JASHVANT C. RAVAL, MUMBAI V. ASST CIT 11(2), MUMBAI

ITA 6913/MUM/2014

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 3189 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 7 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-06-2016
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: J
• Assessment Year: 2010-2011
• Appeal Filed On: 13-11-2014
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASGHAR ZAIN
• Keywords: Additional evidence

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL J BENCH, MUM BAI BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER, AND SHRI SANJAY GARG, JUDICIAL MEMEBR ./ I.T.A. NO. 6913/MUM/2014 ( / / / / ASSESSMENT YEAR: 2010-11) JASHVANT C. RAVAL RAVAL HOUSE, 18 TH ROAD, KHAR WEST. MUMBAI-400 052. / VS. ASST. COMMISSIONER OF IT,11(2), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI-400 020. ./ ./PAN/GIR NO. AABPR 7548F ( /APPELLANT ) : ( / RESPONDENT ) / APPELLANT BY : MS. AARTI SATHE / RESPONDENT BY : SHRI ASGHAR ZAIN / // / DATE OF HEARING : 08/06/2016 / DATE OF PRONOUNCEMENT : 15/06/2016 / O R D E R PER SANJAY GARG, JUDICIAL MEMBER: THE PRESENT APPEAL HAS BEEN PREFERRED BY THE ASSESS EE AGAINST THE ORDER DATED 01.09.2014 OF THE COMMISSIONER OF INCOME TAX (APPEALS) - 3, [HEREINAFTER REFERRED TO AS THE CIT(A)] RELEVANT TO ASSESSMENT Y EAR 2010-11. 2 ITA NO. 6913/MUM/2014 JASHVANT C. RAVAL VS. ACIT 2. THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. ACCEPTING THE NOTIONAL RENT OF RS.4,00,000 (RAVAL HOUSE) AND RS.7,00,000 (LABURNUM LANE HOUSE) FOR THE FULL YEAR ON THE BASI S OF RATIO OF 8% RETURN ON INVESTMENT LAID DOWN IN RADHA DEVI DALMIYA VS. C IT (1982) 125 ITR 134 AND BIPPINBHAI VADILAL FAMILY TRUST VS. CIT (19 94) 208 ITR 1005, WITHOUT GOING INTO THE SUBMISSIONS MADE BY THE APPE LLANT. 2. ACCEPTING AS CORRECT RENT ASSESSED BY THE AO FROM R AVAL HOUSE AT RS.400,000 FOR THE WHOLE FINANCIAL YEAR AS AGAINST RS.60,000, RENT ACTUALLY RECEIVED BY THE ASSESSEE FROM THE FIRM JCR & CO. FO R THREE MONTHS (LET OUT PERIOD). 3. ACCEPTING AS CORRECT RENT ASSESSED BY THE AO FROM L ABURNUM LANE HOUSE AT RS.7,00,000 FOR THE WHOLE FINANCIAL YEAR AS AGAINST RS.81,000 RENT ACTUALLY RECEIVED BY THE ASSESSEE FROM THE FIRM JCR & CO. FO R NINE MONTHS (LET OUT PERIOD). 4. REJECTING THE ADDITIONAL EVIDENCE IN RESPECT OF REN T FROM RAVAL HOUSE PROVING THAT THE PREMISES WAS ONLY PARTLY LET OUT ( 1/3 RD ) AND ONLY FOR PART OF THE YEAR (3 MONTHS). 