ACIT 3(1)(2), MUMBAI V. EVEREST KANTO INVESTMENT & FINACE P. LTD, MUMBAI

ITA 5242/MUM/2015

• Counselvise Citation: [2018] 121 COUNSELVISE.COM (IT) 7152 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 6 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-05-2018
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2011-2012
• Appeal Filed On: 06-11-2015
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: V JUSTIN DR
• Keywords: Opportunity of being heard

Judgement Text

, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , . . , , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI N.K. PRADHAN, ACCOUNTANT MEMBER ITA NO.5242/MUM/2015 ASSESSMENT YEAR: 2011-12 ACIT-3(1)(2), ROOM NO.607, 6 TH FLOOR, AAYAKAR BHAVAN, M. K.ROAD, MUMBAI-400020 / VS. M/S EVERET KANTO INVESTMENT & FINANCE PVT. LTD. 501, RAHEJA CENTRE, FREES JOURNAL MARG, NARIMAN POINT, MUMBAI-400021 ( ' / REVENUE) ( #$ % /ASSESSEE) P.A. NO. AAACE4794L ' / REVENUE BY SHRI V. JUSTIN-DR #$ % / ASSESSEE BY RENU KAPOOR & ' ' % ( / DATE OF HEARING : 24/05/2018 ' % ( / DATE OF ORDER: 24/05/2018 / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) THE REVENUE IS AGGRIEVED BY THE IMPUGNED ORDER DAT ED 04/08/2015 OF THE LD. FIRST APPELLATE AUTHORITY, MU MBAI, IN EVEREST KANTOR INVESTMENT & FINANCE PVT. LTD. ITA NO.5242/MUM/2015 2 DELETING THE ADDITION MADE IN RESPECT OF HOUSE PROP ERTY AND DIRECTING THE ASSESSING OFFICER TO ADOPT THE RENT A CTUALLY RECEIVED BY THE ASSESSEE, DURING THE RELEVANT ASSES SMENT YEAR, AS ANNUAL VALUE OF THE PROPERTY AND FURTHER E RRED IN NOT APPRECIATING THE FACT THAT THE ANNUAL VALUE OF THE PROPERTY WAS CORRECTLY CALCULATED BY THE ASSESSING OFFICER AS PE R THE SPECIFIC PROVISION OF SECTION 23(1)(A) OF THE INCOME TAX ACT , 1961 (HEREINAFTER THE ACT). 2. DURING HEARING, AT THE OUTSET, THE LD. COUNSEL F OR THE ASSESSEE, MS. RENU KAPOOR, CLAIMED THAT THE IMPUGNE D ISSUE IS COVERED BY THE DECISION OF THE TRIBUNAL IN THE C ASE OF ASSESSEE ITSELF FOR ASSESSMENT YEAR 2007-08 (ITA NO.717/MUM/2011), ORDER DATED 04/12/2017. THE LD. D R SHRI V. JUSTIN, FAIRLY AGREED TO THE EXTENT THAT TH E TRIBUNAL FOR ASSESSMENT YEAR 2007-08 HAS ALLOWED THE APPEAL OF T HE ASSESSEE FOR STATISTICAL PURPOSES. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. IN VIEW O F THE ABOVE, EVEREST KANTOR INVESTMENT & FINANCE PVT. LTD. ITA NO.5242/MUM/2015 3 WE ARE REPRODUCING HEREUNDER THE RELEVANT PORTION F ROM THE AFORESAID ORDER DATED 04/12/2017:- THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER BY THE COMMISSIONER OF INCOME TAX (APPEALS)-39, MUMBAI (CIT(A) FOR SHORT) DATED 26.10.2010 AND PERTAINS TO THE ASS ESSMENT YEAR (A.Y.) 2007-08. 2. THE GROUNDS OF APPEAL READ AS UNDER: 1. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) HAS ERRED IN LAW AND ON THE FACTS OF THE CASE IN DIRECT ING THE ASSESSING OFFICER TO ARRIVE AT THE FAIR RENTAL VALUE BASED ON THE VALUE FOR ASSESSMENT YEAR 2004-05 AS AGAINST RENTAL VALUE DEC LARED BY THE ASSESSEE. 