RINA JAIN, MUMBAI V. DCIT CC 6(4), MUMBAI

ITA 6751/MUM/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 6457 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-02-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2010-2011
• Appeal Filed On: 29-11-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: KAMAL MANGAL
• Keywords: Tax effect
• Section: 143(3); 201; 13; 22

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SAKTIJIT DEY , JUDICIAL MEMBER AND SHR I G. MANJUNATH, ACCOUNTANT MEMBER ITA NO. 6751 / MUM . /201 8 ( ASSESSMENT YEAR : 20 1 0 11 ) RINA JAIN 82, MAKER CHAMBER III NARIMAN POINT, MUMBAI 400 021 PAN AABPJ1883F . APPELLANT V/S DY. COMMISSIONER OF INCOME TAX CIRCLE 6(4), MUMBAI . RESPONDENT ASSESSEE BY : SHRI ANUJ KISNADWALA REVENUE BY : SHRI KAMAL MANGAL DATE OF HEARING 14.01.2020 DATE OF ORDER 05.02.2020 O R D E R PER SAKTIJIT DEY. J.M. THE CAPTIONED APPEAL HA S BEEN FILED BY THE ASSESSEE CHALLENGING THE ORDER DATED 24 TH AUGUST 2018, PASSED BY THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 54 , MUMBAI, PERTAINING TO THE ASSESSMENT YEAR 201 0 11 . 2. THE DISPUTE IN THE PRESENT APPEAL IS CONFINED TO DETERMINATION OF ANNUAL LETTING VALUE (ALV) OF THE PREMISES OWNED BY THE ASSESSEE. 2 RINA JAIN 3. BRIEF FACTS ARE, THE ASSESSEE IS AN INDIVIDUAL . SHE OWNS CERTAIN PREMISES AT CENTRAL GARDEN COMPLEX, CHUNA BHATTI, MUMBAI. FOR THE ASSESSMENT YEAR UNDER CONSIDERATION, THE ASSESSEE FILED HER RETURN OF INCOME ON 28 TH JULY 2010, DECLARING TOTAL INCOME OF ` 4,65,69,340. IN THE RETURN OF INCOME S O FILED, THE ASSESSEE OFFERED INCOME OF ` 14,19,474, UNDER THE HEAD INCOME FROM HOUSE PROPERTY BY DETERMINING THE ALV OF THE VACANT PREMISES OWNED BY HER AS PER MUNICIPAL RATABLE VALU E (MRV). W HILE COMPLETING THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT VIDE ORDER DATED 3 RD DECEMBER 2012, THE ASSESSING OFFICER DETERMINED THE TOTAL INCOM E AT ` 6,31,16,860, THEREBY , ENHANCING THE ALV TO ` 2,51,97,600. AGAINST THE ASSESSMENT ORDER SO PASSED, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 4. AFTER CONSIDERING THE SUBMISSION S OF THE ASSESSEE, LEARNED COMMISSIONER (APPEALS) RESTRICTED THE ALV TO ` 17,03,369. THE AFORESAID ORDER OF LEARNED COMMISSIONER (APPEALS) WAS CHALLENGED , BOTH , BY THE ASSESSEE AND THE REVENUE BEFORE THE TRIBUNAL. AFTER CONSIDERING THE SUBMISSIONS OF THE PARTIES, THE TRIBUNAL RESTORED THE ISSUE BACK TO TH E FILE OF THE ASSESSING OFFICER FOR FRESH ADJUDICATION. IN PURSUANCE TO THE DIRECTIONS OF THE TRIBUNAL, THE ASSESSING OFFICER TOOK UP THE ASSESSMENT PROCEEDINGS AGAIN AND IN COURSE OF SUCH PROCEEDINGS, CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE ALV O F 3 RINA JAIN THE PROPERTY SHOULD NOT BE DETERMINED AS PER FAIR RENT. THOUGH, THE ASSESSEE STUCK TO HER STAND THAT ALV OF THE PROPERTY SHOULD BE DETERMINED AS PER MRV, HOWEVER, THE ASSESSING OFFICER WAS NOT CONVINCED WITH THE CLAI M OF THE ASSESSEE AND WAS OF THE VIEW THAT THE ALV OF T HE PROPERTY SHOULD BE DETERMINED ON THE BASIS OF RENT RECEIVED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2015 16 AND ACCORDINGLY DETERMINED THE DEEMED ALV AT ` 1,53,53,283. AFTER ALLOWING STATUTORY DEDUCTION, HE MADE ADDITION OF ` 96,43,262, T O THE INCOME UNDER THE HEAD HOUSE PROPERTY . CHALLENGING THE AFORESAID ADDITION, THE ASSESSEE PREFERRED APPEAL BEFORE THE FIRST APPELLATE AUTHORITY. 5. AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE, THE LEARNED COMMISSIONER (APPEALS) , THOUGH , OBSERVED T HAT THE FLATS HELD BY THE ASSESSEE AS WELL AS OTHER FAMILY MEMBERS IN THE SAME BUILDING REMAINED VACANT DURING THE ASSESSMENT YEAR 2010 11 AND ALSO THEREAFTER TILL THE ASSESSMENT YEAR 2015 16 AND FURTHER , HE OBSERVED THAT ON IDENTICAL FACTS INVOLVING SIMIL AR NATURE OF DISPUTE , BOTH , THE COMMISSIONER (APPEALS) AND THE TRIBUNAL HAVE UNIFORMLY HELD THAT THE MRV HAS TO BE TAKEN AS ALV, HOWEVER, RELYING UPON HIS OWN ORDER PASSED IN CASE OF SOME OTHER FAMILY MEMBERS INCLUDING LAXMI SATYAPAL JAIN FOR THE ASSESSMEN T YEAR 2013 14 AND 2014 15, HE DIRECTED THE ASSESSING OFFICER TO RE COMPUTE THE ALV BY TAKING THE MRV AS THE BASE AND INCR EASE IT BY 5% EVERY YEAR TO ARRIVE AT THE 4 RINA JAIN RATABLE VALUE FOR THE IMPUGNED ASSESSMENT YEAR. FURTHER, HE DIRECTED THE ASSESSING OFFICER T O ENHANCE THE VALUE SO ARRIVED AT BY 1/9 TH OF THE SAID VALUE TO DETERMINE THE ALV. AS SUBMITTED BEFORE US , AGAIN ST THE AFORESAID DECISION OF LEARNED COMMISSIONER (APPEALS), BOTH , THE ASSESSEE AND THE REVENUE AGAIN CAME IN APPEAL B EFORE THE TRIBUNAL. HOWEVER, REVENUES APPEAL WAS DISMISSED DUE TO LOW TAX EFFECT. 6. THE LEARNED AUTHORISED REPRESENTATIVE SUBMITTED , THE DIRECTION OF LEARNED COMMISSIONER (APPEALS) TO INCREASE THE MRV BY 5% EVERY YEAR FOR ARRIVING AT THE ALV IS NOT IN ACCORDANCE WITH THE SETT LED POSITION OF LAW. HE SUBMITTED , THE ASSESSEE HAS DETERMINED THE ALV AS PER MRV WHICH IS THE ACCEPTED METHOD TO DETERMINE THE ALV. HE SUBMITTED , LEARNED COMMISSIONER (APPEALS) WHILE DIRECTING THE ASSESSING OFFICER TO RE COMPUTE THE ALV BY INCREASING 5% O N THE MRV EVERY YEAR HAS FOLLOWED HIS OWN ORDER PASSED IN CASE OF SMT. LAXMI SATYA PA L JAIN, FOR THE ASSESSMENT YEAR 2013 14 AND 2014 15. HOWEVER, THE TRIBUNAL WHILE DECIDING THE ISSUE IN RESPECT OF APPEALS FILED BY DIFFERENT FAMILY MEMBERS INCLUDING LAXMI SATYA PA L JAIN , IN CONSOLIDATED ORDER VIDE ITA NO.6836/MUM./2017 & ORS., DATED 28 TH FEBRUARY 2019, HAS NOT ACCEPTED THE DIRECTIONS OF LEARNED COMMISSIONER (APPEALS) FOR RE COMPUTING THE ALV BY INCREASING 5% OVER THE MRV. HE SUBMITTED , IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2011 12, 2012 13, 2013 14 AND 2014 15, SAME VIEW HAS BEEN 5 RINA JAIN EXPRESSED BY THE TRIBUNAL. THUS, HE SUBMITTED , FACT S BEING IDENTICAL, THE DECISIONS OF THE TRIBUNAL IN ASSESSEES OWN CASE AS WELL AS IN CASE OF OTHER FAMILY MEMBERS WOULD SQUARE LY APPLY. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE STRONGLY RELI ED UPON THE OBSERVATIONS OF THE ASSESSING OFFICER . 8. WE HAVE CONSIDERED RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. UNDISPUTED FACTS ARE , THE ASSESSEE IS THE OWNER OF CERTAIN PREMISES IN A HOUSING COMPLEX WHICH REMAINED VACANT DURING THE YEAR UNDER CONSIDERATION. HOWEVER, IN THE RETURN OF INCOME FILED FOR THE IMPUGNED ASSESSMENT YEAR, THE ASSESSEE OFFERED INCOME FROM SUCH HOUSE PROPERTY BY DETERMINING T HE ALV UNDER SECTION 23 OF THE ACT AS PER MRV. WHEREAS, T HE ASSESSING OFFICER HAS DETERMINED THE ALV ON THE BASIS OF RENT RECEIVED BY THE ASSESSEE IN THE ASSESSMENT YEAR 2015 16. HOWEVER , LEARNED COMMISSIONER (APPEALS) HAS DIRECTED THE ASSESSING OFFICER TO RE COMPUTE THE ALV BY TAKING THE MRV AS THE BASE AND INCREASE IT BY 5% EVERY YEAR. IT IS EVIDENT , LEARNED COMMISSIONER (APPEALS) WHILE GIVING SUCH DIRECTION HAS FOLLOWED THE ORDER PASSED BY HIM IN CASE OF SMT. LAXMI SATYAPAL JAIN , ONE OF THE FAMILY MEMBER S. HOWEVER, WHILE DECIDING THE ISSUE IN CASE OF THE AFORESAID FAMILY MEMBER , THE TRIBUNAL IN THE ORDER REFERRED TO ABOVE HAS DISAGREED WI TH THE AFORESAID DECISION OF LEARNED COMMISSIONER (APPEALS) AND DIRECTED THE ASSESSING OFFICER TO DETERMINE THE ALV AS 6 RINA JAIN PER MRV. IN FACT, IN ASSESSEES OWN CASE IN ASSESSMENT YEAR S 2011 12, 2012 13 AND 2013 14, THE TRIBUNAL WHILE DECIDING IDENTICAL ISSUE IN ITA NO.3893/MUM./2017 & ORS., DATED 22 ND MARCH 2019, HAS HELD THAT DETERMINATION OF ALV ON AD HOC BASIS BY MAKING 5% I NCREASE OVER THE MRV IS NOT ACCEPTABLE. FURTHER, THE TRIBUNAL HAS DIRECTED THAT THE ALV OF THE VACANT FLAT HAS TO BE DETERMINED ON THE BASIS OF MRV. THE SAME VIEW WAS EXPRESSED BY THE TRIBUNAL WHILE DECIDING ASSESSEES OWN CASE FOR THE ASSESSMENT YEAR 2014 15, VIDE ITA NO. 547/MUM./2018, DATED 31 ST JULY 2019. FACT S BEING IDENTICAL, RESPECTFULLY FOLLOWING THE AFORESAID DECISION S OF THE TRIBUNAL IN ASSESSEE OWN CASE AS WELL AS IN CASE OF OTHER FAMILY MEMBERS, WE DIRECT THE ASSESSING OFFICER TO DETERMINE THE ALV OF THE VACANT FLAT AS PER MRV. IN CASE , IT IS FOUND THAT ALV DETERMINED BY THE ASSESSEE IS AS PER MRV, THE SAME SHOULD BE ACCEPTED. GROUNDS ARE ALLOWED. 9. IN THE RESULT, APPEAL STANDS ALLOWED. ORDER PRONOUNCED IN THE OPEN C OURT ON 05.02.2020 SD/ - G. MANJUNATH ACCOUNTANT MEMBER SD/ - SAKTIJIT DEY JUDICIAL MEMBER MUMBAI, DATED: 05.02.2020 7 RINA JAIN COPY OF THE ORDER FORWARDED TO : (1) THE ASSESSEE; (2) THE REVENUE; (3) THE CIT(A); (4) THE CIT, MUMBAI CITY CONCERNED; (5) THE DR, ITAT, MUMBAI; (6) GUARD FILE . TRUE COPY BY ORDER PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ASSISTANT REGISTRAR ITAT, MUMBAI