Sabri Nest Inn P Ltd., CHENNAI V. DCIT, CHENNAI

ITA 690/CHNY/2015

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 7984 (ITAT-CHENNAI)
• Duration Of Justice: 10 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-02-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 16-12-2015
• Assessment Year: 2010-2011
• Appeal Filed On: 06-04-2015
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: JAYARAM RAIPURA
• Assessee Lawyers: S SRIDHAR
• Section: 143(3); 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL , B B ENCH, CHENNAI . . . , . , & BEFORE SHRI N.R.S.GANESAN, JUDICIAL MEMBER AND SHRI A.MOHAN ALANKAMONY, ACCOUNTANT MEMBER ./ I.T.A.NO.690/MDS/2015 ( / ASSESSMENT YEAR: 2010-11) M/S. SABRI NEST INN P.LTD., 29, THIRUMALAI PILLAI ROAD, T.NAGAR, CHENNAI-600 017. VS THE DEPUTY COMMISSIONER OF INCOME TAX , COMPANY CIRCLE-6(1) CHENNAI. PAN:AAMCS3008B ( /APPELLANT) ( /RESPONDENT) / APPELLANT BY : MR. S.SRIDHAR, ADVOCATE /RESPONDENT BY : MR. JAYARAM RAIPURA, CIT /DATE OF HEARING : 16 TH DECEMBER, 2015 /DATE OF PRONOUNCEMENT : 17 TH FEBRUARY, 2016 / O R D E R PER A. MOHAN ALANKAMONY, AM:- THIS APPEAL IS FILED BY THE ASSESSEE AGGRIEVED BY T HE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX-6, CHENNAI DATED 18.03.2015 IN ITA NO.6119(12)/CIT-6/2014-15 P ASSED UNDER SECTION 263 OF THE ACT. 2. THE ASSESSEE CHALLENGES THE ORDER OF THE LEARNE D COMMISSIONER OF INCOME TAX FOR INVOKING THE PROVIS IONS OF SECTION 263 OF THE ACT AND HOLDING THAT THE ASSESS MENT ORDER IS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF TH E REVENUE AND THEREBY SETTING ASIDE THE ORDER OF THE LEARNED ASSESSING 2 ITA NO.690 /MDS/2015 OFFICER FOR DE NOVO CONSIDERATION AND TO MAKE FRESH ASSESSMENT BY ADOPTING UNIFORM ANNUAL RENTAL VALUE. 3. BRIEF FACTS ARE THAT THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2010-11 ON 01.12.2011 DECLARING ITS TOTAL INCOME AS NIL. ON SC RUTINY, THE LEARNED CIT OBSERVED THAT THE ASSESSEE COMPANY LET OUT A PORTION OF ITS PROPERTY TO M/S. NILGIRI DAIRY FARM LTD., AND ANOTHER PORTION TO THE ASSESSEE COMPANYS SISTER CO NCERN M/S.SABARI INN PVT.LTD. FURTHER IT WAS OBSERVED TH AT THE RENT RECEIVED BY THE ASSESSEE COMPANY FROM ITS SISTER CO NCERN WAS VERY MUCH LESS THAN THE RENT RECEIVED FROM THE THIRD PARTY. SINCE THE LEARNED ASSESSING OFFICER WHILE FI NALIZING THE ASSESSMENT HAD NOT VERIFIED THESE ASPECTS AND MEREL Y ACCEPTED THE ADMITTED RENTAL VALUE BY THE ASSESSEE WITHOUT TAKING INTO ACCOUNT OF THE PROVISIONS OF SECTION 23 & 22 OF THE INCOME TAX ACT, THE LEARNED CIT INVOKED HIS POWERS UNDER SECTION 263 OF THE ACT AND REMITTED THE MATTER BACK TO THE FILE OF THE LEARNED ASSESSING OFFICER WITH A DIRECTION T O MAKE FRESH ASSESSMENT BY ADOPTING UNIFORM ANNUAL RENTAL VALUE FOR 3 ITA NO.690 /MDS/2015 ALL THE PORTIONS OF THE PROPERTIES LET OUT AND ARRI VE AT THE INCOME FROM HOUSE PROPERTY ACCORDINGLY. 4. BEFORE US, THE LEARNED AUTHORIZED REPRESENTATIVE SUBMITTED THAT THE ISSUE OF ANNUAL RENTAL VALUE WAS DULY CONSIDERED BY THE LEARNED ASSESSING OFFICER AND THE REFORE, THE LEARNED COMMISSIONER OF INCOME TAX HAS NO POWER UNDER SECTION 263 OF THE ACT TO SUBSTITUTE THE VAL UE ADOPTED BY THE ASSESSING OFFICER WHILE FRAMING THE ORIGINAL ASSESSMENT. IT WAS THEREFORE PLEADED THAT THE ORDER OF THE LEARNED ASSESSING OFFICER MAY BE CONFIRMED. 5. THE LEARNED DEPARTMENTAL REPRESENTATIVE ON THE O THER HAND RELIED ON THE ORDER OF THE LEARNED COMMISSIONE R OF INCOME TAX AND ARGUED IN SUPPORT OF THE SAME. 6. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY PER USED THE MATERIALS AVAILABLE ON RECORD AND ALSO THE ORDE R OF THE LEARNED CIT. THE LEARNED CIT HAS JUDICIOUSLY BROUG HT OUT THE PROVISIONS OF SECTION 23 & 22 OF THE ACT WHILE INVO KING HIS POWERS UNDER SECTION 263 OF THE ACT. THEREFORE, TO A CERTAIN EXTENT WE FIND MERIT IN HIS ORDER. THE LEARNED ASSE SSING 4 ITA NO.690 /MDS/2015 OFFICER HAS ALSO PASSED A NON-SPEAKING ORDER UNDER SECTION 143(3) OF THE ACT. FOR THE AFORESAID REASON, WE UP HOLD THE ORDER OF THE LEARNED CIT, HOWEVER MODIFY THE SAME WITH AN OPEN REMAND TO THE LEARNED ASSESSING OFFICER FOR DE TERMINING THE ANNUAL VALUE OF THE PROPERTY UNDER SECTION 23 A ND 22 OF THE ACT IN ACCORDANCE WITH THE PROVISIONS OF THE AC T AFRESH. 7. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PAR TLY ALLOWED AS INDICATED HEREINABOVE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 17 TH FEBRUARY, 2016 SD/- SD/- ( . . . ) ( . ) (N.R.S.GANESAN) ( A.M OHAN ALANKAMONY ) # % / JUDICIAL MEMBER % / ACCOUNTANT MEMBER # /CHENNAI, ( /DATED 17 TH FEBRUARY, 2016 SOMU *+ ,+ /COPY TO: 1. APPELLANT 2. RESPONDENT 3. - () /CIT(A) 4. - /CIT 5. + 1 /DR 6. /GF