3. IN THIS CASE, THIS MATTER WAS EARLIER DECIDED BY THE TRIBUNAL VIDE ORDER DATED 13.09.2013 IN FAVOUR OF THE ASSESS EE BY THE FOLLOWING ORDER: 3. AT THE OUTSET, IT HAS BEEN POINTED OUT THAT AN ID ENTICAL ISSUE RAISED IN THE GROUNDS OF APPEAL HAS BEEN DECIDED BY THE ITAT IN FAVOUR OF THE ASSESSEE IN THE ASSESSEES OWN CASE I N ITA NOS. 1718 TO 1722/MUM/2009 FOR THE A.YS. 2001-02 TO 2006-07 AN D IN ITA NO. 1747/MUM/2009 FOR THE A.Y. 2005-06. THE RELEVANT FIN DINGS OF THE TRIBUNAL ARE EXTRACTED HEREUNDER: IN OUR OPINION, THE ISSUE INVOLVED IN THE PRESENT CASE THUS IS SQUARELY COVERED BY THE DECISION OF CO-ORDINATE BEN CH OF THIS TRIBUNAL IN THE CASE OF RECLAMATION REALTY INDIA P. LT D. (SUPRA) WHICH IN TURN HAS RELIED ON AND FOLLOWED BY THE JUD GMENTS OF HONBLE APEX COURT AND HON'BLE JURISDICTIONAL HIGH COURT ON A SIMILAR ISSUE AND RESPECTFULLY FOLLOWING THE SAID J UDICIAL PRONOUNCEMENTS, WE REVERSE THE IMPUGNED ORDER OF TH E LD. CIT(A) EVEREST KANTOR INVESTMENT & FINANCE PVT. LTD. ITA NO.5242/MUM/2015 4 ON THIS ISSUE AND DIRECT THE A.O. TO ADOPT THE RENT ACTUALLY RECEIVED BY THE ASSESSEE DURING A.Y. 2003-04 TO 2006-07 AS AN NUAL VALUE OF THE PROPERTY BEING MORE THAN THE MUNICIPAL RETABLE VA LUE. THE ADDITIONS MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON THIS ISSUE ARE ACCORDINGLY DELETED ALLOWING GROUND NO. 2 OF THE ASSESSEES APPEALS FOR A.Y.2003-04 TO 2006-07. IN THE ABSENCE OF ANY CONTRADICTORY FACTS BROUGHT O N RECORD BY THE REVENUE, WE, FOLLOWING THE AFOREMENTIONED ORDER OF T HE ITAT, DECIDE THE GROUND ACCORDINGLY IN FAVOUR OF THE ASSE SSEE IN THE SAME LINE AS AFOREMENTIONED. 4. AGAINST THE ABOVE ORDER, THE REVENUE HAS PREFERR ED AN APPEAL BEFORE THE HON'BLE JURISDICTIONAL HIGH COURT . THE HONBLE HIGH COURT VIDE ORDER DATED 17.11.2016 HAD HELD AS UNDER: 4. THE IMPUGNED ORDER OF THE TRIBUNAL DATED 13 TH SEPTEMBER, 2016 ALLOWED THE RESPONDENT-ASSESSEES APPEAL BY REL YING UPON ITS DECISION RENDERED IN RESPECT OF THE SAME RESPONDENT -ASSESSEE FOR THE ASSESSMENT YEARS 2001-02 TO 2006-07 TO DETERMIN E THE FAIR RENT. THE IMPUGNED ORDER HAS DIRECTED THE ASSESSING OFFICE R TO ADOPT RENT ACTUALLY RECEIVED BY THE RESPONDENT-ASSESSEE DUR ING THE ASSESSMENT YEAR 2003-04 AS THE ANNUAL VALUE OF THE PROPERTY AS IT IS MUCH MORE THAN THE MUNICIPAL RATEABLE VALUE. THE EXE RCISE OF DETERMINING THE ANNUAL VALUE HAS TO BE DONE INDEPEN DENTLY FOR EACH ASSESSMENT YEAR TAKING INTO ACCOUNT THE RENT WHICH IS RECEIVED AND THE MUNICIPAL RATEABLE VALUE IN THE SUBJECT ASSESSME NT YEAR. THIS EXAMINATION HAS NOT BEEN DONE BY THE TRIBUNAL IN TH E IMPUGNED ORDER. 