VIDYABEN BHAGWAN KOTAK, MUMBAI V. DCIT CEN CIR 6(1), MUMBAI

ITA 7182/MUM/2016

• Counselvise Citation: [2017] 126 COUNSELVISE.COM (IT) 9290 (ITAT-MUMBAI)
• Duration Of Justice: 9 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-09-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2006-2007
• Appeal Filed On: 06-12-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K MITRA
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL SMC , BENCH MUMBAI BEFORE SHRI R.C.SHARMA, AM ITA NO. 7182 / MUM/20 1 6 ( ASSESSMENT YEAR : 2006 - 07 ) ITA NO. 7183/ MUM/20 16 ( ASSESSMENT YEAR : 2007 - 08 ) ITA NO. 7184/ MUM/20 16 ( ASSESSMENT YEAR : 2008 - 09 ) ITA NO. 7185/ MUM/20 16 ( ASSESSMENT YEAR : 2009 - 10 ) ITA NO. 7186/ MUM/20 16 ( ASSESSMENT YEAR : 2010 - 11 ) SMT. VIDYABEN BHAGWAN KOTAK 16, BANK STREET MUMBAI 400 001 VS. DCIT CEN CIR 6(4) ERSTWHILE KNOWN AS ASST. CIT CEN CIR 39 R.NO.1926, 19 TH FLOOR, AIR INDIA BUILDING NARIMAN POINT, MUMBAI - 400021 PAN/GIR NO. AGQPK9573N APPELLANT ) .. RESPONDENT ) ASSESSEE BY MS. USHA DALAL REVENUE BY SHRI S.K. MITRA DATE OF HEARING 06 / 09 /201 7 DATE OF PRONOUNCEME NT 20 / 09 /201 7 / O R D E R PER R.C .SHARMA (A.M) : THESE ARE APPEALS FILED BY ASSESSEE AGAINST THE ORDER OF CIT(A) - 54, MUMBAI DATED 12/09/2016 FOR A.Y.2006 - 07 TO 2010 - 11 IN THE MATTER OF ORDER PASSED U/S.143(3) / 143(3) R.W.S.153A OF THE IT ACT. 2. ONLY GRIEVANCE OF ASSESSEE IN ALL THE YEA RS PERTAIN TO ADDITION MADE ON ACCOUNT OF DEEMED NOTIONAL RENTAL INCOME FROM PROPERTIES OWNED BY HER. 3. RIVAL CONTENTIONS HAVE BEEN HEARD AND RECORD PERUSED. ITA NO. 7182 - 7186/MUM/2016 SMT. VIDYABEN BHAGWAN KOTAK 2 4. FACTS IN BRIEF ARE THAT THE ASSESSEE HAD FILED ORIGINAL RETURN FOR A.Y.2006 - 07 ON 28/07/2006 D ECLARING TOTAL INCOME OF RS.18,82,917/ - . THE ASSESSMENT U/S.143(3) OF THE ACT WAS COMPLETED ON 27/02/2008. A SEARCH ACTION WAS CARRIED OUT IN THE CASE OF J.M. BAXI GROUP ON 20/03/2012. DURING THE COURSE OF SEARCH, THE LOCKERS OF ASSESSEE SMT. VIDYABEN B KO TAK HAVE BEEN SEARCHED. THE LD. AO HAS OBSERVED THAT DURING THE COURSE OF SEARCH PROCEEDINGS WHILE OPERATING PO AT LOCKER NO. 746, DETAILS OF VARIOUS PROPERTIES HELD BY THE ASSESSEE AND HER FAMILY MEMBERS OR CONCERNS, IN WHICH FAMILY MEMBERS ARE INTERESTED , WERE FOUND. THE DETAILS OF SUCH PROPERTIES WHICH WERE OWNED BY THE A SSESSEE , EITHER IN FULL OR PART ARE AS UNDER. S.NO. DESCRIPTION OF THE PROPERTY WITH SHARE SQ. MT. PERTAINED TO THE ASSESSEE SQ. FT. PERTAINED TO THE A SSESSEE 1 1 /2 ND UNDIVIDED SHARE IN FLAT NO. 1 6 AT KALPANA, 96 NETAJI SUBHASH ROAD, MUMBAI 147.55 1587.64 (SOP) 2 1 /3 RD UNDIVIDED SHARE IN FLAT NO. 18 AT KALPANA, 96, NETAJI SUBHASH ROAD, MUMBAI 52.96 569.85 3 FLAT AT JHOOTHIKA CO - OPERATIVE HOUSING SOCIETY LIMITED, FLAT NO.L, 22, NAUSHIR BHARUCHA ROAD, MUMBAI 38.57 416.01 4 FLAT AT WEST WIND, FLAT NO. 402, PLOT NO. 170/1, GANDHI GRAM ROAD, JUHU, MUMBAI - 400 049 241 5. THE LD. AO H AS ALSO OBSERVED THAT THOUGH THE ASSESSEE OWNED THE ABOVE REFERRED PROPERTIES, SHE HAD NOT OFFERED ANY DEEMED RENT FROM THESE PROPERTIES, ITA NO. 7182 - 7186/MUM/2016 SMT. VIDYABEN BHAGWAN KOTAK 3 THOUGH THE A SSESSEE SHOULD HAVE OFFERED DEEMED RENT FROM THEM EXCEPT ONE PROPERTY WHICH WAS CLAIMED/TREATED AS SOP. AC CORDINGLY THE LD. AO HAD ISSUED SHOW CAUSE NOTICE DATED 10.01.2014 REQUESTING THE A SSESSEE TO EXPLAIN AS TO WHY THE DEEMED RENT SHOULD NOT BE CALCULATED ON THE PROPERTIES OTHER THAN THE ONE TREATED AS SOP. IN RESPONSE TO THE SAME THE A SSESSEE SUBMITTED DET AILED EXPLANATIONS BEFORE THE LD. AO AND EXPLAINED THAT AS PER PROVISIONS OF SECTION 23, IF AN ASSESSEE HAS A HOUSE PROPERTY WHICH CONSISTS OF TWO OR MORE RESIDENTIAL UNITS AND ALL SUCH UNITS ARE SELF OCCUPIED, THE ANNUAL VALUE OF THE ENTIRE HOUSE PROPERTY SHALL BE TAKEN AS NIL AS THERE IS ONLY ONE HOUSE PROPERTY THOUGH IT HAS MORE THAN ONE RESIDENTIAL UNITS. AFTER CONSIDERING THE VARIOUS CONTENTIONS RAISED BY THE ASSESSEE THE LD. AO REJECTED THE CLAIM OF THE ASSESSEE THAT WHERE SHE HAS OCCUPIED MORE THAN ONE RESIDENTIAL UNIT THERE ALL SUCH RESIDENTIAL UNITS SHOULD BE CONSIDERED ONE RESIDENTIAL HOUSE AND TREATED AS SOP. 6. THE INCOME FROM HOUSE PROPERTY OF FLAT NO. 18. KALPANA IS WORKED OUT AS UNDER : - L/3 RD UNDIVIDED SHARE IN FLAT NO. 18 AT KALPANA, MUMBA I RS. 2,80,3661 - LESS: DEDUCTION U/S 24 AT 30% RS. 84,110/ - ADDITION MADE RELATING TO FLAT NO. 18, KALPANA, MUMBAI RS. 1,96,256/ - 7. THE INCOME FROM HOUSE PROPERTY AT FLAT NO.1 AT JOOTHIKA CO - OPERATIVE HOUSI NG SOCIETY, IS WORKED OUT AS UNDER . FLAT NO. 1 AT JHOOTHIKA CO - OPERATIVE HOUSING SOCIETY LIMITED RS. 1,69,732/ - LESS: DEDUCTION U/S 24 AT 30% RS. 50,920/ - ADDITION MADE FLAT NO. 1 AT JHOOTHIKA CO - OPERATIVE HOUSING SOCIETY LIMITED, NAUSHIR BHARUCHA ROAD, MUMBAI RS. L,1 8,812 / - 8. THE INCOME FROM HOUSE PROPERTY AT FLAT NO. 402. WEST WIND, JUHU. MUMBAI IS WORKED OUT AS UNDER. ITA NO. 7182 - 7186/MUM/2016 SMT. VIDYABEN BHAGWAN KOTAK 4 FLAT AT NO. 402 AT WEST WIND, JUHU, MUMBAI RS. 78,084/ - LESS: DEDUCTION U/S 24 AT 30% RS. 23,425/ - ADDITION MADE FLAT NO. 402, A T WEST WIND, JUHU, MUMBAI RS. 54,659/ - THEREFORE, THE NOTIONAL RENTAL INCOME IS DETERMINED AT RS. 3,69,727/ - 9 . BY THE IMPUGNED ORDER, CIT(A) CONFIRMED THE ACTION OF THE AO AGAINST WHICH ASSESSEE IS IN FURTHER APPEAL BEFORE US. 10. I HAVE CONSIDERE D RIVAL CONTENTIONS AND CAREFULLY GONE THROUGH THE ORDERS OF THE AUTHORITIES BELOW AND FOUND FROM RECORD THAT FLAT NO.16 AND 18 AT KALPANA, MARINE DRIVE WERE D UPL E X FLATS USED BY THE ASSESSEE. I ALSO FOUND THAT FLAT NO.16 AND FLAT NO.18 ON 5 TH AND 6 TH FLOO R RESPECTIVELY HAVING COMMON STAIRCASE ATTACHED TO BOTH THE FLOORS INSIDE THE SAID PREMISES AND HENCE, IT CAN BE CONSIDERED AS ONE HOUSE WHICH IS ADJACENT TO EACH OTHER. ACCORDINGLY, I DIRECT THE AO TO DELETE ADDITION MADE IN RESPECT OF FLAT NO.18 FOR THE A.Y.2006 - 07 TO 2009 - 10. HOWEVER, FROM A.Y.2010 - 11, THE ASSESSEE HAS TAKEN FLAT NO. 8 & 9 AT KALPANA, MARINE DRIVE AS SOP, THEREFORE, THERE IS NO REASON TO DISTURB THE NOTIONAL VALUE TAKEN BY THE AO FOR FLAT NO. 16 & 18 AT KALPANA, WHILE MAKING ADDITION U/S .22 OF THE IT ACT. 11. FLAT NO.1, JOOTHICA CO - OPERATIVE HOUSING SOCIETY LTD., 22, NAUSHIR BHARUCHA ROAD, MUMBAI 400 007 WAS CLAIMED TO BE NOT IN A HABITABLE STATE AND THEREFORE IT DID NOT HAVE A READY MARKETABLE VALUE. IN THE INTEREST OF JUSTICE, I REST ORE THIS ISSUE TO THE FILE OF AO FOR VERIFYING FACTUAL POSITION AND TO DECIDE THE SAME AFRESH AS PER LAW. 12. IN RESPECT OF FLAT NO.402, WEST WIND, PLOT NO.170/1, GANDHI GRAM ROAD, JUHU, MUMBAI 400 049 , WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF LOWER AUTHORITIES, ACCORDINGLY, WE CONFIRM THE ADDITION MADE BY AO U/S.22. ITA NO. 7182 - 7186/MUM/2016 SMT. VIDYABEN BHAGWAN KOTAK 5 1 3 . IN THE RESULT, APPEALS OF THE ASSESSEE ARE ALLOWED IN PART IN TERMS INDICATED HEREINABOVE. O RDER PRONOUNCED IN THE OPEN COURT ON THIS 20 / 09 /2017 S D/ - ( R.C.SHARMA ) ACCOUNTANT MEMBER MUMBAI ; DATED 20 / 09 /201 7 KARUNA SR. PS COPY OF THE ORDER FORWARDED TO : BY ORDER, ( ASSTT. REGISTRAR) ITAT, MUMBAI 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY//