Sh. Avtar Mohan Bahal, New Delhi V. ITO, New Delhi

ITA 6580/DEL/2016

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3072 (ITAT-DELHI)
• Duration Of Justice: 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-06-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 07-06-2017
• Assessment Year: 2007-2008
• Appeal Filed On: 26-12-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : SMC : NEW DELHI BEFORE SHRI R.S. SYAL, VICE PRESIDENT ITA NO.6580/DEL/2016 ASSESSMENT YEAR : 2007-08 AVTAR MOHAN BAHAL, 164, FIRST FLOOR, JOR BAGH, NEW DELHI. PAN: AAFPB7067D VS. ITO, WARD-72(3), NEW DELHI. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI P.N. MEHTA, ADVOCATE DEPTT. BY : SHRI AMRIT LAL, SR.DR DATE OF HEARING : 07.06.2017 DATE OF PRONOUNCEMENT: 08.06.2017 ORDER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER PASSED BY THE CIT(A) ON 28.04.2015 IN RELATION TO THE ASSESSMENT YEAR 2007-08. 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE THAT T HE ASSESSEE DID NOT DECLARE ANY INCOME FROM HOUSE PROPERTY. THE ASSESS ING OFFICER OBSERVED THAT THE ASSESSEE WAS IN POSSESSION OF THE FOLLOWIN G THREE PROPERTIES:- ITA NO.6580/DEL/2016 2 I) FLAT NO.83, BLOCK G, SECTOR-18, ROHINI, DELHI 11 0085 IN DATA RAM CO-OPERATIVE GROUP HOUSING SOCIETY LTD. ALLOTTED ON 27 TH OCTOBER, 2002. II) HOUSE NO.35/22, SECOND FLOOR, NETA JI MARG, KEW AL PARK, DELHI 110033. III) FLAT NO.JC 1, FIRST FLOOR, KHIRKI EXTENSION, M ALVIYA NAGAR, NEW DELHI PURCHASED IN AUGUST 2004. 4. ON BEING CALLED UPON TO EXPLAIN AS TO WHY RENTAL INCOME WAS NOT OFFERED FROM THE SAID PROPERTIES, THE ASSESSEE TEND ERED THE FOLLOWING EXPLANATION:- I) FLAT NO.83, BLOCK G, SECTOR-18, ROHINI, DELHI 11008 5 IN DATA RAM CO-OPERATIVE GROUP HOUSING SOCIETY LTD., ROHINI, DE LHI. AS ALREADY CLARIFIED IN MY LETTER DATED 2 ND JULY, 2014 DURING THE PERIOD APRIL, 2006-MARCH, 2007, THIS FLAT WAS LYING INCOMP LETE AND WAS IN A SHELL STATE, WITH WALLS AND FLOORS UNPLASTERED WITHOUT AN Y DOORS AND WINDOWS. THUS, NOT IN HABITABLE AS ALL. HENCE, I SUBMIT, IT SHOULD NOT BE ASSESSED FOR ANY RENTAL INCOME ACCRUING TO ME. II) HOUSE NO.35/22, SECOND FLOOR, NETA JI MARG, KEWAL P ARK, DELHI 110033. IN REGARD TO THIS PROPERTY, AS I HAD ALREADY EXPLAI NED IN MY LETTERS DATED 31.05.2011 AND AGAIN IN MY LETTER DATED 23.07.2014 THAT THIS FLAT WAS A SMALL FLAT WITH A TOTAL AREA OF APPROX 41.5 SQ METE R AND WAS IN OCCUPATION OF MY SISTER MS NINA WAHI AND HER HUSBAND RAM WAHI EVER SINCE THIS FLAT WAS PURCHASED AS PER SALE DEED DATED 09.11.2005 AND ALSO DURING THE F.Y. 2006-07. THE PREVAILING MONTHLY RENT ASSESSED FOR THE PERIOD APRIL, 2006 MARCH, 2007 APPEARS TO BE FAR TOO HIGH SINCE THE FL AT WAS FAR TOO SMALL AND KEWAL PARK WAS THEN NOT FULLY DEVELOPED AREA. ITA NO.6580/DEL/2016 3 III) FLAT NO.JC 1, FIRST FLOOR, KHIRKI EXTENSION, MALVIY A NAGAR, NEW DELHI. LIKEWISE AS CLARIFIED IN MY LETTER DATED 31.05.2011 THIS FLAT WAS PURCHASED IN AUGUST, 2004 WITH A SMALL AREA OF APPROX 250 SQ FT CONSISTING OF TWO ROOMS AND HAD BEEN IN OCCUPATION OF MY BROTHER MR. SURESH BAHAL EVER SINCE THIS FLAT WAS ACQUIRED IN AUGUST, 2004. MY B ROTHER, MR. SURESH BAHAL WAS LIVING IN THIS FLAT DURING THE PERIOD APRIL, 20 06 MARCH, 2007. HERE AGAIN, I WISH TO STATE THAT THE THEN PREVAILIN G MARKET MONTHLY RENT DURING THE PERIOD (APRIL, 2006 MARCH, 2007) MENTI ONED APPEARS TO HAVE BEEN HIGHLY INFLATED AND VERY MUCH ON THE HIGH SIDE CONSIDERING THE TYPE OF THE FLAT AND ALSO SINCE THIS AREA WAS UNDER-DEVELOP ED. 5. NOT CONVINCED WITH THE ASSESSEES SUBMISSIONS, T HE ASSESSING OFFICER ESTIMATED NOTIONAL RENT BY CONSIDERING THE PREVAILI NG MARKET RENT AS UNDER:- (I) RS.1,20,000 P.A (RS.10,000 P.M.) FOR FLAT IN D ATA RAM SOCIETY, ROHINI. (II) RS.84,000 P.A. (RS.7,000 P.M.) FOR NETA JI MAR G, KEWAL PARK. (III) RS.1,20,000 P.A. (RS.10,000 P.M) FOR KHIRKI E XTN., MALVIYA NAGAR, NEW DELHI. 6. THAT IS HOW INCOME FROM THE HOUSE PROPERTY WAS C OMPUTED AT RS.2,26,800/- AFTER STANDARD DEDUCTION. 7. THE LD. CIT(A) UPHELD THE ACTION OF THE ASSESSIN G OFFICER IN ESTIMATING THE RENT IN RESPECT OF THREE PROPERTIES. HOWEVER, ONE OF THE PROPERTIES, NAMELY, ROHINI PROPERTY, WAS ALLOWED AS SELF OCCUPIED AND IT ITA NO.6580/DEL/2016 4 WAS DIRECTED THAT THE ANNUAL LETTING VALUE OF THE O THER TWO PROPERTIES BE CONSIDERED FOR DETERMINING THE HOUSE PROPERTY INCOM E. THE ASSESSEE IS AGGRIEVED. 8. I HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED T HE RELEVANT MATERIAL ON RECORD. IN SO FAR AS THE ROHINI PROPERTY IS CON CERNED, IT IS SEEN THAT THE ASSESSEE FURNISHED EVIDENCE THAT THE ELECTRICITY CO NNECTION WAS INSTALLED IN THE YEAR 2013 AND, DURING THE YEAR UNDER CONSIDERAT ION, NAMELY, FINANCIAL YEAR 2006-07, THE FLAT WAS INCOMPLETE AND LYING IN A SHELL STATE. WHEN A PROPERTY IS ITSELF, ADMITTEDLY, INCOMPLETE AND NOT IN A HABITABLE STATE, IT CANNOT BE CONSTRUED AS SELF OCCUPIED PROPERTY FOR T HE PURPOSE OF DETERMINING INCOME UNDER THE HEAD INCOME FROM HOUS E PROPERTY. ON EXCLUDING THIS PROPERTY, THERE REMAINS OTHER TWO PR OPERTIES, NAMELY, HOUSE AT MALVIYA NAGAR AND HOUSE AT KEWAL PARK, DELHI. O NE OF THESE PROPERTIES, AT THE OPTION OF THE ASSESSEE IS TO BE CONSIDERED A S SELF OCCUPIED PROPERTY. THE ANNUAL LETTING VALUE OF THE REMAINING THIRD PRO PERTY IS TO BE CONSIDERED FOR THE PURPOSE OF CHARGEABILITY UNDER THE HEAD IN COME FROM HOUSE PROPERTY. THE ASSESSING OFFICER IS DIRECTED TO COM PUTE THE ANNUAL LETTING VALUE OF THE REMAINING PROPERTY, AS PER LAW, AFTER ALLOWING A REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. ITA NO.6580/DEL/2016 5 9. IN THE RESULT, THE APPEAL FILED BY THE ASS ESSEE IS ALLOWED FOR STATISTICAL PURPOSES. THE DECISION WAS PRONOUNCED IN THE OPEN COURT ON 0 8 TH JUNE, 2017. SD/- (R.S. SYAL) VICE PRESIDENT DATED: 08 TH JUNE, 2017. DK COPY FORWARDED TO 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR DY. REGISTRAR, ITAT, NEW DELHI