Sh. Rajiv Mahajan, New Delhi V. ACIT, New Delhi

ITA 5347/DEL/2014

• Counselvise Citation: [2016] 121 COUNSELVISE.COM (IT) 4169 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC 1
• Next Hearing Date: 27-06-2016
• Assessment Year: 2005-2006
• Appeal Filed On: 01-10-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: A SREENIVASA RAO
• Assessee Lawyers: SATYAJIT GO EL CAS
• Section: 143(3); 148

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH SM C - 1 , NEW DELHI BEFORE SH. N. K. SAINI, A CCOUNTANT M EMBER ITA NO. 5347 /DEL/201 4 : ASSTT. YEAR : 2005 - 06 SH. RAJIV MAHAJAN, 20, DOUBLE STORY MARKET, NEW RAJI NDER NAGAR, NEW DELHI - 110060 VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 33(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAAPM3108P ITA NO. 4750/DEL/2014 : ASSTT. YEAR : 2005 - 06 SH. RAVINDER MAHAJAN, 20, DOUBLE STORY MARKET, NEW RAJINDER NAGAR, NEW DELHI - 110060 VS ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE - 33(1), NEW DELHI (APPELLANT) (RESPONDENT) PAN NO. AAAPM3109N ASSESSEE BY : SH. R.S. SINGHVI & SATYAJIT GOEL , CAS REVENUE BY : SH. A. SREENIVASA RAO , SR. DR DATE OF HEARING : 30 .0 9 .201 6 DATE OF PRONOUNCEMENT : 14 .10 .201 6 ORDER THESE TWO APPEALS BY THE ASSESSEES ARE DIRECTED AGAINAT THE COMMON ORDER DATED 25.06.2014 OF THE LD. CIT(A ) - XXVI, NEW DELHI. 2. SINCE THE COMMON ISSUES ARE INVOLVED IN THESE APPEALS WHICH WERE HEARD TOGETHER SO THESE ARE BEING DISPOSED OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE AND BREVITY . ITA NOS. 5347 & 4750 /DEL /201 4 RAJIV & RAVINDER MAHAJAN 2 3. AT THE FIRST INSTANCE , I WILL ADJUDICATE THE APPEA L IN ITA NO. 5347/DEL/2014 IN THE CASE OF SH. RAJIV MAHAJAN. FOLLOWING GROUNDS HAVE BEEN RAISED IN THIS APPEAL: 1. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX, (APPEAL) IS BAD IN LAW AND ON THE FACTS O F THE. CASE. 2. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD, COMMISSIONER OF INCOME TAX, (APPEAL) IS NOT JUSTIFIED IN HOLDING THAT THE AO HAS RIGHTLY APPLIED THE PROVISION OF SECTION 148 R.W.S. 147 OF THE INCOME TAX ACT 1961. 3. THAT ON THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX, (APPEAL) IS NOT JUSTIFIED IN HOLDING THAT FLAT AT MUMBAI CANNOT BE TREATED AS 'SELF OCCUPIED PROPERTY' AND COMPUTING THE ALV OF THE 50% SHARE OF THE ASSESSEE IN THE SAID FLAT AT RS 1, 60,642/ - . 4. THAT THE APPELLANT CRAVE LEAVE TO TAKE ADDITIONAL GROUND OR GROUNDS OF APPEAL OR TO ALTER OR VARY ANY OR ALL THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF BEARING, OF THE APPEAL 4 . GROUND NOS. 1 & 4 ARE GENERAL IN NATURE SO DO NOT REQUIRE ANY COMMENTS ON MY PART WHILE GROUND NO. 2 WAS NOT PRESSED AS SUCH IT IS DISMISSED AS NOT PRESSED. 5 . THE ONLY GRIEVANCE OF THE ASSESSEE VIDE GROUND NO. 3 RELATES TO THE SUSTENANCE OF ADDITION OF RS.1,60,642/ - MADE BY ITA NOS. 5347 & 4750 /DEL /201 4 RAJIV & RAVINDER MAHAJAN 3 THE AO ON ACCOUNT OF 50% SHARE OF ANN UAL LET OUT VALUE OF A FLAT AT MUMBAI. 6 . FACTS OF THE CASE IN BRIEF ARE THAT THE ASSESSEE FILED THE RETURN OF INCOME ON 02.11.2005 DECLARING AN INCOME OF RS.36,12,761/ - WHICH WAS PROCESSED U/S 143(1) OF THE INCOME TAX ACT, 1961 (HEREINAFTER REFERRED TO A S THE ACT). LATER ON, THE AO DURING THE COURSE OF ASSESSMENT PROCEEDINGS U/S 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2009 - 10 NOTICED THAT THE ASSESSEE WAS NOT DECLARING ANNUAL VALUE OF 50% SHARES IN FLAT NO. 402 , SEA SIDE APARTMENT CO - OPERATIVE HOUSING S OCIETY LTD., MUMBAI AND FLAT NO. D - 3, WARD - B, BLOCK - 17, MILHAVEN, HILTOP ROAD, KODAIKANAL. THE FLAT AT MUMBAI WAS PURCHASED IN AUGUST, 2000 AND FLAT AT KODAIKANAL WAS PURCHASED IN JUNE, 1996. HE ALSO NOTICED THAT THE ASSESSEE HAD NOT DECLARED ANY RENTAL VA LUE IN RESPECT OF ANY PROPERTY IN HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION. HE, THEREFORE, AFTER RECORDING THE REASONS REOPENED THE ASSESSMENT BY ISSUING THE NOTICE U/S 148 OF THE ACT ON 29.03.2012. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE FURNISHED THE RETURN OF INCOME ON 07.12.2012 DECLARING THE SAME INCOME AS WAS DISCLOSED IN THE RETURN OF INCOME FILED ON 02.11.2005. THE AO MADE THE ADDITION OF RS.1,60,642/ - IN RESPECT OF THE MUMBAI PROPERTY BY OBSERVING IN PARA 3.3 OF THE ASSESSMENT ORD ER DATED 22.02.2013 AS UNDER: ITA NOS. 5347 & 4750 /DEL /201 4 RAJIV & RAVINDER MAHAJAN 4 3.3 IN VIEW OF THE ABOVE, NOTIONAL RENT FROM MUMBAI PROPERTY IS BROUGHT TO TAX AT EXPECTED RENTAL VALUE. DURING A.Y. 2009 - 10, THE ANNUAL VALUE OF 50% SHARE OF THIS PROPERTY WAS TAKEN AT RS.28,000/ - PER MONTH. THEREFORE THE A NNUAL VALUE OF THIS PROPERTY IS BEING TAKEN AT RS.19,124/ - ASSUMING THAT RENTAL VALUES WOULD HAVE BEEN APPRECIATED @ 10% PER ANNUM AND THE SAME IS TREATED AS INCOME FROM SAID HOUSE PROPERTY. ACCORDINGLY COMPUTATION OF INCOME FROM THIS PROPERTY IS MADE AS U NDER: FLAT NO - 402, SEA SIDE APARTMENT CO - OPERATIVE HOUSING SOCIETY LTD., MUMBAI ANNUAL VALUE OF THE PROPERTY: RS.2,29,488/ - DEDUCTION U/S 24(A) RS.68.846/ - TAXABLE INCOME FROM THIS HOUSE PROPERTY: RS. 1,60,642/ - 7 . BEING AGGRIEVED THE ASSESSEE CARRIED THE MATTER TO THE LD. CIT(A) WHO SUSTAINED THE ADDITION BY OBSERVING IN PARA 7.5 OF THE IMPUGNED ORDER AS UNDER: 7.5 HERE, IN THE PRESENT CASES, THE AO HAS CONDUCTED IN - DEPTH ENQUIRY IN THE AY 2009 - 10 AND FOUND OUT THE EXPECTED RENT REALIZABLE IN CASE THE PROPERTY WAS LET OUT. THE DETAILS THEREOF HAVE BEEN DISCUSSED IN THE ASSESSMENT ORDER FOR THE AY 2009 - 10. THUS, KEEPING IN VIEW THE ABOVE AND THE FACTS MENTIONED IN THE APPELLANTS' ASSESSMENT ORDERS F OR THE AY 2009 - 10, I AM INCLINED TO AGREE WITH THE FINDING OF MY PREDECESSOR IN THE CASE OF SHRI RAVINDER MAHAJAN, A. NO.443/2011 - 12. THEREFORE, THE INCOME OF RS.1,60,642/ - ASSESSED FROM THE PROPERTY SITUATED IN MUMBAI IN THE HANDS OF EACH CO - OWNER/APPELLA NT IN THE RELEVANT AY IS SUSTAINED ITA NOS. 5347 & 4750 /DEL /201 4 RAJIV & RAVINDER MAHAJAN 5 PARTICULARLY WHEN THE APPELLANTS HAVE FAILED TO CONTROVERT THE FINDING OF THE AO BY DEMONSTRATING THAT THEIR 'SEA SIDE APARTMENT' IN MUMBAI WILL EARN LESSER RENT THA M THAT DETERMINED BY THE AO, ACCORDINGLY, THE GROUNDS NO . 3 TO 5 ARE DECIDED. 8 . NOW THE ASSESSEE IS IN APPEAL. THE LD. COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE ADDITION WAS MADE BY THE AO ON THE BASIS OF THE ASSESSMENT FOR THE ASSESSMENT YEAR 2009 - 10 AND THE LD. CIT(A) ALSO SUSTAINED THE SAME ON THE BASIS OF ORDER OF HIS PREDECESSOR FOR THE ASSESSMENT YEAR 2009 - 10 IN THE CASE OF SH. RAVINDER MAHAJAN. IT WAS STATED THAT IN ASSESSEE S OWN CASE FOR THE ASSESSMENT YEAR 2009 - 10, THE LD. CIT(A) - 26, NEW DELHI VIDE HIS ORDER DATED 04.01.2013 HAS DELETED THIS ADDIT ION BY OBSERVING IN PARA 8 OF THE SAID ORDER AS UNDER: 8. I HAVE CONSIDERED THE FACTS OF THE CASE AND THE WRITTEN SUBMISSIONS OF THE AR OF THE APPELLANT. I HAVE PERUSED THE CASE LAWS RELIED UPON BY THE APPELLANT. PERTAINING TO THE TWO PROPERTIES SITUATED AT MUMBAI MEN TIONED AT S. NO. 3 & 4 ABOVE, I FIND THAT THE APPELLANT IS RESIDING IN DELHI AT R - 682, NEW RAJINDER NAGAR, NEW DELHI, A PROPERTY OWNED BY HIS WIFE AND HIS NEPHEW. THEREFORE, THE ANNUAL LETTING VALUE OF THE TWO PROPERTIES AT MUMBAI IS TO BE CA LCULATED SUBJECT TO THE PROVISIONS OF SECTION 23(4) OF THE INCOME - TAX ACT, 1951. AS PER THE PROVISIONS OF SUB - SECTION (4), THE APPELLANT IS ENTITLED AT HIS OPTION TO CHOOSE ONE PROPERTY TO BE COVERED UNDER SUB - SECTION (2). IN THAT CASE THE ALV OF THE SECON D PROPERTY WOULD BE DETERMINED AS PER THE PROVISIONS OF SECTION 23(1). THE APPELLANT HAS REQUESTED TO GIVE EXEMPTION FOR SELF OCCUPATION IN RESPECT OF FLAT AT MUMBAI. THEREFORE, THE ALV OF MUMBAI, FLAT IS ITA NOS. 5347 & 4750 /DEL /201 4 RAJIV & RAVINDER MAHAJAN 6 CONSIDERA TE TO BE NIL AS PER THE PROVISIONS OF SECT ION 23(2) OF THE INCOME - TAX ACT, 1961 AND THE ALV OF THE OTHER PROPERTY AT KODAIK NAL FIAT WOULD BE ADDED AS INCOME FROM HOUSE PROPERTY IN THE HANDS OF THE APPELLANT FOR THE YEAR UND ER CONSIDERATION. 9 . THE LD. COUNSEL FOR THE ASSESSEE STATED AT BAR THAT THE AFORESAID ORDER PASSED BY THE LD. CIT(A) IN ASSESSEE S OWN CASE HAS NOT BEEN CHALLENGED AND THE SAME ATTAINED THE FINALITY. THEREFORE, THE ADDITION SUSTAINED BY THE LD. CIT(A) IN RESPECT OF SELF - OCCUPIED PROPERTY SITUATED AT MUMBAI WAS NOT JUSTIFIED. 10 . IN HIS RIVAL SUBMISSIONS THE LD. DR SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 11 . I HAVE CONSIDERED THE SUBMISSIONS OF BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE MATERIAL AVAILABLE ON THE RECORD. IN THE PRESENT CASE, IT IS NOTICED THAT THE LD. CIT(A) WHILE DECIDING THE ASSESSEE S APPEAL FOR THE ASSESSMENT YEAR 2009 - 10 ACCEPTED THE CONTENTION OF THE ASSESSEE THAT THE FLAT AT MUMBAI WAS SELF - OCCUPIED, T HEREFORE, ITS ALP WAS AT NIL . THE SAID FINDING OF THE LD. CIT(A) HAS NOT BEEN CHALLENGED BY THE DEPARTMENT. IT IS ALSO AN ADMITTED FACT THAT THE ADDITION FOR THE YEAR UNDER CONSIDERATION IN RESPECT OF THE FLAT AT MUMBAI WAS MADE BY THE AO ONLY ON THE BASIS OF THE FINDINGS GIVEN FOR THE ASSESSMENT YEAR 2009 - 10 . S INCE THE ADDITION FOR THE SAID ITA NOS. 5347 & 4750 /DEL /201 4 RAJIV & RAVINDER MAHAJAN 7 ASSE SSMENT YEAR I.E. ASSESSMENT YEAR 2009 - 10 HAS BEEN DELETED BY THE LD. CIT(A) AND THE SAME HAS BEEN ACCEPTED BY THE DEPARTMENT. THEREFORE, THE ADDITION SUSTAINED FOR THE YEAR UNDER CONSIDERATION WAS NOT JUSTIFIED PARTICULARLY WHEN THERE IS NO CHANGE IN THE F ACTS FOR THE YEAR UNDER CONSIDERATION VIS - - VIS THE FACTS INVOLVED IN THE YEAR RELEVANT TO THE ASSESSMENT YEAR 2009 - 10. ACCORDINGLY, THE ADDITION SUSTAINED BY THE LD. CIT(A) IS DELETED. 12 . THE FACTS OF THE CASE OF SH. RAVINDER MAHAJAN IN ITA NO. 4750/DEL /2014 FOR THE ASSESSMENT YEAR 2005 - 06, ARE IDENTICAL AS WERE INVOLVED IN THE CASE OF SH. RAJIV MAHAJAN, NEW DELHI (SUPRA). THEREFORE, FINDINGS GIVEN IN THE FORMER PART OF THIS ORDER SHALL APPLY MUTATIS MUTANDIS. 13 . IN THE RESULT, APPEAL S OF THE ASSESSEE S ARE ALLOWED . (ORDER PRON OUNCED IN THE COURT ON 14 /10 /2016) SD/ - (N. K. SAINI) ACCOUNTANT MEMBER DAT ED: 14 /10 /2016 *SUBODH* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR