MAHIPATRAY V SHAH HUF, MUMBAI V. DEPUTY COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 5(1), MUMBAI

ITA 6878/MUM/2017

• Counselvise Citation: [2019] 112 COUNSELVISE.COM (IT) 6621 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 22 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-02-2019
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2014-2015
• Appeal Filed On: 05-12-2017
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Set aside
• Section: 143(3); 142(1); 143(1); 143(2); 154

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH, MUMBAI BEFORE SHRI SHAMIM YAHYA , AM AND SHRI AMARJIT SINGH, JM / I .T.A. NO. 6878 / MUM/ 20 1 7 ( / ASSESSMENT YEAR: 2014 - 15 ) MAHIPATRAY V. SHAH HUF 6 TH FLOOR AKRUTI, 23F, DOONGERSEY RO AD, WALKESHWAR, MUMBAI - 400006. / VS. DY. COMMISSIONER OF INCOME TAX CC - 5(1) 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI - 400021. ./ ./ PAN/GIR NO. : AAFHM 0519 R ( / APPELLANT ) .. ( / RESPONDEN T ) / DATE OF HEARING : 07 .0 2 .201 9 / DATE OF PRONOUNCEMENT : 27. 02 .2019 / O R D E R P ER AMARJIT SINGH, J M: THE ASSESSEE HAS FILED THE PRESENT APPEAL AGAINST THE ORDER DATED 26.09 .2011 PASSED BY THE COMMISSIONER OF INCOME TAX (APPEALS) - 53 , MUMBAI [HEREINAFTE R REFERRED TO AS THE CIT(A)] RELEVANT TO THE A.Y. 2014 - 15 . 2 . THE ASSESSEE HAS RA ISED THE FOLLOWING GROUNDS: - BEING AGGRIEVED BY THE APPEAL ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 53, MUMBAI (HEREINAFTER REFERRED TO AS THE 'CIT(A) 53') WITH REGARDS THE ASSESSMENT ORDER U/S 143(3) OF THE ACT OF THE DY. COMMISSIONER O F INCOME TAX, CC 5(1), MUMBAI (HEREINAFTER REFERRED TO AS THE '(AO'), THIS APPEAL PETITION IS SUBMITTED ON THE FOLLOWING GROUNDS: - ASSESSEE BY : SHRI HARSH SHAH REVENUE BY: SHRI D. G. PANSARI (SR. AR) ITA. NO.6878 /M/201 7 A.Y. 20 14 - 15 2 1. ON THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) 53, HAS GROSSLY ERRED IN CONFIRMING ADDITION OF RS.31,6 2 , 154/ - MADE ON ACCOUNT OF DEEMED RENT FROM LET OUT OF FLATS WHICH WERE BEING USED BY THE APPELLANT AND ITS MEMBERS FOR THEIR PERSONAL USE. 2. THE ORDER UNDER APPEAL IS NOT ONLY BAD IN LAW AND INVALID, BUT ALSO AGAINST THE NATURAL LAW OF EQUITY AND JUSTICE . 3. THAT THE APPELLANT RESERVES ITS RIGHTS TO AMEND, ALTER OR RAISE ANY OTHER ADDITIONAL GROUNDS OF APPEAL BEFORE OR DURING THE COURSE OF APPELLATE PROCEEDINGS. ' 3 . THE BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FILED HIS RETURN OF INCOME ON 31 . 07.201 4 DECLARING TOTAL INCOME TO THE TUNE OF RS.42,42,580/ - . THE RETURN WAS PROCE SSED U/S 143(1) OF THE ACT . THEREAFTER, THE CASE WAS SELECTED FOR SCRUTINY , THEREFORE, NOTICES U/S 143(2) & 142(1) OF THE ACT WERE ISSUED AND SERVED UPON THE ASSESSEE. THE ASSESSEE IS A HUF AND IS THE OWNER OF THE SIX FLAT AT AKRUTI BUILDING WALKESHWAR, MUMBAI . THE ASSESSEE WAS HAVING 3 FLATS AT 2 ND FLOOR AND ON 3 FLAT AT 3 RD FLOOR. THE AO ARRIVED AT THIS CONCLUSION THAT THE ASSESSEE WAS HAVING POSSESSION OF ONE FLAT AND ASSESSED THE DEEMED RENT @ 8% IN CONNECTION REMAINING FLATS . THE AO ASSESSED THE DEEMED RENT OF THE FIVE FLATS IN SUM OF RS. 31,62,154/ - . THE TAXABLE INCOME WAS ASSESSED TO THE TUNE OF RS.74,04,730/ - . FEELING AGGRIEVED, THE ASSESSEE FILED AN APPEAL BEFORE THE CIT(A) WH O CONFIRMED THE ORDER OF THE AO, THEREFORE, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE US. 4 . WE HAVE HEARD THE ARGUMENT AND ADVANCED BY THE LD. REPRESENTATIVE OF THE PARTIES AND PERUSED THE RECORD. AT THE VERY ITA. NO.6878 /M/201 7 A.Y. 20 14 - 15 3 