Ms. Priyananki Singh Sood, New Delhi V. ACIT, New Delhi

ITA 6698/DEL/2015

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9823 (ITAT-DELHI)
• Duration Of Justice: 2 year(s) 11 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-12-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 18-12-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHAILESH KUMAR
• Keywords: Salary income

Judgement Text

ITA NO. 6698/DEL/2015 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCHES: G, NEW DELHI BEFORE SHRI N.S. SAINI, ACCOUNTANT MEMBER AND SHRI SMT. BEENA A PILLAI, JUDICIAL MEMBER ITA NO. 6698/DEL/2015 AY: 2012-13 MS. PRIYANANKI SINGH SOOD 2 ND FLOOR, EROS CINEMA BUILDING, JANGPURA EXTENSION, NEW DELHI. PAN NO. AODPS0629C VS . ACIT CIRCLE 52(1) NEW DELHI (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI U.N. MARWAH, CA DEPARTMENT BY : SHRI SHAILESH KUMAR, SR. DR DATE OF HEARING : 11/12/2018 DATE OF PRONOUNCEMENT : 13/12/2018 ORDER PER BEENA A PILLAI, JUDICIAL MEMBER PRESENT APPEAL HAS BEEN FILED BY ASSESSEE AGAINST O RDER DATED 26/10/15 PASSED BY LD.CIT (A)-18, NEW DELHI F OR ASSESSMENT YEAR 2012-13, ON FOLLOWING GROUNDS OF AP PEAL: 1. THE LD.CIT(APPEALS) HAS ERRED IN LAW AND ON FACTS IN CONFIRMING THE ADDITION OF RS. 31,306/- MADE BY EST IMATING THE ANNUL VALUE OF THE COMMERCIAL FLAT AT LAXMI BHA WAN, MADRAS WHILE IGNORING THE FACTS AND SUBMISSIONS OF THE CASE. THUS, THE ADDITION SO MADE SHOULD BE DELETED. 2. THE APPELLANT CRAVES THE LEAVE TO ADD, SUBSTITUTE, MODIFY, DELETE OR AMEND ALL OR ANY GROUND OF APPEAL EITHER BEFORE OR AT THE TIME OF HEARING. 2. BRIEF FACTS OF CASE ARE AS UNDER : ASSESSEE FILED HER RETURN OF INCOME ON 29/09/12 DEC LARING TOTAL INCOME OF RS. 1, 86, 79, 370/-. THE CASE WAS SELECT ED FOR SCRUTINY AND NOTICE UNDER SECTION 143(2) WAS ISSUED ALONG WI TH ITA NO. 6698/DEL/2015 2 QUESTIONNAIRE AND NOTICE UNDER SECTION 142(1). IN R ESPONSE TO THE STATUTORY NOTICES, REPRESENTATIVE OF ASSESSEE APPEA RED BEFORE LD.AO AND FURNISHED REQUIRED DETAILS AS CALLED FOR. 2.1 LD.AO OBSERVED THAT ASSESSEE HAD EARNED INCOME FROM SALARY, HOUSE PROPERTY BUSINESS, CAPITAL GAIN AND O THER SOURCES DURING THE YEAR UNDER CONSIDERATION. IT WAS FURTHER OBSERVED THAT ASSESSEE IN A STATEMENT OF AFFAIRS HAD MENTIONED OW NING OF PROPERTY AT LAXMI BHAWAN, 609, MOUNT ROAD, MADRAS. IT WAS FURTHER OBSERVED THAT NO INCOME FROM THIS HOUSE PRO PERTY WAS OFFERED FOR YEAR