3 ITA NO. 6913/MUM/2014 JASHVANT C. RAVAL VS. ACIT 5. REJECTING ADDITIONAL EVIDENCE IN RESPECT OF RENT FR OM LABURNUM LANE HOUSING PROVING THAT PREMISES WAS ONLY PARTLY LET O UT AND ONLY FOR PAR OF THE YEAR (9 MONTHS). 6. REJECTING THE ADDITIONAL EVIDENCE IN RESPECT OF REN T FROM LABURNUM LANE HOUSING PROVING THAT THE RENT RECEIVED IN THE VICIN ITY AT ARMSS LENGTH WAS RS.14,500 P.M. 7. REJECTING THE ADDITIONAL EVIDENCE IN RESPECT OF REN T FOR LABURNUM LANE HOUSE PROVING THAT RENT QUOTED IN THE PUBLIC DOMAIN FOR THE AREA WHERE LABURNUM LANE HOUSE WAS LOCATED (BALEWADI, PUNE) RA NGED BETWEEN 20,000 TO 25,000 P.M. 3. THE ONLY ISSUE RAISED BY ASSESSEE THROUGH ABOVE GROUNDS OF APPEAL IS RELATING TO ASSESSMENT OF HOUSE PROPERTY INCOME/ANN UAL LETTING VALUE OF THE TWO HOUSES OWNED BY THE ASSESSEE. 4. THE BRIEF FACTS OF THE CASE ARE THAT DURING THE COURSE OF ASSESSMENT PROCEEDINGS, THE ASSESSING OFFICER NOTED THAT THE A SSESSEE HAD REFLECTED THREE HOUSE PROPERTIES IN HIS BALANCE-SHEET AGAINST WHICH THE ASSESSEE HAD SHOWN ANNUAL LETTING VALUE AS FOLLOWS: 4 ITA NO. 6913/MUM/2014 JASHVANT C. RAVAL VS. ACIT 1. ALV FROM FLAT ON VEERA DESAI ROAD, ANDHERI (WEST ), BEING LOP PROPERTY RS.24,000/-. 2. ALV FROM RAVAL HOUSE, MUMBAI, BEING LOP PROPERTY RS.60,000/-. 3. ALV OF FLAT ON LABURNUM ROAD, PUNE-RS.81,000/- THE ASSESSING OFFICER WAS OF THE OPINION THAT THE R ENT SHOWN TO HAVE BEEN RECEIVED BY THE ASSESSEE WAS VERY NOMINAL. HE THERE FORE ASKED THE ASSESSEE TO EXPLAIN IN THIS RESPECT. AFTER CONSIDERING THE SUBM ISSIONS OF THE ASSESSEE, THE ASSESSING OFFICER HELD THAT THE PROPERTY AT MERIDIA N APARTMENTS IN ANDHERI (W) WAS SELF OCCUPIED PROPERTY OF THE ASSESSEE AND HE A CCORDINGLY COMPUTED THE ALV OF THE SAID PROPERTY AT NIL. IN RESPECT OF RAVAL HO USE PROPERTY, THE ASSESSEE EXPLAINED THAT THE TENANT M/S. JCR & CO. WAS A SIST ER CONCERN OF THE ASSESSEE AND THEREFORE THERE WAS NO RENTAL AGREEMENT EXECUTED WI TH THE SAID CONCERN. THE ASSESSEE ALSO FILED THE COPY OF MUNICIPAL RENTAL VA LUATION OF THE PROPERTIES IN THE AREA. THE ASSESSING OFFICER, HOWEVER, FURTHER REJEC TED THE MUNICIPAL VALUE STATING THE SAME TO BE OUTDATED AND ESTIMATED THE ANNUAL LE TTING VALUE AT 8% OF THE VALUE OF THE PROPERTY SHOWN IN THE BALANCE SHEET. LIKEWIS E FOR THE LABURNUM PROPERTY, AT PUNE, THE ASSESSING OFFICER ESTIMATED ANNUAL LETTIN G VALUE OF THE SAME AT RS. 7,00,000/-. 