IT HAS BEEN ENTERED INTO WITH THE AOP. FORMATION OF AOP HAS THUS, BEEN ILLEGALLY ARRIVED AT BY SMT. SAYEEDA M.H. PESHIMAM WITH A PLOY TO PAY MINIMUM TAX ON THE RENTAL INCOME OF RS.23,88,500/ - , WHICH IS SUBSTANTIED BY THE FACT THAT THE SO C ALLED 6 BENEFICIARIES VIDE THEIR RETURNS OF INCOME (COPY OF WHICH HAS BEEN FILED DURING THE COURSE OF APPELLATE PROCEEDINGS) HAVE EITHER SHOWN NIL TAXABLE INCOME OR VERY NEGLIGIBLE AMOUNT OF INCOME. THE APPELLANT HAS BEEN GETTING AWAY BY NOT MAKING PAYM ENT OF ANY TAX, OR NEGLIGIBLE TAX ON THE ABOVE INCOME SINCE 10.01.2002, THAT IS A.Y 2002 - 03/2003 - 04 ONWARDS. 9.6 THE ISSUE NOW IS WHEN THE RENTAL INCOME SHOULD HAVE BEEN OFFERED IN THE INDIVIDUAL RETURN OF INCOME OF SMT. SAYEEDA M.H. 5 SAYEEDA M H PESHIMAM ITA NOS. 4984 & 4985/MUM/2015 PESHIMAM, WHETHER THE SAME CAN BE TAXED IN THE HANDS OF THE AOP IN HER NAME. I HOLD THAT SINCE THE TDS RELATING TO RENT HAS BEEN CLAIMED IN THE RETURN OF INCOME FILED IN THE NAME OF THE AOP, THE ENTIRE INCOME IS TO BE ASSESSED IN THE HANDS OF THE AOP AT MAXIMUM MARGINAL RATE. I, THEREFORE CONFIRM THE ADDITION OF RS.14,66,605/ - AND DISMISS THE SECOND GROUND OF APPEAL OF THE APPELLANT. 7 . IN THE ABSENCE OF ANY FACTS OR MATERIAL BROUGHT OUT BEFORE ME TO THE CONTRARY, I HEREBY AFFIRM THE AFORESAID CONCLUSION OF CIT(A). THUS, O N MERITS ALSO, I FIND NO REASON TO ACCEPT THE PLEA OF ASSESSEE. 8. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. 9. INSOFAR AS APPEAL OF ASSESSEE FOR ASSESSMENT YEAR 2010 - 11 IS CONCERNED, I T WAS A COMMON POINT BETWEEN THE PARTIES THAT THE FACTS AND CIRCUMSTANCES IN ITA NO. 4985/MUM/2015, FOR ASSESSMENT YEAR 2010 - 11 ARE PARI MATERIA TO THOSE CONSIDERED BY US IN ITA NO. 4984/MUM/2015, FOR ASSESSMENT YEAR 2009 - 10, THUS, MY DECISION THEREIN SHALL APPLY MUTATIS MUTANDIS IN THIS APPEAL ALSO. 10 . RESULTAN TLY, BOTH THE APPEALS OF ASSESSEE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 5 T H OCTOBER, 2016. SD/ - ( G.S. PANNU ) ACCOUNTANT MEMBER MUMBAI, DATE : 5 T H OCTOBER , 2016 * SSL * 6 SAYEEDA M H PESHIMAM ITA NOS. 4984 & 4985/MUM/2015 COPY TO : 1) THE APPELLANT 2) THE RESPONDENT 3) THE CIT(A) CONCERNED 4) THE CIT CONCERNED 5) THE D.R, SMC BENCH, MUMBAI 6) GUARD FILE BY ORDER DY./ASSTT. REGISTRAR I.T.A.T, MUMBAI