UNDER CONSIDERATION. LD.AO, ACCORD INGLY, CALLED UPON ASSESSEE TO FILE REQUISITE DETAILS IN RESPECT OF THE SAID PROPERTY. AFTER CONSIDERING THE SUBMISSIONS ADVANCE D BY ASSESSEE, DISSATISFIED WITH THE SAME, LD.AO MADE AN ADDITION UNDER SECTION 23(1)(A) CONSIDERING THE ANNUAL VALUE OF PROPERTY TO BE THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET OUT YEAR TO YEAR. LD.AO TOOK RS.71,213/- AS INCOME FROM HOUSE PROPERTY RECEIVABLE FROM PROPERTY AT MADRAS A ND AFTER ALLOWING 30% OF STANDARD DEDUCTION AS PER PROVISION S OF SECTION 24(A) OF THE ACT MADE AN ADDITION OF RS.49,849/-AS ASSESSEES INCOME FROM HOUSE PROPERTY. 3. AGGRIEVED BY THE ADDITIONS MADE, ASSESSEE PREFER RED APPEAL BEFORE THE LD.CIT (A) WHO UPHELD THE ADDITION. 4. AGGRIEVED BY ORDER OF LD. CIT (A) ASSESSEE IS IN APPEAL BEFORE US NOW. 5. LD. COUNSEL SUBMITTED THAT THE PROPERTY UNDER QU ESTION IS A COMMERCIAL FLAT AT MADRAS OWNED BY ASSESSEE ALONG W ITH HER 2 SISTERS. HE SUBMITTED THAT THE SAID PROPERTY WAS PU RCHASED BE BACK IN 1980 AND WAS LET OUT. HE SUBMITTED THAT THE SAID ITA NO. 6698/DEL/2015 3 PROPERTY WAS CONTINUOUSLY LET OUT TILL ASSESSMENT Y EAR 2001-02 AND THEREAFTER FROM ASSESSMENT YEAR 2002-03 A SUITA BLE TENANT COULD NOT BE FOUND AND REMAINED VACANT. IT WAS THUS , SUBMITTED BY LD. COUNSEL THAT UNDER SUCH CIRCUMSTANCES THE PR OPERTY HAS TO BE CONSIDERED AS PER PROVISIONS OF SECTION 23(1) (C) OF THE ACT. HE PLAYS RELIANCE UPON FOLLOWING DECISIONS OF COORD INATE BENCHES OF THIS TRIBUNAL: PREAMSUDHA EXPORTS (P) LTD., VS. ACIT REPORTED IN ( 2008) 110 ITD 158; SHAKUNTALA DEVI VERSUS DDIT REPORTED IN (2000 DEL) 31 CCH 32 (BANG); ACIT VERSUS DR PRABHA SANGHI REPORTED IN (2012) 139 ITD 504 (DELHI); REYNAUD SHAMLAL VS. ACIT IN ITA NO. 1100/DEL/2014 W IDE ORDER DATED 21/09/16; 6. LD. COUNSEL FURTHER SUBMITTED THAT LD.CIT (A) CO NFIRMED ADDITION BY RELYING UPON DECISIONS OF HONBLE ANDHRA PRADESH HIGH COURT IN CASE OF VIVEK JAIN VS ACIT REPORTED IN (2011) 14 TAXMANN.COM 146 AND HONBLE DELHI HIGH COURT IN CASE OF RAM PERSHAD AND SONS VS CIT REPORTED IN (1995) 81 TAXMA NN 332. 6.1 HE SUBMITTED THAT DECISION OF HONBLE DELHI HIGH COURT IN CASE OF RAM PERSHAD AND SONS VS CIT(SUPRA) IS DISTINGUISHABLE ON FACTS, AS IT WAS A CASE WHERE, ASSESSEE CLAIMED VAC ANCY ALLOWANCE ON OCCUPIED PROPERTY, WHICH WAS NEVER BEEN LET OUT IN ANY OF PRECEDING ASSESSMENT YEARS, OR EVEN PARTLY DURING Y EAR UNDER CONSIDERATION. INSOFAR AS DECISION OF VIVEK JAIN VS ACIT (SUPRA) IS CONCERNED, LD. COUNSEL SUBMITTED THAT LD. CIT(A) MI SCONCEIVED THE JUDGMENT OF HONBLE ANDHRA PRADESH HIGH COURT BY PLACING RELIANCE UPON THE CONCLUDING PARAGRAPHS 14 AND 15 O F THE SAID DECISION WHEREIN, HONBLE COURT THOUGH HAS CONCLUDED THAT THE BENEFIT OF COMPUTING THE ALE BE UNDER SECTION 23(1) (C) COULD NOT ITA NO. 6698/DEL/2015 4 BE EXTENDED TO A CASE WHERE THE PROPERTY WAS NOT LE T OUT AT ALL, HOWEVER THE SAME WOULD DULY INCOME PASSED TO TAKE W ITHIN ITS SWEET CASES WHERE THE PROPERTY HAD REMAINED LET OUT FOR 2 OR MORE YEARS BUT THEREAFTER HAD REMAINED VACANT FOR W HOLE OF THE PREVIOUS YEAR. HE SUBMITTED THAT IN FACT THE DECISI ON OF HONBLE ANDHRA PRADESH HIGH COURT IS IN FAVOUR OF ASSESSEE AS IN THE PRESENT FACTS OF THE CASE ADMITTEDLY THE PROPERTY H AS REMAINED VACANT SINCE ASSESSMENT YEAR 2002-03 WHICH HAS BEEN A PART OF OBSERVATIONS RECORDED BY LD.AO IN THE ASSESSMENT OR DER. 7. ON CONTRARY, LD. DR PLACED RELIANCE UPON ORDERS OF AUTHORITIES BELOW. 8. WE HAVE PERUSED THE SUBMISSIONS ADVANCED BY BOTH SIDES AND THE LIGHT OF THE RECORDS PLACED BEFORE US. 9. IN ORDER TO ATTRACT SECTION 23(L)( C ), THE FOLLOWING REQUIREMENTS MUST BE FULFILLED (I) THE PROPERTY, OR ANY PART THEREOF, MUST BE LET; AND (II) IT SHOULD HAVE BEEN VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR ; AND ( III ) OWING TO SUCH VACANCY THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF SHOULD B E LESS THAN THE SUM REFERRED TO IN CLAUSE 9.1 IT IS ONLY IF THESE THREE CONDITIONS ARE SATISF IED TOGETHER, WOULD CLAUSE ( C ) OF SECTION 23(1) APPLY, IN WHICH EVENT AMOUNT RECEIVED OR RECEIVABLE, IN TERMS OF CLAUSE ( C ) OF SECTION 23(1), SHALL BE DEEMED TO BE THE ANNUAL VALUE OF THE PROPERTY. 10. FURTHER, CLAUSE ( C ) DOES NOT APPLY TO SITUATIONS WHERE PROPERTY HAS EITHER NOT BEEN LET OUT AT ALL DURING ANY OF THE PREVIOUS YEARS OR, EVEN IF LET OUT, WAS NOT VACANT DURING WHOLE OR ITA NO. 6698/DEL/2015 5 ANY PART OF PREVIOUS YEAR. FURTHER UNDER EXPLANATION TO SECTION 23(1), FOR THE PURPOSES OF CLAUSE ( B ) OR ( C ), AMOUNT ACTUALLY RECEIVED OR RECEIVABLE BY THE OWNER SHALL NOT INCLU DE THE AMOUNT OF RENT WHICH THE OWNER CANNOT REALIZE. 11. IN PRESENT FACTS OF CASE, ADMITTEDLY PROPERTY A T CHENNAI IN DISPUTE HAS REMAINED VACANT POST ASSESSMENT YEAR 20 02-03 TILL DATE. IT IS NOT THE CASE OF REVENUE THAT THE PROPER TY AFTER BEING VACANT, REMAINED UNDER SELF OCCUPATION OF ASSESSEE. IT IS ALSO NOT BEEN DISPUTED BY THE REVENUE THAT PRIOR TO ASSESSME NT YEAR 2002-03 THE PROPERTY WAS NOT LET OUT. 12. ON A QUESTION BEING POSED BY THE BENCH TO LD. C OUNSEL REGARDING VIEW OF REVENUE DURING INTERREGNUM ASSESS MENT YEARS, LD. COUNSEL SUBMITTED THAT THERE HAS BEEN NO ADDITI ON MADE BY THE AUTHORITIES DURING ASSESSMENT YEARS 2003-04 TO 2011-12. FURTHER THE SUBMISSIONS OF LD. COUNSEL THAT ASSESSE E HAS MADE ALL EFFORTS TO LET OUT THE PROPERTY IN DISPUTE. 13. WE ARE AGREED WITH SUBMISSIONS OF LD. COUNSEL R EGARDING DECISION OF HONBLE ANDHRA PRADESH HIGH COURT IN CASE OF VIVEK JAIN VS ACIT (SUPRA) BEING MISCONCEIVED BY THE AUTHORITIES BELOW. WE HAVE PERUSED THE SAID DECISION AND FIND THAT HONBLE HIGH COURT HELD AS UNDER: 14. THE CONTENTION THAT, AS CLAUSE (C) PROVIDES FOR AN EVENTUALITY WHERE A PROPERTY CAN BE VACANT DURING T HE WHOLE OF THE RELEVANT PREVIOUS YEAR, BOTH SITUATIONS, I.E., 'PROPERTY IS LET' AND 'PROPERTY I S VACANT FOR THE WHOLE OF THE RELEVANT PREVIOUS YEAR' CANNOT CO- EXIST DOES NOT MERIT ACCEPTANCE. CLAUSE (C) ENCOMPASSES C ASES WHERE A PROPERTY IS; LET OUT FOR MORE THAN A YEAR I N WHICH ITA NO. 6698/DEL/2015 6 EVENT ALONE WOULD THE QUESTION OF IF BEING VACANT D URING THE WHOLE OF THE PREVIOUS YEAR ARISE. 13.1 FROM THE ABOVE PROVISION OF LAW, IT CAN BE CON STRUED THAT IN CASE THE PROPERTY OR PART THEREOF WAS VACANT DURING THE PERIOD, THE PROPORTION DEDUCTION SHOULD BE ALLOWED FROM THE SUM ON WHICH THE PROPERTY MIGHT REASONABLY BE LET OUT FROM YEAR TO YEAR. WE FIND THAT IT IS THE PLEA OF THE ASSESSEE THAT DU E TO INHERENT DEFECTS, THE FLAT COULD NOT BE LET OUT. HENCE, THE FLAT REMAINED VACANT. HENCE, THE ASSESSEE HAS CLAIMED BENEFIT OF SECTION 23(1)(C) WHICH DULY PERMITS DEDUCTION IN THIS REGAR D. WE FIND THAT THE COORDINATE BENCH OF THIS TRIBUNAL IN CASE OF PREMSUDHA EXPORTS (P) LTD. (SUPRA), HAD OCCASION TO DELIBERATE ON IDENTICAL ISSUE. THIS TRIBUNAL HAS OBSERVED ON A PLAIN READIN G OF SECTION 23(3) THAT, LEGISLATURE IN THEIR WISDOM USED WORDS, 'HOUSE IS ACTUALLY LET' , WHICH SHOWS THAT WORDS, 'PROPERTY IS LET' CANNOT MEAN ACTUAL LETTING OUT OF PROPERTY, BECAUSE HAD IT TO BE SO, THERE WAS NO NEED TO USE WORDS, 'ACTUALLY' IN SECTION 23(3). IT WAS OBSERVED BY THIS TRIBUNAL THAT, IT IS NOT AT ALL RE LEVANT AS TO WHETHER PROPERTY WAS LET OUT IN PAST OR NOT. THESE WORDS DO NOT TALK OF ACTUAL LET OUT, BUT TALK ABOUT INTENTION OF ASSESSEE TO LET OUT. IF PROPERTY IS HELD BY OWNER FOR LETTING OUT AND EFFORTS ARE MADE TO LET IT OUT, SUCH PROPERTY WILL BE COVERED B Y SECTION 23(1)(C), AND THIS REQUIREMENT HAS TO BE SATISFIED IN EACH YEAR THAT PROPERTY WAS BEING HELD TO LET OUT, BUT REMAIN ED VACANT FOR WHOLE OR PART OF THE YEAR. THUS, IF A PROPERTY IS H ELD WITH AN INTENTION TO LET OUT IN THE RELEVANT YEAR COUPLED W ITH EFFORTS MADE FOR LETTING IT OUT, IT COULD BE SAID THAT SUCH A PR OPERTY IS A LET OUT ITA NO. 6698/DEL/2015 7 PROPERTY AND THE SAME WOULD FALL WITHIN THE PURVIEW OF CLAUSE (C) OF SECTION 23(1). 14. IN OUR CONSIDERED OPINION THE FACT THE PRESENT CASE ASSESSEE ALWAYS HAD THE INTENTION OF LETTING OUT THE PROPERT Y AT CHENNAI, POST ASSESSMENT YEAR 2002-03, HOWEVER, IT HAS BEEN SUBMITTED THAT DUE TO FALL IN PROPERTY PRICES, THE SAME COULD NOT BE LET OUT YEAR AFTER YEAR BECAUSE OF WHICH DISPUTED PROPERTY REMAINED VACANT. ONE MORE RELEVANT FACTOR WHICH WE OBSERVE I S THAT, ASSESSING OFFICER IN ANY OF PRECEDING ASSESSMENT YE AR, POST ASSESSMENT YEAR 2002-03, HAS NEVER DISPUTED THAT TH E PROPERTY WAS NOT VACANT. IN FACT IN ASSESSMENT ORDER PASSED FOR YEAR UNDER CONSIDERATION, LD.AO IS ADMITTING TO THE FACT THAT PROPERTY IN QUESTION WAS LET OUT ONLY TILL ASSESSMENT YEAR 2 002-03 AND THEREAFTER IT WAS VACANT, EVEN DURING YEAR UNDER CO NSIDERATION. UNDER SUCH CIRCUMSTANCES, IN OUR CONSIDERED OPINION ASSESSEES CASE STANDS SQUARELY COVERED BY VIEW TAKEN BY COORD INATE BENCH OF THIS TRIBUNAL IN CASE OF PREMSUDHA EXPORTS (P) LTD. (SUPRA), AND BENEFIT UNDER SECTION 23 (1) ( C) HAS TO BE GRA NTED. ACCORDINGLY THE GROUNDS RAISED BY ASSESSEE STANDS A LLOWED. IN THE RESULT APPEAL FILED BY ASSESSEE STANDS ALLOW ED. ORDER PRONOUNCED IN THE OPEN COURT ON 13/12/2018 SD/- SD/- (N.S. SAINI) (BEENA A PILLAI) ACCOUNTANT MEMBER JUDICIAL ME MBER DT. 13/12/2018 *KAVITA ARORA ITA NO. 6698/DEL/2015 8 COPY FORWARDED TO: - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT - TRUE COPY - BY ORDER, ASSISTANT REGISTRAR ITAT DELHI BENCHES ITA NO. 6698/DEL/2015 9 DATE 1. DRAFT DICTATED ON 11/12/2018 13/12 2. DRAFT PLACED BEFORE AUTHOR 11/12 13/12 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. 5. APPROVED DRAFT COMES TO THE SR.PS/PS 13/12 6. KEPT FOR PRONOUNCEMENT ON 13/12 7. FILE SENT TO THE BENCH CLERK AND UPLOADED 13/12 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.