ASST CIT 16(1), MUMBAI V. MALINI V SETH, MUMBAI

ITA 6457/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 101245 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 10 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-09-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 01-11-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: DR SANTOSH MANKUSKAR
• Assessee Lawyers: ARTI VISSANJI
• Keywords: Fair market value

Judgement Text

, INCOME TAX APPELLATE TRIBUNAL,MUMBAI B BENCH , , BEFORE S/SH. RAJENDRA,ACCOUNTANT MEMBER & SAKTIJIT DEY ,JUDICIAL MEMBER /. ITA NO. 6457/MUM/2013 , / ASSESSMENT YEAR - 2009 - 10 ASSTT. CIT - 16 (1) 2 ND FLOOR, MATRU MANDIR TARDEO ROAD MUMBAI - 400 0 07. VS SMT. MALINI V. SETH FLAT NO.5, SONMARG,67 - B NAPEAN SEA ROAD MUMBAI - 400 0 06 . PAN: AMHPS 7275 A ( / APPELLANT ) ( / RESPONDENT ) /ASSESSEE BY : MS. ARTI VISSANJI / REVENUE BY : DR. SANTOSH MANKUSKAR - DR / DATE OF HEARING : 29 - 09 - 2015 / DATE OF PRONOUNCEMENT : 29 - 09 - 2015 , 1961 254 ( 1 ) ORDER U/S.254(1)OF THE INCOME - TAX ACT,1961(ACT) PER RAJENDRA, AM - CHALLENGING THE ORDER DT.22/08/2013 OF CIT(A) - 27,MUMBAI,THE ASSESSING OFFICER(AO)HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: 1. THE ID. CIT(A) HAS ERRED IN HOLDING THAT THE A.O. HAS MERELY ESTIMATED THE ALV U/S 23(1 )(A) WITHOUT HAVING ANY MATERIAL SUPPORT OF THE SAME AND THE RENT RECEIVED AND OFFERED TO TAX DURING THE YEAR IS HIGHER THAN RATABLE VALUE FIXED BY MUNICIPAL CORPORATIO N. 2. THE ID. CIT(A) HAS FAILED TO APPRECIATE THE DECISION OF HON'BLE ITAT IN THE CASE OF BAKER TECHNICAL SERVICES (P) LTD. VS ITO 9(1 )(2), MUMBAI 125 ITO 1 (MUM) WHICH IS IN FAVOUR OF REVENUE. 3. THE APPELLANT CRAVES LEAVE TO AMEND OR ALTER ANY GR OUND OR ADD A NEW GROUND WHICH MAY BE NECESSARY. THE APPELLANT PRAYS THAT THE ORDER OF THE CIT (A) ON THE ABOVE GROUNDS BE SET ASIDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. ASSESSEE,AN INDIVIDUAL,,DERIVING INCOME FROM HOUSE PROPERTY,BUSINESS,CA PITAL GAINS AND OTHER SOURCES,FILED HER RETURN OF INCOME ON 23.07.2009,DECLARING TOTAL INCOME AT RS.20,13,280/ - . THE AO COMPLETED THE ASSESSMENT ON 20.10.2011,U/S.143(3)OF THE ACT,DETERMINING HER INCOME AT RS. 29,37,110/ - . 2 .EFFECTIVE GROUND OF APPEAL IS ABOUT CALCULATING THE FAIR MARKET VALUE OF THE PROPERTY AS PER THE PROVISIONS OF SECTION 23(1)(A)OF THE ACT.DURING THE COURSE OF HEARING REPRESENTATIVES OF BOTH THE SIDES AGREED THAT THE IDENTICAL ISSUE FOR THE EARLIER AY.S.HAS BEEN DEC IDED AGAINST THE AO BY THE TRIBUNAL. WE FIND THAT WHILE DECIDING THE APPEALS FOR THE AY.S.2002 - 03,2004 - 05 AND 2005 - 06 (ITA/932 - 33/MUM/2011 - DATED 23/05/2014 AND ITA/3869/MUM/11 - DATED 28.03.2012),THE IDENTICAL ISSUE RAISED BY THE AO,HAS BEEN DISMISSED BY THE TRIBUNAL.WE WOULD LIKE TO REPRODUCE THE OPERATIVE PART OF THE ORDER OF THE TRIBUNAL FROM THE ORDER FOR THE AY.2005 - 06(SUPRA)AND SAME READS AS UNDER: ITA/ 6457 /1 3 ,AY. 09 - 10 ,MALINI SETH 2 10. AFTER HEARING ARGUMENTS OF BOTH THE PARTIES, WE ARE OF OPINION THAT THE INTEREST EARNED FROM SECURIT Y DEPOSIT OF RENTED PREMISES EA NU BE MADE A PART OF ANNUAL LETTING VALUE. THE FULL BENCH OF HORI'BLE DELHI HIGH COURT HAS CATEGORICALLY SETTLED THE ISSUE. RELEVANT EXTRACTS OF THE SAME ARE REPRODUCED AS UNDER : - 'THE ABOVE DISCUSSION LEADS TO T HE FOLLOWING CONCLUSION: - (I) ALV WOULD BE THE SUM AT WHICH THE PROPERTY MAY BE REASONABLY LET OUT BY A WILLING LESSOR TO A WILLING LESSEE : UNINFLUENCED BY ANY EXTRANEOUS CIRCUMSTANCES. (II) AN INFLATED OR DEFLATED RENT BASED ON EXTRANEOUS CONSI DERATION MAY TAKE IT OUT OF THE BOUNDS OF REASONABLENESS. (III) ACTUAL RENT RECEIVED, IN NORMAL CIRCUMSTANCES, WOULD BE RELIABLE EVIDENCE UNLESS THE RENT IS INFLATED/ DEFLATED BY REASON OF EXTRANEOUS CONSIDERATION. (IV) SUCH ALV, HOWEVER, CANNO T EXCEED THE STANDARD RENT AS PER THE RENT CONTROL LEGISLATION APPLICABLE TO THE PROPERTY. (V) IF STANDARD RENT HAS NOT BEEN FIXED BY THE RENT CONTROLLER THEN IT IS THE DUTY OF THE ASSESSING OFFICER TO DETERMINE THE STANDARD RENT AS PER THE PROVISIO NS OF RENT CONTROL ENACTMENT (VI) THE STANDARD RENT IS THE UPPER LIMIT, IF THE FAIR RENT IS LESS THAN THE STANDARD RENT, THEN IT IS THE FAIR RENT WHICH SHALL BE TAKEN AS AL V AND NOT THE STANDARD RENT. WE MAY ALSO ADD THAT IN PLACE LIKE DELHI, THIS H AS NOT BECOME REDUNDANT IN AS MUCH AS THE VERY BASIS OF FIXING PROPERTY TAX HAS UNDERGONE A TOTAL CHANGE WITH AMENDMENT OF THE MUNICIPAL LAWS BY THE AMENDMENT ACT, 2003. NOW THE PROPERTY TAX IS ON UNIT METHOD BASIS. . IN THE PRESENT CASE, THE ASSES SING OFFICER ADDED NOT ONLY INTEREST ON THE INTEREST FREE SECURITY FOR ARRIVING AT ANNUAL LETTING VALUE. SINCE THAT WAS NOT PERMISSIBLE, THE EFFECT WOULD BE THAT SUCH ASSESSMENT WAS RIGHTLY SET ASIDE BY THE COMMISSIONER OF INCOME TAX (APPEALS) AND THE TRI BUNAL. THEREFORE, THE ORDERS WOULD NOT CALL FOR ANY INTERFERENCE. THESE APPEALS ARE, THUS, DISMISSED ON THIS GROUND. ONCE WE HOLD THIS, THE VERY BASIS ADOPTED BY THE ASSESSING OFFICER TO FIX ANNUAL LETTING VALUE WAS WRONG AND THEREFORE, NO FURTHER EXE RCISE IN FACT IS REQUIRED BY US IN THESE APPEALS.' 11. IN LIGHT THEREOF, IT IS CLEAR THAT THE INTEREST EARNED FROM SECURITY DEPOSIT CANNOT BE INCLUDED IN THE' ANNUAL LETTING VALUE TO BE DETERMINED BY THE ASSESSING OFFICER. WE ARE OF THE OPINION THAT G ROUND NO.1 RAISED BY THE APPELLANT IN THE INSTANT APPEAL ARE DEVOID OF ANY MERIT. THEREFORE, THE SAME ARE HEREBY REJECTED. RESPECTFULLY,FOLLOWING THE ABOVE ORDER,WE DECIDE THE EFFECTIVE GROUND OF APPEAL AGAINST THE AO. AS A RESULT,APPEAL FILED BY THE AO STANDS DISMISSED. . ORDER PRONOUNCED IN THE OPEN COURT ON 29 TH ,SEPTEMBER,2015. 29 , 2015 SD/ - S D/ - ( / SAKTIJIT DEY ) ( / RAJENDRA) / JUDICIAL MEMBER / ACCOUNTANT MEMBER / MUMBA I, /DATE: 29 .09. 2015 . . . JV . SR.PS. / COPY OF THE ORDER FORWARDED TO : 1. APPELLANT / 2. RESPONDENT / ITA/ 6457 /1 3 ,AY. 09 - 10 ,MALINI SETH 3 3. THE CONCERNED CIT(A)/ , 4. THE CONCERNED CIT / 5. DR A BENCH, ITAT, MUMBAI / , , . . . 6. GUARD FILE/ //TRUE COPY// / BY ORDER, / DY./ASST. REGISTRAR , / ITAT, MUMBAI.