VIKRAM KATRE, MUMBAI V. DCIT 17(2), MUMBAI

ITA 6462/MUM/2012

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 3177 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 11 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: F
• Next Hearing Date: 23-07-2014
• Assessment Year: 2009-2010
• Appeal Filed On: 23-10-2012
• Court: TRIBUNAL
• Department Lawyers: A JANAKIRAMAN SHRI RAJE
• Keywords: Salary income; Opportunity of being heard; Principle of natural justice; Revised return
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH F MUMBAI. BEFORE SHRI SHAILENDRA KUMAR YADAV , JUDICIAL MEMBER AND SHRI RAMIT KOCHAR , ACCOUNTANT MEMBER ITA NO 6462 /MUM/201 2 ASSESSMENT YEAR: - 2009 - 10 VIKRAM KATRE 91 KRISHNA BHUVAN SIR BHALCHANDRA ROAD DADAR, MUMBAI - 400 014. VS.` THE DEPUTY COMMISSIONER OF INCOME TAX, 17(2), AAYKAR BHAVAN, MAHARISHI KARVE ROAD MUMBAI 400 020. PAN/GIR NO. AADPK5681N APPELLANT RESPONDENT ORDER PER RAMIT KOCHAR , A CCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER DATED 20.07.2012 OF C OMMISSIONER OF I NCOME T AX (A PPEALS ) (HEREINAFTER CALLED THE CIT(A)) FOR ASSESSMENT YEAR 2009 - 10. THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ASSESSE E BY SHRI SANDESH DESAI & A JANAKIRAMAN REVENUE BY SHRI RAJESH RANJAN DATE OF HEARING 1 0 .09.2015 DATE OF PRONOUNCEMENT 28 .09.2015 ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 2 | P A G E 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEAL) CONFIRMING THE ADDITION O F RS.76,57,548 TOWARDS INCOME FROM LONG TERM CAPITAL GAINS IN THE HANDS OF THE APPELLANT. THE COMMISSIONER (APPEALS) FAILED TO APPRECIATE THAT; A. THE PROPERTY IN CONSIDERATION WAS NOT OWNED BY THE APPELLANT BUT BELONGED TO MLS MARINE CONTAINER SERVICES, A PARTNERSHIP FIRM IN WHICH THE APPELLANT WAS A PARTNER. B. THE PAYMENT FOR THE PURCHASE OF THE CAPTIONED PROPERTY HAS BEEN MADE FROM THE BOOKS OF THE SAID FIRM AND HAS BEEN DISCLOSED BY THE SAID FIRM IN ITS BOOKS OF ACCOUNTS AND BALANCE SHEET AS THEIR ASSET. C. THE SALE AND CAPITAL GAINS THEREOF HAS BEEN DISCLOSED IN THEIR INCOME TAX RETURN OF THE SAID FIRM AND HAS BEEN ASSESSED UNDER SECTION 143(3) IN THE HANDS OF THE FIRM. 2. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AN D IN LAW THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN TREATING A SINGLE COMBINED HOUSE AS TWO DISTINCT PROPERTIES AND THEREBY TAXED THE NOTIONAL INCOME FROM HOUSE PROPERTY FOR A SUM OF RS. 1,80,000. THE ASSESSING OFFICER ALSO MADE AN AD HOC AD DITION OF RS. 1,80,000 AS ANNUAL RENTAL VALUE WHICH IS HIGHLY EXCESSIVE. 2. THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED ITS RETURN OF INCOME ON 24.11.2009, DECLARING A TOTAL INCOME OF RS. 41,04,689 / - . THE CASE WAS SELECTED IN SCRUTINY IN CASS. THE ASSESSEE IS HAVING SALARY INCOME AND INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SOURCES . DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASKED TO EXPLAIN WHY HE HAS NOT REFLECTED THE C APITAL GAIN ARISING FROM SALE OF PROPERTY. THE ASSESSEE EXPLAINED THAT THE AGRICULTURAL LAND BEING GUT NO 405 IN VILLAGE BHUKUM , TALUKA MULSHI , DISTRICT PUNE, MAHARASHTRA WAS SOLD WHICH IS OWNED BY THE PARTNERSHIP FIRM MARINE CONTAINER SERVICES (HEREINA FTER ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 3 | P A G E CALLED MCS) OF WHICH THE ASSESSEE IS PARTNER AND SINCE THE SAID AGRICULTURAL LAND CANNOT BE HELD IN THE NAME OF THE PARTNERSHIP FIRM AS PARTNERSHIP FIRM IS NOT SEPARATE LEGAL ENTITY , THE SAME IS REGISTERED IN THE NAME OF THE ASSESSEE BEING PARTNER OF THE MCS ON BEHALF OF MCS ALTHOUGH THE MCS IS OWNER OF THE SAID AGRICULTURAL LAND AND THE AGRICULTURAL LAND IS DULY APPEARING IN THE BOOKS OF ACCOUNTS OF THE SAID MCS . THE ASSESSEE SUBMITTED THAT THE PURCHASE CONSIDERATION FOR PURCHASE OF THIS AGRICULTURAL LAND WAS PAID OUT OF THE FUNDS OF THE MCS . THE ASSESSEE SUBMITTED THAT HE EXECUTED BOTH PURCHASE AND SALE DOCUMENTS WITH RESPECT TO THIS AGRICULTURAL LAND AND SINCE THE AGRICULTUR AL LAND IS EXISTING IN THE NAME OF THE ASSESSEE , THE BUYER INSISTED ON DRAWING THE CHEQUE FOR SALE CONSIDERATION IN THE NAME OF THE ASSESSEE. THE PROCEEDS OF SALE HAVE BEEN ENDORSED TO MCS AND CREDITED IN THE BANK ACCOUNTS OF THE MCS . THE ASSESSEE ALSO SUBMITTED THE BANK ACCOUNT OF MCS WHEREBY SALE PROCEEDS OF THE SAID LAND WAS CREDITED . THE ASSESSEE ALSO SUBMITTED THE COPY OF REVISED COMPUTATION OF INCOME FILED BY THE MCS DURING ASSESSMENT PROCEEDINGS OF MCS U/S 143(2) READ WITH SECTION 143(3) OF THE ACT DECLARING THE CAPITAL GAIN ON SALE OF SAID AGRICULTURAL LAND AS INCOME OF MCS . THE ASSESSING OFFICER AFTER CONSIDERING THE REPLY OF THE ASSESSEE HELD THAT THE SAID LAND IS REGISTERED IN THE NAME OF THE ASSESSEE AND HAS BEEN SOLD BY THE ASSESSEE AND T HE ASSESSEE IS THE OWNER OF THE SAID LAND LIABLE TO PAY TAX. THE ASSESSING OFFICER ALSO HELD THAT THE AGRICULTURAL PROPERTY CANNOT BE HELD BY THE FIRM AS PER LAWS IN MAHARASHTRA AND HENCE, HE HELD THAT THE CAPITAL GAIN OF RS. 76,57,948/ - IS CHARGEABLE TO T AX IN THE HANDS OF THE ASSESSEE. ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 4 | P A G E 3. AGGRIEVED, THE ASSESSEE FILED ITS FIRST APPEAL BEFORE THE CIT ( A) AND REITERATED THE SUBMISSIONS AS MADE BEFORE THE ASSESSING OFFICER . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE CIT ( A) REJECTED THE CONTENT ION OF THE ASSESSEE ON THE FOLLOWING REASONS: - 1. THE ACTUAL AGREEMENT OF SALE OF THE LAND IS CONCLUDED IN THE NAME OF THE APPELLANT. THE SALE DEED DATED 14.11.2008 MENTIONS THE NAME OF THE APPELLANT AS VENDOR. THERE IS NO MENTION OF THE NAME OF THE FIRM. THE PAN OF THE APPELLANT HAS BEEN MENTIONED. 2. H AD IT BEEN A SALE .BETWEEN FIRM AND THE PURCHASER, FIRM WOULD HAVE APPEARED AS A CONFIRMING PARTY. NO SUCH THING HAS HAPPENED. 3. THE CLAIM OF THE APPELLANT THAT THE SALE PROCEEDS HAVE BEEN ENDORSED TO THE FIRM WILL NOT MAKE ANY MATERIAL DIFFERENCE. THE P ROCEEDS GIVEN TO THE FIRM WILL INCREASE THE CAPITAL BALANCE OF. PARTNER. 4. AN IMPORTANT THING TO OBSERVE IS THAT THE LAND SOLD IS AN AGRICULTURAL LAND. IT CANNOT BE ACQUIRED BY A FIRM. IT CAN ONLY BE ACQUIRED BY AN AGRICULTURIST AND HA S TO BE SOLD TO AN AGRICULTURIST. WHEN LEGALLY, FIRM CANNOT ACQUIRE THE LAND ITSELF IN MAHARASHTRA, IT CAN NEITHER BE AN OWNER NOR CAN BE A SELLER. FINANCING THE ACQUISITION WILL NOT MAKE THE FIRM OWNER OF THE LAND. HENCE APPELLANT IS THE ACTUAL OWNER OF THE LAND AND ALSO IS THE SELLER. 5. APPELLANT HAS ARGUED THAT LAND WAS ACQUIRED BY THE FIRM AND PAYMENTS WERE MADE BY THE FIRM, MARINE CONTAINER SERVICE. IT IS CLAIMED THAT IT APPEARS IN THE BALANCE SHEET OF THE FIRM. FROM THE PERUSAL OF DETAILS I FIND THERE IS NO SEPARATE L ISTING OF THE ALLEGED LAND AND THERE IS NO CONCLUSIVE PROOF THAT IT WAS ACQUIRED AND HELD BY THE FIRM M/S. MARINE CONTAINER SERVICES. 6. THE ASSESSING OFFICER HAS ALSO POINTED OUT THAT THE SO CALLED LONG TERM CAPITAL GAIN WAS NOT DISCLOSED BY THE FIRM, M/ S. MARINE CONTAINER SERVICES IN ITS ORIGINAL RETURN OF INCOME FILE D ON 26.9.2009. AFTER THE SCRUTINY PROCEEDINGS INITIATED IN THE HANDS OF THE APPELLANT A REVISED RETURN OF THE FIRM WAS FILED ON 8.11.2011 DISCLOSING THIS CAPITAL GAIN. HENCE I FIND THAT TH ERE WAS NO DISCLOSURE OF CAPITAL GAIN EVEN IN THE HANDS OF THE FIRM, M/S. MARINE CONTAINER SERVICES. ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 5 | P A G E 7. THE ASSESSING OFFICER HAS RIGHTLY POINTED OUT THAT THERE WAS NO EVIDENCE OF ANY AUTHORIZATION BY THE FIRM AUTHORIZING THE PARTNER TO BUY OR SELL LAND I N ITS NAME. IT CANNOT BE INDEPENDENT ACTIVITY OF A SINGLE MEMBER OR PARTNER. THE CIT(A) HELD THAT THE SAID LONG TERM CAPITAL GAIN OF RS.76,57,948/ - IS CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE AS HELD BY THE ASSESSING OFFICER . 4. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 5. BEFORE US, THE ASSESSEE REITERATED ITS SUBMISSIONS AS MADE BEFORE AUTHORITIES BELOW AND CONTENDED THAT THE SAID AGRICULTURAL LAND WAS REGISTERED IN THE NAME OF THE ASSESSEE ALTHOUGH IT IS OWNED BY THE PARTNERSHIP FIRM , MCS . THE ASSESSEE SUBMITTED THAT IT IS REGISTERED IN THE NAME OF THE ASSESSEE AS IT CANNOT BE REGISTERED IN THE NAME OF A FIRM AS PER LAW OF MAHARASHTRA STATE. THE ASSESSEE PRODUCED BEFORE US THE DETAILS OF F IXED ASSETS OWNED BY MCS TO CONTEND THAT THE SAID AGRICULTURAL LAND IS APPEARING IN THE BOOKS OF MCS SINCE ITS ACQUISITION IN 2006. THE ASSESSEE SUBMITTED THAT T HE SAID LAND HAS BEEN SOLD DURING THE YEAR FOR RS100 LACS FOR WHICH NECESSARY SALE DOCUMENTS AR E PRODUCED BEFORE US . THE ASSESSEE CONTENED THAT THE SALE P ROCEEDS HAVE BEEN RECEIVED BY THE ASSESSEE AND ENDORSED TO MCS AND CREDITED IN THE BANK ACCOUNT OF MCS . THE ASSESSEE HAS PRODUCED BEFORE US THE BANK STATEMENT OF CANARA BANK BEARING CURRENT ACCOUNT NUMBER 1879201000076 OF THE SAID PARTNERSHIP FIRM MCS WHERE THE SALE PROCEEDS ENDORSED BY THE ASSESSEE ARE CREDITED. THE ASSESSEE PRODUCED BEFORE US THE PARTNERSHIP DEED DATED 5 TH OCTOBER 1992 OF MCS ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 6 | P A G E WHEREIN THE ASSESSEE WAS STATED TO BE ONE OF THE PARTN ERS OF MCS . THE FIRM , MCS HAS VIDE REVISED COMPUTATION OF INCOME DULY DECLARED THE CAPITAL GAIN ON THE SALE OF AGRICULTURAL LAND AND PAID DUE TAXES TO THE REVENUE . THE ASSESSEE PRODUCED BEFORE US THE COPY OF REVISED COMPUTATION OF INCOME OF THE FIRM MCS FILED WITH REVENUE WHERE THE SAID CAPITAL GAIN OF RS.80,00,000/ - IS DULY INCLUDED BY MCS. THE ASSESSEE PRODUCED BEFORE US THE ASSESSMENT ORDER U/S 143(3) OF THE ACT DATED 09 TH DECEMBER 2011 PASSED BY THE DEPUTY COMMISSIONER OF INCOME TAX, 12(2), MUMBAI IN THE CASE OF PARTNERSHIP FIRM MCS WHEREBY THERE IS SPECIFIC MENTION OF THE FILING OF REVISED COMPUTATION OF INCOME BY MCS TO DECLARE CAPITAL GAIN ON SALE OF THE SAID AGRICULTUR AL LAND OF RS.80,00,000/ - WHICH WAS NOT DECLARED BY MCS IN THE ORIGINAL RETURN FILED WITH REVENUE BUT WAS LATER DECLARED VIA REVISED COMPUTATION OF INCOME FILED WITH REVENUE DURING SCRUTINY PROCEEDINGS U/S 143(3) OF THE ACT READ WITH SECTION 143(2) OF THE ACT . THE ASSESSEE CONTENDED THAT T HE REVENUE IS NOT PREJUDICE BECAUSE ALL THE DUE TAXES RELATING TO INCOME ARISING AS CAPITAL GAIN FROM THE SALE OF THE SAID AGRICULTURAL LAND HAVE BEEN DULY PAID TO THE REVENUE ALTHOUGH BY THE FIRM, MCS. 6. THE LD. DR RELIE D UPON THE ORDERS OF AUTHORITIES BELOW. 7. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE SAID AGRICULTURAL LAND WAS ALTHOUGH REGISTERED IN THE NAME OF THE ASSESSEE BUT THE SAME WAS OWNED BY THE PARTNERSHIP FIRM MCS , THE ASSESSEE BEING PARTNER OF MCS . THE SALE PROCEED OF THE SAID LAND WAS DULY DEPOSITED IN THE BANK ACCOUNT OF ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 7 | P A G E THE FIRM,MCS AND THE DUE TAXES ON CAPITAL GAIN ARISING FROM THE SALE OF THE SAID AGRICULTURAL LAND BEING G UT NO 405 IN VILLAGE BHUKUM , TALUKA MULSHI , DISTRICT PUNE, MAHARASHTRA HAVE BEEN DULY PAID TO REVENUE ALBEIT BY THE PARTNERSHIP FIRM M/S MARINE CONTAINER SERVICES ALTHOUGH IT WAS TECHNICALLY REGISTERED IN THE NAME OF THE ASSESSEE . THUS, IN NUT SHELL, THE ASSESSEE HAS BROUGHT ON RECORD COGENT MATERIAL TO SUBSTANTIATE HIS CONTENTIONS THAT THE CAPITAL GAIN ARISING THEREOF FROM SALE OF THE SAID AGRICULTURAL LAND IS CHARGEABLE TO TAX IN THE HANDS OF THE PARTNERSHIP FIRM MCS AND THE SAID FIRM HAS DULY INCLUDED THE SAID CAPITAL GAIN IN THE INCOME CHARGEABLE TO TAX AND PAID DUE TAXES TO THE REVENUE. WE HAVE OBSERVED THAT N O PREJUDICE HAS BEEN CAUSED TO THE REVENUE AS THE REVENUE HAS GOT THE DUE TAXES ALTHOUGH THE SAME HAS BEEN PAID BY THE PARTNERSHIP FIRM MCS AND THE CASE OF MCS WAS ALSO PROCESSED BY THE REVENUE UNDER SCRUTINY U/S 143(2) READ WITH SECTION 143(3) OF THE ACT WHERE BY THE ASSESSING OFFICER OF THE MCS HAS DULY MENTIONED ABOUT THE INCLUSION OF AFORE - STATED INCOME FROM CAPITAL GAIN OF RS.80 LACS EARNED BY MCS IN THE TOTAL ASSESSED INCOME OF MCS FOR ASSESSMENT YEAR 2009 - 10 . ACCORDINGLY, WE DELETE THE ADDITION OF RS.76,57,948/ - AS MADE BY THE ASSESSING OFFICER AND AS CONFIRMED BY CIT(A). WE ORDER ACCORDINGLY. 8. GROUND NO. 2 IS REGARDING ESTIMATION OF RS. 1,80,000/ - BY THE ASSESSING OFFICER ON ACCOUNT OF ANNUAL RENTAL VALUE OF HOUSE PROPERTY ON NOTIONAL BASIS BY TREATING A SINGLE COMBINED UNIT AS TWO DISTINCT PROPERTIES. 9. THE FA C TS OF CASE ARE THAT ASSESSEE IS OWNER OF TWO ADJOINING FLATS BEARING NO. 1502 AND ANOTHER FLAT BEARING NO. 1503, SITUATED AT 15 TH FLOOR IN ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 8 | P A G E THE BUILDING KNOWN AS ROSE , PLOT NO 10, KHARGHAR, NAVI MUMBAI . THE ASSESSEE HAS CLAIMED INTEREST PAID ON THE HOUSING LOAN OF RS. 1,50,000/ - AS LOSS UNDER THE INCOME FROM HOUSE PROPERTY. DURING ASSESSMENT PROCEEDINGS, T HE ASSESSEE WAS SHOW - CAUSED BY THE ASSESSING OFFICER WHY THE ASSESSEE HAS NOT DECLARED THE INCOME FROM ONE SELF OCCUPIED PROPERTY UNDER THE HEAD INCOME FROM HOUSE PROPERTY WHILE FOR THE OTHER PROPERTY, THE ASSESSEE IS ENTITLED TO CLAIM THE ANNUAL LETTABLE VALUE AS NIL UNDER THE HEAD INCOME FROM HOUSE PROPERTY U/S 23 OF THE ACT . THE A SESSEE SUBMITTED THAT THE ASSESSEE IS OWNING AND OCCUPYING THESE TWO PROPERTIES WHICH ARE ADJOINING F LATS IN THE SAME BUILDING . THE ASSESSEE SUBMITTED THAT THE ASSESSEE HAS BORROWED THE FUND S FROM CANARA BANK OF RS. 50,00,000/ - FOR PURCHASE OF THESE TWO FLATS BEARING NO. 1502 AND ANOTHER FLAT BEARING NO. 1503, SITUATED AT 15 TH FLOOR IN THE BUILDING KNOWN AS ROSE , PLOT NO 10, KHARGHAR, NAVI MUMBAI . THE ASSESSING OFFICER HELD THAT THE ASSE S SEE IS ENTITLED FOR EXEMPTION IN RESPECT OF ONE HO U SE PROPERTY WHICH IS USED FOR HIS RESIDENTIAL PURPOSES WHEREBY ANNUAL LETTABLE VALUE SHALL BE DETERMINED AS NIL UNDE R THE HEAD INCOME FROM HOUSE PROPERTY AS PER SECTION 23 OF THE ACT . IN RESPECT OF THE OTHER PROPERTY, HOWEVER, THE INCOME BEING ANNUAL LETTABLE VALUE HAS TO BE BROUGHT TO TAX AS PER SECTION 23 OF THE ACT UNDER THE HEAD INCOME FROM HOUSE PROPERTY. HEN CE, THE ASSESSING OFFICER BROUGHT THE NOTIONAL RENT TO TAX AT THE RATE OF RS. 15,000 PER MONTH AND BROUGHT TO TAX RS. 1,80,000/ - AS INCOME FROM HOUSE PROPERTY. THE ASSESSING OFFICER , HOWEVER, ALLOWED THE BENEFIT OF STATUTORY DEDUCTION FOR REPAIR AND ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 9 | P A G E MAINTENANCE U/S 24 OF THE ACT AND ALSO OF THE INTEREST OF RS.1,50,000.00 PAID TO THE BANK FOR BORROWING FOR ACQUISITION OF FLAT. 10. AGGRIEVED THE ASSESSEE CARRIED THE MATTER IN APPEAL BEF ORE CIT(A) AND REITERATED ITS SUBMISSIONS. THE CIT(A) HELD THAT THE ASSESSEE CAN TREAT ONLY ONE FLAT AS SELF OCCUPIED OUT OF THE TWO FLATS AS PER PROVISIONS OF S ECTION 23 OF THE ACT AND THE ASSESSING OFFICER HAS RIGHTLY BROUGHT TO TAX BY TREATING THE SECON D FLAT AS DEEMED TO BE LET OUT. 11. AGGRIEVED BY THE ORDER OF CIT(A), THE ASSESSEE IS IN APPEAL BEFORE US. 12. THE ASSESSEE REITERATED ITS SUBMISSIONS AND CONTENDED THAT THESE ARE TWO ADJOINING FLATS AND THEY ARE SELF OCCUPIED FOR RESIDENTIAL PURPOSES . T HE ASSESSEE CONTENDED THAT THE AUTHORITIES BELOW HAVE WRONGLY BROUGHT TO TAX INCOME FROM HOUSE PROPERTY WHIL E BOTH THE FLATS ARE ADJOINING AND ARE USED AS COMBINED FLATS USED FOR RESIDENTIAL PURPOSES OF THE ASSESSEE. 13. THE LD. DR RELIED UPON THE ORDERS O F AUTHORITIES BELOW. 14. WE HAVE HEARD THE RIVAL CONTENTIONS AND CAREFULLY PERUSED THE RELEVANT MATERIAL ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE IS THE OWNER OF TWO ADJOINING FLATS WHICH ARE USED FOR RESIDENTIAL PURPOSES , THE ASSESSEE IS ENTITLED FO R EXEMPTION U/S 23 OF THE ACT WITH RESPECT TO ONE FLAT WHILE THE SECOND FLAT SHALL BE CHARGEABLE TO TAX AS PER PROVISIONS OF SECTION 23 OF THE ACT. WE HAVE ALSO OBSERVED THAT THE ASSESSING OFFICER HAS BROUGHT TO TAX INCOME FROM HOUSE PROPERTY ON AD - HOC BASIS WITHOUT BRINGING ON RECORD ANY C OGENT EVIDENCE AS TO THE PREVAILING MARKET RENT IN THE AREA FOR ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 10 | P A G E WHICH THE PROPERTY IS REASONABLY EXPECTED TO BE LET OUT AS PER MANDATE OF SECTION 23 OF THE ACT . HENCE, WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER TO DETERMINE THE ANNUAL LETTABLE VALUE BEING INCOME FROM HOUSE PROPERTY WITH RESPECT TO ONE FLAT BASED UPON THE COGENT EVIDENCE. NEEDLESS TO MENTION, THE ASSESSING OFFICER SHALL ALLOW THE ASSESSEE A REASONABLE OPPORTUNITY OF BEING HEARD IN ACCORDANCE WITH THE PRINCIPLES OF NATURAL JUSTICE AS ENSHRINED IN THE DOCTRINE OF AUDI ALTERAM PARTEM . BEFORE COMPUTING ANNUAL LETTABLE VALUE OF ONE FLAT AS PER SECTION 23 OF THE ACT WE ORDER ACCORDINGLY. 15. IN THE RESULT APPEAL OF THE ASSESSEE IS P ARTLY ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 2 8 T H DAY OF SEPTEMBER 2015. S D / - S D / - (SHAILENDRA KUMAR YADAV) ( RAMIT KOCHAR ) (JUDICIAL MEMBER) (ACCOUNTANT MEMBER) MUMBAI DATED 2 8 - 09 - 2015 SKS SR. P.S ITA NO 6462/MUM/2012 ASSESSMENT YEAR: - 2009 - 10 11 | P A G E COPY TO: THE APPELLANT THE RESPONDENT THE CONCERNED CIT(A) THE CONCERNED CIT THE DR, G BENCH, ITAT, MUMBAI BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCHES, MUMBAI