5 ITA NO. 6913/MUM/2014 JASHVANT C. RAVAL VS. ACIT 5. BEING AGGRIEVED BY THE ABOVE ACTION OF THE AO, T HE ASSESSEE FILED APPEAL BEFORE THE LD. CIT(A). BEFORE THE CIT(A), THE ASSES SEE SUBMITTED CERTAIN ADDITIONAL EVIDENCE AND CONTENDED THAT IN CASE OF R AVAL HOUSE PROPERTY ONLY 200 SQFT CONSTITUTING 1/3 RD OF THE FLOOR AREA, HAS BEEN RENTED OUT FOR 3 MONTH S ONLY AT THE RATE OF RS.20,000/- PER MONTH. AS REGARDS THE L ABURNUM PROPERTY, THE ASSESSEE STATED THAT THE HOUSE WAS NEWLY CONSTRUCTED AND WAS ONLY PARTLY LET OUT DURING THE YEAR FOR NINE MONTHS ONLY. THE ASSESSEE RELIED UPON THE MUNICIPAL VALUATION AND ALSO COMPARATIVE RENTALS OF OTHER PROPERTIES IN THE VICINITY. IN THIS RESPECT, THE LD. CIT(A) CALLED UPON THE REMAND REPORT IN RESPECT OF ADDITIONAL EVIDENCE SUBMITTED BY THE ASSESSEE UNDER RULE 46A OF THE I.T. ACT. IN THE REMAND REPORT, THOUGH THE ASSESSING OFFICER NOTED THAT FROM THE PERUSAL OF TH E RECORDS AND ALSO FROM THE ADDITIONAL EVIDENCE, IT WAS NOTICED THAT RAVAL HOUS E WAS LET OUT FOR A PERIOD OF 3 MONTHS AND LABURNUM HOUSE WAS LET OUT FOR 9 MONTHS. HOWEVER, THE NOTIONAL RENT WAS WORKED OUT IN RESPECT OF BOTH THE PROPERTIES FO R WHOLE YEAR. HOWEVER IT WAS NOT ESTABLISHED FROM SUFFICIENT EVIDENCES THAT WHAT PORTION OF THE PROPERTY HAD BEEN RENTED OUT. THE LD. CIT(A) FURTHER OBSERVED TH AT THE ASSESSEE HAD NOT FURNISHED WRITTEN AGREEMENT WITH MS. JCR & CO WITH REGARD TO LETTING OF THE PROPERTIES BY THE ASSESSEE. HE ALSO CONSIDERED THAT THE ENTIRE PROPERTY WAS LET OUT 6 ITA NO. 6913/MUM/2014 JASHVANT C. RAVAL VS. ACIT BY THE ASSESSEE AND REJECTED THE CONTENTION OF THE ASSESSEE THAT ONLY THE PART OF THE PROPERTY WAS LET OUT. HE THEREFORE CONFIRMED THE AL V OF THE PROPERTIES AS WAS ESTIMATED BY THE AO. AGGRIEVED BY THE ORDER OF CIT( A), THE ASSESSEE HAS COME IN APPEAL BEFORE US. 7. THE LD. COUNSEL FOR THE ASSESSEE BEFORE US, HAS SUBMITTED THAT THE LOWER AUTHORITIES HAVE NOT CORRECTLY APPRECIATED ADDITION AL EVIDENCES FILED BY THE ASSESSEE BEFORE THEM. SHE HAS FILED A LETTER DATED 8 TH JUNE,2006 POINTING OUT CERTAIN EVIDENCES TO CONTEND THAT THE RIVAL HOUSE PROPERTY WAS OCCUPIED BY THE ASSESSEE ONLY ON 31-08-2009 AND FURTHER THAT THE LABURNUM PR OPERTY AT PUNE, WAS ACQUIRED ONLY ON 19.06.2009 AND LETTING OUT WAS MADE FROM JU LY 2009. SHE HAS ALSO RELIED UPON THE MUNICIPAL ANNUAL RENTAL VALUATION AND COMP ARATIVE RENTAL VALUE OF OTHER PROPERTIES IN THE VICINITY. SHE HAS FURTHER SUBMITT ED THAT THE FOLLOWING DOCUMENTS SOUGHT TO BE RELIED UPON BY HER ARE VERY MUCH NECES SARY FOR THE JUST DECISION OF THE CASE: 1. RAVAL HOUSE, KHAR WEST, MUMBAI A. OCCUPATION CERTIFICATE DATED 31.08.2009 B. MUNICIPAL ASSESSMENT BILL MENTIONING DATE OF FIRST ASSESSMENT BILL AS 21.12.2009 7 ITA NO. 6913/MUM/2014 JASHVANT C. RAVAL VS. ACIT C. SOCIETY CERTIFICATE DATED 27.04.2010 STATING THAT R AVAL HOUSE WAS OCCUPIED FROM W.E.F. 21.12.2009 D. MUNICIPAL ARV DATED 03.07.2010 E. CONFIRMATION FROM JCR & CO. FOR RENT PAID FOR THREE MONTHS I.E. FROM JAN 2010 TO MARCH 2010 2. LABURNUM ROAD, PUNE A. PURCHASE AGREEMENT DATED 19.06.09 FOR FLAT NO. A/4 EVIDENCING THAT LET OUT WAS MADE ONLY FROM JULY 2009. B. PUNE MUNICIPAL ASSESSMENT BILL (ALV IS ALSO MENTION ED) C. COMPARABLE LEAVE & LICENSE AGREEMENT DATED 28.09.20 12 OF THIRD PARTY IN LABURNUM LANE D. LEAVE AND LICENSE AGREEMENT DATED 03.10.2008 OF JCR & CO WITH THIRD PARTY IN BANER ROAD, PUNE. E. CONFIRMATION FROM JCR & CO. FOR RENT PAID FOR NINE MONTHS I.E. JULY 09 TO MARCH 2010. SHE HAS REQUESTED THAT THE ASSESSING OFFICER MAY BE DIRECTED TO CONSIDER THE ABOVE DOCUMENTS WHICH ARE IN THE NATURE OF CLINCHIN G EVIDENCE WHICH GO TO THE ROOT OF THE CASE. 8 ITA NO. 6913/MUM/2014 JASHVANT C. RAVAL VS. ACIT 8. ON THE OTHER HAND, THE LD. D.R. HAS RELIED UPON THE FINDING OF THE LOWER AUTHORITIES. 9. CONSIDERING THE RIVAL SUBMISSIONS OF BOTH THE LD . REPRESENTATIVES WE FIND THAT THE DOCUMENTS SOUGHT TO BE PRODUCED BY THE LD. AR ARE VERY MUCH RELEVANT AND NECESSARY FOR THE JUST AND PROPER DECISION OF T HE CASE. IN OUR VIEW, INTEREST OF JUSTICE WILL BE BEST SERVED IF THE ASSESSEE IS GRAN TED THE OPPORTUNITY TO FURNISH BEFORE THE ASSESSING OFFICER THE RELEVANT EVIDENCES IN SUPPORT OF HIS CLAIM. WE, THEREFORE, REMAND BACK THE MATTER TO THE FILE OF TH E AO WITH THE DIRECTION TO ADMIT THE ADDITIONAL EVIDENCES, IF ANY, SOUGHT TO BE FURN ISHED BY ASSESSEE IN SUPPORT OF HIS CLAIM AND THEN TO DECIDE THE ISSUE AFRESH AS PE R LAW, AFTER GIVING A REASONABLE OPPORTUNITY TO THE ASSESSEE OF BEING HEARD AND ALSO AFTER CONSIDERING THE EVIDENCES SO FURNISHED BY THE ASSESSEE. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS HE REBY ALLOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT ON 15 JUNE, 2016 SD/- SD/- (G.S. PANNU) (SANJAY GARG) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; DATED : 15.06.2016 PS. ASHWINI 9 ITA NO. 6913/MUM/2014 JASHVANT C. RAVAL VS. ACIT / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. ( ) / THE CIT(A) 4. / CIT - CONCERNED 5. , , / DR, ITAT, MUMBAI 6. / GUARD FILE / BY ORDER, / // / (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI