KAMINI KRISHNA KOTAK, MUMBAI V. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-6(4), MUMBAI

ITA 5245/MUM/2019

• Counselvise Citation: [2021] 109 COUNSELVISE.COM (IT) 3604 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 6 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2013-2014
• Appeal Filed On: 09-08-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: GURBINDER SINGH
• Keywords: Additional evidence
• Section: 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL (V I RTUAL COURT) , H BENCH MUMBAI BEFORE : S HRI C.N. PRASAD, JM & SHRI M.BALAGANESH, AM ITA NO. 5245 /MUM/ 20 19 ( ASSESSMENT YEAR : 2013 - 14 ) MS. KAMINI KRISHNA KOTAK 18, KALPANA, 96 - B B.N. SUBHASH ROA D MARINE DRIVE, MUMBAI 400 002 VS. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE - 6(4), ROOM NO.1925, 19 TH FLOOR AIR INDIA BUILDING, NARIMAN POINT, MUMBAI 400 021 PAN/GIR NO. AADPK9383K (APPELLANT ) .. (RESPONDENT ) ASSESSEE BY SHRI NITESH J OSHI REVENUE BY SHRI GURBINDER SINGH DATE OF HEARING 28 / 01 /202 1 DATE OF PRONOUNCEMENT 17 / 02 /202 1 / O R D E R PER M. BALAGANESH (A.M) : THIS APPEAL IN ITA NO. 5245/MUM/2019 FOR A.Y. 2013 - 14 ARISES OUT OF THE ORDER BY THE LD. COMMISSIONER OF INCOME TAX (APPEALS) - 54, MUMBAI IN APPEAL NO. CIT(A) - 54/IT - 316/DC.CC.6(4)/2016 - 17 DATED 27/05/2019 (LD. CIT(A) IN SHORT) AGAINST THE ORDER OF ASSESSMENT PASSED U/S.143(3) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO AS ACT) DATED 29/ 01/2016 BY THE LD. DY. COMMISSIONER OF INCOME TAX, CENTRAL CODE - 6(4), MUMBAI (HEREINAFTER REFERRED TO AS LD. AO). ITA NO . 5245/MUM/2019 KAMINI KRISHNA KOTAK 2 2. THE ONLY ISSUE TO BE DECIDED IN THIS APPEAL IS WITH REGARD TO DETERMINATION OF RENTAL INCOME FOR FLAT NOS.16,18 AND 17B HELD BY THE ASSESS EE. THE INTERCONNECTED ISSUE INVOLVED THEREIN IS WHETHER THE FLAT NOS. 16 & 17B SITUATED IN 5 TH FLOOR, FLAT NO.18 SITUATED IN 6 TH FLOOR COULD BE CONSIDERED AS A SINGLE UNIT OR SEPARATE UNIT. 3. WE HAVE HEARD RIVAL SUBMISSIONS AND PERUSED THE MATERIALS AVA ILABLE ON RECORD. WE FIND THAT ASSESSEE IS AN INDIVIDUAL EARNING INCOME FROM DIVIDEND AND INTEREST ON FIXED DEPOSITS WITH BANKS. THE ASSESSEE FILED HER ORIGINAL RETURN OF INCOME FOR THE A.Y.2013 - 14 ON 25/07/2013 DECLARING TOTAL INCOME AT RS.75,06,520/ - . TH E ASSESSEE IS IN POSSESSION OF THE FOLLOWING PROPERTIES: - A ) FLAT NO.17B AT KALPANA, 96, NETAJI SUBHASH ROAD, MUMBAI. B ) 1/3 RD UNDIVIDED SHARE IN FLAT NO.16 AT KALPANA, 96, NETAJI SUBHASH ROAD, MUMBAI. C ) 1/3 RD UNDIVIDED SHARE IN FLAT NO.18 AT KALPANA, 96, NETAJI SUBHASH ROAD, MUMBAI. 3.1. THE ASSESSEE SUBMITTED VIDE HER LETTER DATED 16/12/2015 BEFORE THE LD. AO THAT FLAT NOS. 17B, 16 & 18 ARE TO BE CONSIDERED AS ONE SINGLE RESIDENTIAL UNIT AND NOT TO BE CONSIDERED SEPARATELY. THE ASSESSEE ALSO SUBMITTED THAT PROPE RTY IS EXTREMELY OLD AND NOT EASILY ACCESSIBLE FROM THE MAIN ROAD AND ACCORDINGLY, IT WOULD BE DIFFICULT TO PROVIDE ANNUAL LETTABLE VAL U E FOR THIS PROPERTY. THE ASSESSEE ALSO PLEADED THAT ALL THE THREE PROPERTIES SHOULD BE CONSIDERED AS ONE SINGLE UNIT AND ACCORDINGLY, TO BE TREATED AS SELF - OCCUPIED AND HENCE, NO RENTAL INCOME ON NOTIONAL BASIS COULD BE ASSESSED IN RESPECT OF THE SAME. ITA NO . 5245/MUM/2019 KAMINI KRISHNA KOTAK 3 3.2. THE LD. AO HOWEVER, DID NOT CONSIDER THE CONTENTIONS OF THE ASSESSEE AND PROCEEDED TO MAKE NOTIONAL ADDITION OF RENT AL INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY AS UNDER: - 50% SHARE IN FLAT NO. 16 KALPANA - RS.11,43,096/ - 33.37% IN FLAT NO.18 KALPANA - RS.4,10,292/ - 3.3. THE LD. AO DID NOT GIVE RELIEF TO THE ASSESSEE IN RESPECT OF MAINTENANCE CHARGES AND MUNICIPAL TAXES PAID BY THE ASSESSEE WHILE DETERMINING THE SAID INCOME FROM HOUSE PROPERTY. 3.4. THE LD. CIT(A) OBSERVED THAT ASSESSEE OWNS 50% UNDIVIDED SHARE AT FLAT NO.16 AT KAPLANA AND 33.33% UNDIVIDED SHARE IN FLAT NO.18 AT KALPANA AND THAT THEY ARE TWO SEPARATE UNITS EVEN THOUGH ASSESSEE IS CLAIMING THEM TO BE A SINGLE UNIT. APART FROM THIS, THE ASSESSEE ALSO OWNS ANOTHER FLAT I.E. FLAT NO.17B WHICH HAS BEEN CLAIMED AS SELF - OCCUPIED PROPERTY. THE LD. CIT(A) ALSO OBSERVED THAT ASSESSEE HAD FURNISHED COPIES OF LETTERS FROM KALPAK CO - OPERATIVE HOUSING SOCIETY LTD., WHICH STATES THAT FLAT NOS. 16 & 17 ARE ONE SINGLE UNIT AND THAT FLAT NOS. 16 & 18 ARE USED AS DUPLEX FLATS AND ARE CONNECTED FROM INSIDE. THE LD. CIT(A) OBSERVED THAT HOWEVER, THE FACT REMAI NS THAT ALL THREE ARE BOUGHT AND REGISTERED AS THREE SEPARATE UNITS. THE LD. CIT(A) ALSO OBSERVED THAT THE ASSESSEE HERSELF HAS GIVEN THE PREVAILING MARKET RATE OF THE PROPERTY AT RS.60/ - PER SQ.FT AND OFFERED THE NOTIONAL INCOME AT RS.9,96,760/ - IN A.Y.20 14 - 15. THE LD. CIT(A) OBSERVED THAT FLAT NO.16 AND FLAT NO.18 ARE TWO SEPARATE UNITS IN WHICH THE ASSESSEE HAS HALF UNDIVIDED SHARE AND 1/3 RD SHARE RESPECTIVELY AND THAT FLAT NO.17B ALONE COULD BE TREATED AS SELF - OCCUPIED PROPERTY. WITH THESE OBSERVATIONS, HE UPHELD THE ACTION OF THE LD. AO. HOWEVER, THE LD. CIT(A) GAVE DIRECTIONS TO THE LD. AO TO VERIFY THE RECORDS AND IF PROOF OF MUNICIPAL PAYMENT IS PRODUCED BY THE ASSESSEE, THE ASSESSEE BE GIVEN DEDUCTION THEREON IN ACCORDANCE WITH THE PROVISIONS OF THE ACT FROM THE NOTIONAL RENTAL INCOME. ITA NO . 5245/MUM/2019 KAMINI KRISHNA KOTAK 4 3.5. AT THE OUTSET, WE FIND THAT THERE IS NO DISPUTE THAT ASSESSEE IS HAVING THREE PROPERTIES NAMELY 1/3 RD SHARE IN FLAT NO.18, HALF SHARE IN FLAT NO.16 AND FULL SHARE IN FLAT NO.17B. IT IS NOT IN DISPUTE THAT FLAT NO S. 16 & 18 ARE SITUATED AT 5 TH AND 6 TH FLOOR RESPECTIVELY AT KALPANA 96, NETAJI SUBHASH ROAD, MARINE DRIVE, MUMBAI 400 002. IT IS NOT IN DISPUTE THAT THESE FLATS ARE DUPLEX FLATS HAVING A COMMON STAIRCASE ATTACHED TO BOTH THE FLOORS INSIDE THE SAID PREMI SES AND THEREFORE, ADJUSTED ADJACENT TO EACH OTHER. THIS IS ALSO EVIDENCED FROM A CERTIFICATE DATED 06/11/2018 ISSUED BY KALPAK CO - OPERATIVE HOUSING SOCIETY LTD., IT IS NOT IN DISPUTE THAT FLAT NO.17B IS ADJACENT TO FLAT NO. 16 ON 5 TH FLOOR AND THE SOCIETY HAS CONSIDERED FLAT NO.16 & 17B AS ONE SINGLE UNIT. THIS FACT IS EVIDENCED BY CERTIFICATE DATED 25/05/2016 ISSUED BY KALPAK CO - OPERATIVE HOUSING SOCIETY. FROM THE ABOVE, IT COULD BE SEEN THAT ALL THE THREE FLATS I.E. FLAT NO.16, 17B AND 18 ARE TO BE CONSI DERED AS ONE SINGLE UNIT AND TREATED AS SELF - OCCUPIED. WE FIND THAT IN THE CASE OF ASSESSEES MOTHER - IN - LAW SMT. VIDYABEN BHAGWAN KOTAK WHO IS A CO - OWNER IN THE FLATS ALONGWITH ASSESSEE, THIS TRIBUNAL IN ITA NOS.7182 TO 7186/MUM/2016 FOR A.Y.2006 - 07, 2007 - 08,2008 - 09,2009 - 10,2010 - 11 RESPECTIVELY DATED 20/09/2017 HAD ACCEPTED THE FACT THAT FLAT NO. 16 AND FLAT NO.18 ARE SITUATED ON 5 TH AND 6 TH FLOOR RESPECTIVELY HAVING COMMON STAIRCASE ATTACHED TO BOTH THE FLOORS INSIDE THE SAID PREMISES AND HENCE, TO BE CONS IDERED AS ONE HOUSE ADJACENT TO EACH OTHER. WE ALSO FIND THAT THIS TRIBUNAL IN ASSESSEES OWN CASE IN ITA NO.721 5 TO 7217/MUM/2016 FOR A.YRS. 2010 - 11,2011 - 12 & 2012 - 13 RESPECTIVELY DATED 01/07/2019 HAD ACCEPTED THE FACT THAT PROPERTIES OF THE THREE FLATS A RE TO BE CONSIDERED AS ONE SINGLE UNIT AND TREATED AS SELF - OCCUPIED PROPERTY BUT SINCE THERE WAS SOME ADDITIONAL EVIDENCE FILED IN THAT CASE, THE SAME WAS RESTORED TO THE FILE OF THE LD. AO FOR VERIFICATION AND DECIDED IN ACCORDANCE WITH LAW. THIS TRIBUNAL HAD ALSO CONSIDERED THE FACT THAT MERELY BECAUSE CERTAIN INCOME HAD BEEN OFFERED VOLUNTARILY BY THE ASSESSEE IN THE RETURNS FILED FOR SUBSEQUENT YEARS, THAT WOULD NOT BIND ASSESSEE FOR THE YEAR UNDER ITA NO . 5245/MUM/2019 KAMINI KRISHNA KOTAK 5 CONSIDERATION AS THERE IS NO ESTOPPEL AGAINST THE STATU TE AND THE SAID CHANGE IN STAND IN THE PECULIAR FACTS AND CIRCUMSTANCE OF THE INSTANT CASE CANNOT BE TERMED AS COLOURABLE DEVI C E. FOR THE YEAR UNDER CONSIDERATION, WE FIND THAT THERE IS NO ADDITIONAL EVIDENCE FILED BY THE ASSESSEE REQUIRING ANY VERIFICAT ION OF THE LOWER AUTHORITIES. RESPECTFULLY FOLLOWING THE DECISION OF THIS TRIBUNAL IN ASSESSEES OWN CASE AND ALSO IN THE CASE OF ASSESSEES MOTHER - IN - LAW REFERRED TO SUPRA, WE DIRECT THE LD. AO TO DELETE THE ADDITION ON ACCOUNT OF NOTIONAL RENTAL INCOME I N THE HANDS OF THE ASSESSEE. ACCORDINGLY, THE GROUND NOS. 1 - 4 RAISED BY THE ASSESSEE ARE ALLOWED. 4. SINCE THE ENTIRE ADDITION IS DIRECTED TO BE DELETED , THE ALTERNATIVE ARGUMENT RAISED BY THE ASSESSEE ON WITHOUT PREJUDICE BASIS IN GROUND NO.4 NEED NOT BE GONE INTO AS IT WOULD BE ACADEMIC IN NATURE. 5. THE OTHER GROUNDS RAISED BY THE ASSESSEE ARE GENERAL IN NATURE AND DOES NOT REQUIRE ANY SPECIFIC ADJUDICATION. 6 . IN THE RESULT, APPEAL OF THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON 17 / 02 /202 1 BY WAY OF PROPER MENTIONING IN THE NOTICE BOARD. SD / - ( C.N. PRASAD ) SD/ - (M.BALAGANESH) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI ; DATED 17 / 02 / 2021 KARUNA , SR.PS ITA NO . 5245/MUM/2019 KAMINI KRISHNA KOTAK 6 COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//