5. THEREFORE, THE QUESTION AS FRAMED FOR OUR CONSIDERA TION IS ANSWERED IN THE NEGATIVE I.E. IN FAVOUR OF THE APPEL LANT-REVENUE AND AGAINST THE RESPONDENT-ASSESSEE. CONSEQUENTLY, TH E IMPUGNED ORDER DATED 13 TH SEPTEMBER, 2016 OF THE TRIBUNAL IS HEREBY SET ASID E AND THE APPEAL IS RESTORED TO THE FILE OF THE TRIBU NAL FOR FRESH DISPOSAL IN ACCORDANCE WITH LAW. 5. PURSUANT TO THE ABOVE DIRECTION OF THE HONBLE H IGH COURT, THIS APPEAL HAS BEEN HEARD BY US. UPON CAREFUL CONS IDERATION, WE EVEREST KANTOR INVESTMENT & FINANCE PVT. LTD. ITA NO.5242/MUM/2015 5 NOTE THAT THE HONBLE HIGH COURT HAS EXPOUNDED THAT THE EXERCISE OF DETERMINING THE ANNUAL VALUE HAS TO BE DONE INDEPEN DENTLY FOR EACH YEAR TAKING INTO ACCOUNT THE RENT WHICH IS RECEIVED AND THE MUNICIPAL RATEABLE VALUE IN THE SUBJECT ASSESSMENT YEAR. IN THE PRESENT CASE, THIS EXERCISE HAS NOT BEEN DONE. FURT HERMORE, FOR MAKING THIS EXERCISE RELEVANT, FACTUAL MATERIALS AR E ALSO NOT ON RECORD. HENCE, WE REMIT THIS ISSUE TO THE FILE OF T HE ASSESSING OFFICER. THE ASSESSING OFFICER SHALL EXAMINE THE IS SUE AFRESH TAKING INTO ACCOUNT THE HON'BLE JURISDICTIONAL HIGH COURT DIRECTION AS ABOVE WITH REFERENCE TO THE FACTUAL DETAILS. NEEDLE LESS TO ADD, THE ASSESSEE SHOULD BE GRANTED ADEQUATE OPPORTUNITY OF BEING HEARD. BOTH THE COUNSEL FAIRLY AGREED TO THE PROPOSITION. 6. IN THE RESULT, THIS APPEAL BY THE ASSESSEE STAND S ALLOWED FOR STATISTICAL PURPOSES. 2.2. IN VIEW OF THE ABOVE, WE FIND THAT IDENTICAL GROUND WAS RAISED WITH RESPECT TO FAIR RENTAL VALUE. THE T RIBUNAL HAS CONSIDERED THE OWN CASE OF THE ASSESSEE FOR ASSESSM ENT YEAR 2005-06 (ITA NO.1747/MUM/2009) AND 2001-02 TO 2006- 07 (ITA NO.1718 TO 1722/MUM/2009). THE REVENUE PREFERR ED THE APPEAL BEFORE THE HON'BLE HIGH COURT, WHEREIN, VIDE ORDER DATED 17/11/2016, CERTAIN DIRECTIONS WERE ISSUED, W HICH HAS EVEREST KANTOR INVESTMENT & FINANCE PVT. LTD. ITA NO.5242/MUM/2015 6 BEEN REPRODUCED IN THE AFORESAID ORDER DATED 04/12/ 2017. IN THE LIGHT OF THE ABOVE ORDER OF THE TRIBUNAL, ON TH E SAME REASONING, THIS APPEAL OF THE REVENUE IS SENT TO TH E FILE OF THE LD. ASSESSING OFFICER TO EXAMINE THE ISSUE AFRESH T AKING INTO ACCOUNT THE DECISION FROM HON'BLE HIGH COURT WITH R ESPECT TO FACTUAL DETAILS AND DECIDE IN ACCORDANCE WITH LAW. THE ASSESSEE BE GIVEN OPPORTUNITY OF BEING HEARD WITH F URTHER LIBERTY TO FURNISH EVIDENCE, IF ANY, IN SUPPORT OF ITS CLAIM. THUS, THE APPEAL OF THE REVENUE IS ALLOWED FOR STAT ISTICAL PURPOSES ONLY. FINALLY, THE APPEAL OF THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSES ONLY. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 24/05/2018. SD/- SD/- ( N.K. PRADHAN ) (JOGINDER SINGH) '# / ACCOUNTANT MEMBER $# / JUDICIAL MEMBER & MUMBAI; * DATED : 24/05/2018 F{X~{T? P.S / +' EVEREST KANTOR INVESTMENT & FINANCE PVT. LTD. ITA NO.5242/MUM/2015 7 %$&'()(*& / COPY OF THE ORDER FORWARDED TO : 1. ,-./ / THE APPELLANT 2. 0./ / THE RESPONDENT. 3. 1 1 & 2% ( ,- ) / THE CIT, MUMBAI. 4. 1 1 & 2% / CIT(A)- , MUMBAI 5. 4'5 % , 1 ,-( , 6 , & / DR, ITAT, MUMBAI 6. 7# 8 / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) , & / ITAT, MUMBAI,