OUTSET, THE LD. REPRESENTATIVE OF THE ASSESSEE HAS ARGUED THAT THE ISSUE OF THE ASSESSEE HAS DULY BEEN COVERED BY THE DECISION OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE FOR THE A.Y. 2009 - 10 IN ITA. NO.5502/M/2015 DATED 24.11.2017, THEREFORE, IN VIEW OF THE SAID DECISION THE ISSUE OF THE A SSESSEE IS LIABLE TO BE RESTORED BEFORE THE AO IN ACCORDANCE WITH LAW. HOWEVER, ON THE OTHER HAND, THE LD. REPRESENTATIVE OF THE DEPARTMENT HAS REFUTED THE SAID CONTENTION. THE RELEVANT FINDING OF THE HONBLE ITAT IN THE ASSESSEES OWN CASE IN ITA. NO.5502 /M/2015 DATED 24.11.2017 IS HEREBY REPRODUCED AS UNDER.: - 6. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE MATERIAL AVAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. IT IS AN UNDISPUTED FACT THAT THE ASSESSEE OWNED SIX FLATS, 3 EACH IN SECOND AND FIFTH FLOOR OF THE SAME BUILDING. THE ASSESSEE CLAIMS THAT ALL SIX FLATS HAVE BEEN USED FOR SELF OCCUPATION OF HIS FAMILY CONSISTING OF KARTA, HIS WIFE, TWO SONS, TWO DAUGHTERS - IN - LAW AND 3 GRAND CHILDREN. WE DO NOT FIND ANY MERIT IN THE ARGU MENT OF THE ASSESSEE THAT ALL SIX FLATS HAVE BEEN USED FOR SELF OCCUPATION FOR THE REASON THAT THE ASSESSEE FAILED TO PROVE SELF OCCUPATION OF SIX FLATS WITH NECESSARY EVIDENCES. IT IS STRANGE TO ACCEPT ARGUMENTS OF THE ASSESSEE THAT IT HAS USED FLATS SIT UATED ON THE 2 ND AND 5 TH FLOOR WITHOUT ANY INTER - CONNECTIVITY FOR THE SELF OCCUPATION OF ITS FAMILY. AT THE SAME TIME, THE ASSESSEE HAS FILED SEPARATE PLAN COPY OF FLATS SITUATED ON THE 2 ND AND 5 TH FLOOR AS PER WHICH, THE ASSESSEE HAS REDESIGNED THE THREE FLATS SITUATED ON THE 2 ND FLOOR INTO ONE COMMON RESIDENTIAL UNIT. THOUGH THE PLAN COPY FILED BY THE ASSESSEE IS NOT APPROVED BY THE COMPETENT AUTHORITIES, USE OF ALL THE THREE FLATS FOR ASSESSEES FAMILY CANNOT BE RULED OUT CONSIDERING THE FACT THAT THE ASSESSEES FAMILY CONSISTS OF KARTA, HIS WIFE, TWO SONS, TWO DAUGHTERS - IN - LAW AND 3 GRAND CHILDREN. THEREFORE, WE ARE OF THE VIEW THAT THE ASSESSEE SHALL GET THE BENEFIT OF SELF OCCUPATION OF PROPERTY IN RESPECT OF 3 FLATS SITUATED ITA. NO.6878 /M/201 7 A.Y. 20 14 - 15 4 ON THE SECOND FLOOR OF THE BUILDING. HENCE, WE DIRECT THE AO TO CONSIDER THESE 3 FLATS SITUATED ON THE 2 ND FLOOR OF THE BUILDING AS SELF OCCUPIED PROPERTIES BY THE ASSESSEE. IN RESPECT OF REMAINING 3 FLATS SITUATED ON THE 5 TH FLOOR OF BUILDING, THE AO WAS RIGHT IN COMPUTING DE EMED ANNUAL LETTING VALUE @8% OF THE VALUE OF THE FLATS. THE AO IS DIRECTED TO RE - WORK THE DEEMED ANNUAL LETTING VALUE AND ALLOW NECESSARY RELIEF ON THE BASIS OF THE FINDING RECORDED ABOVE. 5. IN VIEW OF THE ABOVE MENTIONED DIRECTION OF THE HONBLE ITAT , WE SET ASIDE THE FINDING OF THE CIT(A) ON THIS ISSUE AND RESTORED THE ISSUE BEFORE THE AO TO DECIDE THE MATTER OF CONTROVERSY AFRESH IN VIEW OF THE DIRECTIONS GIVEN BY HONBLE ITAT IN THE ASSESSEES OWN CASE (SUPRA) IN ACCORDANCE WITH LAW. ACCORDINGLY, T HIS ISSUE IS DECIDED IN FAVOUR OF THE ASSESSEE AGAINST THE REVENUE. 6 . IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS HEREBY ORDERED TO BE ALLOWED FOR STATISTICAL PURPOSE . ORDER PRONOUNCED IN THE OPEN COURT ON 27. 02 .2019 . SD/ - SD/ - ( SHAMIM YAHYA ) (AMARJIT SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 27. 02 .2019 . V IJAY ITA. NO.6878 /M/201 7 A.Y. 20 14 - 15 5 / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT. 3. ( ) / THE CIT(A) - 4. / CIT 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE. / BY ORDER, //TRUE COPY// / / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI