AKBAR HASNALI PADAMSEE, MUMBAI V. ACIT-18(2), MUMBAI , MUMBAI

ITA 6162/MUM/2019

• Counselvise Citation: [2022] 105 COUNSELVISE.COM (IT) 7995 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 4 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-02-2022
• Appeal Filed By: Assessee
• Order Result: PartlyAllowed
• Bench Allotted: A
• Assessment Year: 2011-2012
• Appeal Filed On: 29-09-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: ISHWER RATHI
• Keywords: TDS
• Section: 142(1); 80G; 143(1); 195; 143(2)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI S. RIFAUR RAHMAN, AM AND SHRI AMARJIT SINGH, JM आयकर अपील सं/ I.T.A. Nos. 6162 to 6166/Mum/2019 (निर्धारण वर्ा / Assessment Years: 2011-12 to 2015-16) Akbar Hasanali Padamsee 802, Vinayak Aagan CHS Ltd, Old Prabhadevi Road, Worli, Mumbai-400025. बिधम/ Vs. Joint Commissioner of Income Tax-18(2) Piramal Chambers, Parel, Mumbai-400012. स्थायी लेखा सं./जीआइआर सं./PAN/GIR No. : AHFPP9512N (अपीलाथी /Appellant) .. (प्रत्यथी / Respondent) सुनवाई की तारीख / Date of Hearing: 12/01/2022 घोषणा की तारीख /Date of Pronouncement: 25/02/2022 आदेश / O R D E R PER AMARJIT SINGH, JM: The assessee has filed the above mentioned appeals against the order dated 28.06.2019 passed by the Commissioner of Income Tax (Appeals) -33, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Ys. 2011- 12 to 2015-16. ITA. NO.6162/Mum/2019 2. The assessee has filed the present appeal against the order dated 28.06.2019 passed by the Commissioner of Income Tax (Appeals) -33, Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the A.Y.2011- 12. Assessee by: Shri Ishwer Rathi Revenue by: Shri Mehul Jain (DR) ITA Nos. 6162 to 6166/M/2019 A.Ys.2011-12 to 2015-16 2 3. The assessee has raised the following grounds: - “1 On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming the annual letting value of flat at Akbar House at Rs.1,62,564/-. 2. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming the annual letting value of flat at 3 rd floor in Piroja Court, Juhu at Rs.5,57,568/-. 3. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in confirming the annual letting value of flat at Hrishikesh Society at Rs.6,60,000/-. 4. In addition to above grounds of appeal no.1 to 3, since the aforesaid properties were vacant for the entire year, the learned AO and CIT(A) have erred in not allowing vacancy allowance as per the provisions of Income Tax Act, 1961. 5. On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in ignoring the submissions of the appellant stating that the facts of AY 2011-12 were similar to the AY 2010-11 and therefore, erred in not following the ruling of the Hon’ble Mumbai ITAT in the case of the appellant for AY 2010-11 (in ITA. No.6169/Mum/2016) wherein it was held that the Municipal ratable value was rightly adopted by the assessee for determining annual letting value of the flat and the AO was further directed to allow vacancy allowance as per the provisions of the Act.” 3. The brief facts of the case are that the assessee filed its return of income on 09.11.2011 declaring total income to the tune of Rs.5,73,85,120/- ITA Nos. 6162 to 6166/M/2019 A.Ys.2011-12 to 2015-16 3 for the A.Y.2011-12. The return was processed u/s 143(1) of the Act. Thereafter, the case was selected for scrutiny under CASS. Notices u/s 143(2) & 142(1) of the Act were issued and served upon the assessee. During the year under consideration, the assessee has showed the income from house property, Business & Profession and other sources for which details and supporting evidences were filed. The assessee is a renowned painters and engaged in the selling of paintings, drawing, sculptures, graphic, computer graphics etc, There was a difference of commission expenses as per TDS certificate of Rs.28,69,118/- while commission charged as per books is Rs.28,68,592/-. No explanation was offered by the assessee, therefore, an amount of Rs.526/- was added to the income of the assessee. The assessee has wrongly claimed the 80G deduction to the extent of Rs.90/-, therefore, the same was also added to the income of the assessee. The Travelling Expenses in sum of Rs.7,301/- was also disallowed on account of no explanation and added to the income of the assessee. The assessee was having seven properties in the year and assessee offered four properties for the income for taxation purposes. The details are hereby mentioned below: - S. No. Particulars of House Property Status Rent Offered 1 Akbar House, Mumbai Vacant 6,082/- 2 Goa Flat Vacant 16,000/- 3 Piroja Court, Juhu (6 th Floor) Business purpose NIL 4 Piroja Court, Juhu (3 rd floor) Vacant 2,061/- 5 Banglore flat Rented 2,04,750/- 6 Hrishikesh Apartment, Mumbai Vacant 19,392/- ITA Nos. 6162 to 6166/M/2019 A.Ys.2011-12 to 2015-16 4 7 Vinayak Angan, Mumbai SOP NIL The valuation adopted by the assessee was very low, therefore, show cause notice was issued and the AO ignoring the municipal letting value, assessed the Annual Letting Value in connection with the Hrishikesh Co-operative Housing Society to the tune of Rs.55,000 per month i.e. 6,60,000/- per annum and assessed the Annual Letting Value of Rs.13,547 per month i.e. 1,62,564/- per annum in connection with the house property at Akbar House and also assessed the Annual Letting Value of house property at Piroja Court, Juhu @ 46,464/- per month i.e. 5,57,568/- per annum. Accordingly, the income from house property was determined @ to the tune of Rs.9,46,659/-. The total income was assessed to the tune of Rs.9,46,659/-. The total income of the assessee was assessed to the tune of Rs.5,83,39,694/-. Feeling aggrieved, the assessee has filed an appeal before the CIT(A) who dismissed the appeal of the assessee, therefore, the assessee has filed the present appeal before us. ISSUE NO.1 to 3 5. All the issues are in connection with the assessing the Annual Letting Value of flat at Akbar House at Rs.1,62,564/- per month and Piroja Court, Juhu at Rs. 46,464/-/- per month and Hrishikesh Society to the tune of Rs.55,000/- per month. The Ld. Representative of the assessee has argued that the issue has duly been covered by the decision of Hon’ble ITAT in the assessee’s own case for the A.Y. 2010-11 bearing ITA. No.6169/Mum/2016 dated 12/04/2019 in which the Hon’ble ITAT has assessed the Annual Letting Value on the basis of Municipal ratable value, therefore, assessing the Annual Letting Value on the basis of Municipal ratable value is quite justifiable and accordingly is liable to be assessed. In support of this contention the Ld. ITA Nos. 6162 to 6166/M/2019 A.Ys.2011-12 to 2015-16 5 Representative of the assessee has placed reliance upon the decision in the case of CIT Vs. Moni Kumar Subba (2011) 10 taxmann.com 195 (Delhi HC). The copy of order dated 12/04/2019 bearing ITA. No. 6169/Mum/2016 for the A.Y. 2010-11 is on the file. The relevant finding is hereby reproduced as under: - “7. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. In respect of the flat at Bangalore there is no dispute that all the facts were before the AO. This is evident from page 3-4 of the assessment order dated 22.03.2013. During the relevant year, the flat was let out partly and was also vacant for the remaining part. As per section 23(1)(b) of the Act, in respect of property which is let out partly and vacant partly, bona fide letting value of such property will be taken to be the annual municipal ratable value or actual rent received whichever is earlier. Since in the above case, the rent received by the assessee was higher than the municipal ratable value, the appellant has rightly taken the actual rent received of Rs.27,000/- as annual value of the said property. Therefore, we allow the 1st ground of appeal. In respect of the flat at Piroja Court, Juhu (3rd floor), there is no dispute that all the facts were before the AO. This is evident from page 4 of the assessment order dated 22.03.2013. The said flat was vacant during the year under consideration. Deemed income in respect of the said flat is based on the Municipal ratable value. As per the certificate issued by BMC and the Society, the ratable value of the said flat is Rs.2061/-. There is no basis for adopting a uniform yardstick of 8.5% of the investment to arrive at the ALV as done by the AO in the present case. We find that the Municipal ratable value as adopted by the assessee for determining bona fide letting value of the said flat is a reasonable one. Therefore, the 2nd ground of appeal is allowed. ITA Nos. 6162 to 6166/M/2019 A.Ys.2011-12 to 2015-16 6 In respect of the flat at Hrishikesh, there is no dispute that all the facts were before the AO. This is evident from page 4 of the assessment order dated 22.03.2013. The possession of the said flat was taken during the year under consideration and it was vacant throughout the year. The annual Municipal ratable value as per the Municipal record is Rs.16,852/-. There is no basis for adopting a uniform yardstick of 8.5% of the investment to arrive at the ALV as done by the AO in the present case. We find that the Municipal ratable value as adopted by the assessee for determining bona fide letting value of the said flat is a reasonable one. Therefore, the 3rd ground of appeal is allowed. In view of the above decision, we allow the 4th ground of appeal and direct the AO to allow the vacancy allowance to the assessee as per the provisions of the Act.’ 6. Since the Annual Letting Value on the basis of Municipal ratable value of the mentioned properties have been considered by Hon’ble ITAT, therefore, the following said decision bearing ITA. No. 6169/Mum/2016 for the A.Y. 2010-11(supra) and CIT Vs. Moni Kumar Subba (2011) 10 taxmann.com 195 (Delhi HC), we allowed the claim of the assessee and direct the AO to assess the rent in accordance with Municipal ratable value of the period. ISSUE NO.4 7. Under this issue the assessee has raised the claim of Vacancy allowance as per the provisions of the Act, therefore, we direct the AO to allow the same in accordance with law. ISSUE Nos. 5 & 6 ITA Nos. 6162 to 6166/M/2019 A.Ys.2011-12 to 2015-16 7 8. At the time of argument, these issues have not been pressed by the Ld. Representative of the assessee, therefore, these issues are being decided in favour of the revenue against the assessee being not pressed. ITA. NOs. 6163 to 6166/Mum/2019 7. The facts of the present case are quite similar to the facts of the case as narrated above while deciding in ITA. No.6162/Mum/2019, therefore, there is no need to repeat the same. However, the figure is different. The finding given above while deciding the ITA. No.6162/Mum/2019 is quite applicable to the facts of the present case also as mutatis and mutandis. Accordingly, we partly allowed the appeals of the assessee bearing ITA. Nos.6163 to 6166/Mum/2019 also. 8. In the result, the appeals filed by the assessee are partly allowed. Order pronounced in the open court on 25/02/2022 Sd/- Sd/- (S. RIFAUR RAHMAN) (AMARJIT SINGH) लेखध सदस्य / ACCOUNTANT MEMBER न्यधनिक सदस्य/JUDICIAL MEMBER मुंबई Mumbai; ददनांक Dated : 25/02/2022 Vijay Pal Singh (Sr. PS) ITA Nos. 6162 to 6166/M/2019 A.Ys.2011-12 to 2015-16 8 आदेश की प्रनिनलनि अग्रेनर्ि/Copy of the Order forwarded to : 1. अपीलाथी / The Appellant 2. प्रत्यथी / The Respondent. 3. आयकर आयुक्त(अपील) / The CIT(A)- 4. आयकर आयुक्त / CIT 5. दवभागीय प्रदतदनदध, आयकर अपीलीय अदधकरण, मुंबई / DR, ITAT, Mumbai 6. गार्ड फाईल / Guard file. आदेशधिुसधर/ BY ORDER, सत्यादपत प्रदत //True Copy// उि/सहधिक िंजीकधर /(Dy./Asstt. Registrar) आिकर अिीलीि अनर्करण, मुंबई / ITAT, Mumbai