DCIT CC 38, MUMBAI V. AMBRISH RANBIR MAKER, MUMBAI

ITA 7340/MUM/2011

• Counselvise Citation: 734019914 RSA 2011
• Duration Of Justice: 3 year(s) 9 month(s) 16 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 19-08-2015
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 27-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 02-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S P WALIMBE
• Section: 143(3)

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH A BEFORE SHRI G.S. PANNU, ACCOUNTANT MEMBER AND SHRI SANJAY GARG, JUDICIAL MEMBER I.T.A. NO. 7339 /MUM/2011 ASSESSMENT YEAR : 2008-09 THE ACIT,CC - 38, ROOM NO.32(1), GROUND FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 VS. SHRI RANBIR APAR MAKER, MAKER TOWER F 1 ST FLOOR, CUFFE PARADE, MUMBAI 400 005. PAN : AACPM 5066G ( APPELLANT ) .. ( RESPONDENT ) I.T.A. NO. 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 THE ACIT,CC - 38, ROOM NO.32(1), GROUND FLOOR, AAYKAR BHAVAN, M.K.ROAD, MUMBAI 400 020 VS. SHRI AMBRISH RANBIR MAKER, MAKER TOWER F 1 ST FLOOR, CUFFE PARADE, MUMBAI 400 005. PAN : AHJPM 5754F (APPELLANT ) .. ( RESPONDENT ) APPELLANT BY SHRI S.P. WALIMBE R E SPONDENT BY : SHRI PRAKASH JOTWANI , DATE OF HEARING : 27.7.2015 DATE OF PRONOUNCEMENT : 19/08 /2015 I.T.A. NO. 7339& 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 2 O R D E R PER G.S. PANNU, AM: THESE TWO CAPTIONED RESPONDENT ASSESSEES ARE CO-OWNERS OF A PROPERTY AND THE ONLY ISSUE IN THE CAPTIONED APPEAL S RELATE TO DETERMINATION OF THE ANNUAL VALUE OF THE PROPERTY F OR THE PURPOSES OF ASSESSMENT UNDER THE HEAD INCOME FROM HOUSE PROPE RTY. SINCE A COMMON ISSUE IS INVOLVED IN BOTH APPEALS, THEY HAVE BEEN CLUBBED AND HEARD TOGETHER AND A CONSOLIDATED ORDER IS BEING P ASSED FOR THE SAKE OF CONVENIENCE AND BREVITY. 2. THE APPEAL OF THE REVENUE IN THE CASE OF AMRISH RANBIR MAKER, (I.E.ITA NO.7340/MUM/2011) IS TAKEN AS THE LEAD CAS E. THIS APPEAL IS DIRECTED AGAINST THE IMPUGNED APPELLATE ORDER D ATED 10/08/2011 PASSED BY CIT(A)-41, MUMBAI PERTAINING TO THE ASSES SMENT YEAR 2008- 09, WITH REFERENCE TO THE ASSESSMENT ORDER DATED 16 /11/2010, PASSED IN TERMS OF SECTION 143(3) OF THE INCOME TAX ACT,19 61 ( IN SHORT THE ACT). 3. BRIEFLY PUT THE RELEVANT FACTS ARE THAT ASSESSE E IS OWNING 3/4 TH SHARE IN FLAT NO.151/152 AT MAKER TOWER L , CUFF E PARADE, MUMBAI 400 005, WHICH WAS RENTED OUT TO ONE M/S. ROBO INDIA FINANCE PVT. LTD. FOR AN YEARLY RENT OF RS.1,80,000/-. ON THE B ASIS OF THE ACTUAL RENT RECEIVED, ASSESSEE DECLARED INCOME FROM HOUSE PROPE RTY AT RS.94,500/- AFTER CLAIMING STATUTORY DEDUCTION UNDER SECTION 2 4 OF THE ACT. THE ASSESSING OFFICER, HOWEVER, NOTICED THAT IN THE CAS E OF ONE MR. PUNEET I.T.A. NO. 7339& 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 3 R.GUPTA, WHO WAS ALSO ASSESSED BY HIM, FLAT NO.192 B LOCATED IN THE SAME BUILDING AS OF THE ASSESSEE, HAD RENTED OUT H IS TO M/S. JM MORGAN STANLEY PVT. LTD., FOR AN AMOUNT OF RS.3,0 0,000/- PER MONTH. THE FLAT NO.192B BELONGING TO MR. PUNEET R. GUPTA WAS ADMEASURING 1700 SQ.FTS., WHEREAS FLAT NO.151/152 OWNED BY THE ASSESSEE WAS OF 3060 SQ.FTS. BY ADOPTING THE RENTALS EARNED BY M R. PUNEET R. GUPTA, THE ASSESSING OFFICER CONCLUDED THAT THE FLAT OWNED BY THE ASSESSEE OUGHT TO HAVE FETCHED A RENTAL OF RS.5,40,000/- PER MONTH, WHICH ACCORDING TO HIM WAS THE ANNUAL VALUE OF THE PROPE RTY LIABLE TO BE CONSIDERED FOR ASSESSMENT OF ASSESSEES INCOME UN DER THE HEAD INCOME FROM HOUSE PROPERTY. ON THE AFORESAID , T HE ASSESSING OFFICER WORKED OUT THE ANNUAL VALUE OF THE PROPERTY AT RS.4 5,36,000/-, AFTER CONSIDERING THE STATUTORY DEDUCTION UNDER SECTION 2 4 OF THE ACT AND SINCE ASSESSEES SHARE IN THE PROPERTY WAS 3/4 TH , THE ASSESSEES SHARE WAS WORKED OUT AT RS.34,02,000/-. SINCE ASSESSEE H AD ALREADY DECLARED AN INCOME OF RS.94,500/-, THE BALANCE OF R S.33,10,500/- WAS ADDED TO THE RETURNED INCOME. 4. THE ASSESSEE CARRIED THE MATTER IN APPEAL BEFORE CIT(A) AND POINTED OUT THAT THE ASSESSING OFFICER WAS WRONG IN MAKING THE IMPUGNED ADDITION, IN AS MUCH AS THE ACTION OF THE ASSESSING OFFICER WAS IN VIOLATION OF THE PROVISIONS OF SECTION 23(1) OF THE ACT. THE ASSESSEE POINTED OUT THAT AS PER PROVISIONS OF SECT ION 23(1) OF THE ACT, FOR THE PURPOSES OF DETERMINATION OF ANNUAL VALUE, THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO BE LET FROM YEAR TO YEAR I.T.A. NO. 7339& 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 4 OR ACTUAL RENT RECEIVED, WHICHEVER IS HIGHER IS TO BE CONSIDERED. THE ASSESSEE POINTED OUT THAT THE ANNUAL RATABLE VALUE DETERMINED BY THE LOCAL MUNICIPAL CORPORATION WAS RS.25,477/-, WHICH WAS LOWER THAN THE ACTUAL RENT RECEIVED AND; THEREFORE, THE INCOME DEC LARED BY THE ASSESSEE BASED ON THE ANNUAL VALUE EQUIVALENT TO THE ACTU AL RENT RECEIVED WAS QUITE JUSTIFIED. THE CIT(A) CONSIDERED THE SUBMIS SIONS PUT FORTH BY THE ASSESSEE AND BY RELYING ON THE DECISION OF THE TRIB UNAL,IN THE CASE OF ITO VS. SAHAR DEVELOPERS, ITA NO.3164/MUM/2009 DATE D 28/01/2011 AND IN THE A CASE OF ACIT VS. SHRI SANDEEP J. SHAH , ITA NO.1382/MUM/2008 DATED 27/04/2011 AND ALSO THE JUDG MENT OF HONBLE BOMBAY HIGH COURT IN THE CASE OF SMT. SMI THA BEN N. AMBANI, 323 ITR 104(BOM), DELETED THE ADDITION MADE BY THE ASSESSING OFFICER OBSERVING THAT THE ANNUAL RATABLE VALUE OF THE PROPERTY DETERMINED BY THE MUNICIPAL CORPORATION WAS LOWER T HAN THE ACTUAL RENT RECEIVED AND; THEREFORE, THE INCOME DECLARED B Y THE ASSESSEE UNDER THE HEAD INCOME FROM HOUSE WAS QUITE JUSTIFIED. AGAINST THE DELETION OF ADDITION BY THE CIT(A), REVENUE IS IN APPEAL BEF ORE US. 5. BEFORE US THE ONLY POINT RAISED BY THE REVENUE I S BASED ON THE CASE OF MR. PUNEET R. GUPTA REFERRED BY THE ASSESSI NG OFFICER, WHEREBY IT WAS POINTED OUT THAT ANOTHER FLAT IN THE SAME B UILDING WAS LET OUT AT RS.3,00,000/- PER MONTH, WHICH CLEARLY DEMONSTRATED THAT THE RENTAL INCOME DECLARED BY THE ASSESSEE COULD NOT BE CONST RUED AS THE RENT ONOF WHICH THE PROPERTY COULD BE REASONABLY EXPECTE D TO BE LET OUT. IN THIS MANNER, THE ORDER OF CIT(A) WAS SOUGHT TO BE ASSAILED. I.T.A. NO. 7339& 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 5 6. ON THE OTHER HAND, LD. REPRESENTATIVE FOR THE AS SESSEE SUPPORTED THE ORDER OF CIT(A) BY POINTING OUT THAT THE DECISI ONS OF THE MUMBAI BENCH OF THE TRIBUNAL IN THE CASES OF SAHAR DEVELOP ERS(SUPRA) AND SANDEEP J. SHA(SUPRA) RELIED UPON BY CIT(A) CONTI NUE TO HOLD THE FIELD. APART THEREFROM, LD. REPRESENTATIVE FOR THE ASSESSE E ALSO REFERRED TO THE DECISION OF THE TRIBUNAL IN THE CASE ONE SHRI MANISH RANBIR MAKER VIDE ITA NO.7341/MUM/2011 & ITA NO.4405/MUM/2012 FO R ASSESSMENT YEARS 2008-09 AND 2009-10 ORDER DATED 30 /8/2013 TO POINT OUT THAT CIT(A) MADE NO MISTAKE IN UPHOLDING THE ANNUAL VALUE OF THE PROPERTY AS RETURNED BY THE ASSESSEE. LD. R EPRESENTATIVE FOR THE ASSESSEE POINTED OUT THAT IN THE CASE SHRI MANISH R ANBIR MAKER (SUPRA) ALSO, THE PROPERTY WAS LOCATED IN THE SAME BUILDIN G AS THAT OF THE ASSESSEE AND IN THAT CASE ALSO THE ASSESSING OFFICE R HAD RELIED ON THE RENT DERIVED BY MR. PUNEET R. GUPTA. IT WAS POINT ED OUT THAT THE TRIBUNAL CONSIDERED THE CIRCUMSTANCES IN WHICH MR. PUNEET R. GUPTA WAS EARNING RENT OF RS.3.00 LACS PER MONTH AND FOU ND THAT THE SAME COULD NOT BE CONSIDERED AS A RENT FOR WHICH THE P ROPERTY CAN BE REASONABLY EXPECTED TO BE LET OUT FROM YEAR TO YEAR FOR THE PURPOSES OF SECTION 23(1) OF THE ACT. 7. IN THE ABOVE BACKGROUND, WE HAVE CONSIDERED THE RIVAL SUBMISSIONS. THE PRECEDENTS WHICH HAVE BEEN REFERR ED BY CIT(A) AND ALSO THE DECISION OF THE TRIBUNAL IN THE CASE OF SH RI MANISH RANBIR MAKER (SUPRA) CLEARLY SUPPORT THE ANNUAL VALUE OF THE PROPERTY AS I.T.A. NO. 7339& 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 6 DETERMINED BY THE ASSESSEE IN HIS RETURN OF INCOME. FACTUALLY SPEAKING, IT IS QUITE CLEAR THAT THE MUNICIPAL RATA BLE VALUE OF THE PROPERTY IS LOWER THAN THE ACTUAL RENT RECEIVED BY THE ASSESSEE AND IN FACT THE ACTUAL RENT RECEIVED IS ALMOST SEVEN TIM ES THE MUNICIPAL RATABLE VALUE. THIS ASPECT OF THE MATTER, IN OUR V IEW, SIGNIFIES THAT THE ACTUAL RENT DERIVED BY THE ASSESSEE IS QUITE REASON ABLE. IT IS ALSO EVIDENT THAT IN CASE OF SHRI. MANISHI RANBIR MAKE R (SUPRA) THE ISSUE BEFORE THE TRIBUNAL RELATED TO THE DETERMINATION OF ANNUAL VALUE OF THE PROPERTY LOCATED IN THE SAME BUILDING AS THAT OF THE ASSESSEE BEFORE US. IN THE CASE OF SHRI. MANISHI RANBIR MAKER (S UPRA) THE PROPERTY WAS ADMEASURING AN AREA OF 1800 SQ.FTS. AND THE REN T DERIVED WAS RS.90,000/- PER ANNUM, WHICH COMPARES QUITE FAVO RABLY WITH THE RENTAL OF RS.1,80,000/- PER ANNUM BEING EARNED IN THE CASE OF THE INSTANT PROPERTY. THE CASE OF THE ASSESSING OFFI CER IS BASED ON A RENT OF RS.3.00 LACS PER MONTH PURPORTED TO BE EARNED BY MR. PUNEET R. GUPTA FROM A FLAT LOCATED IN THE SAME BUILDING AS T HAT OF THE ASSESSEE. THIS VERY COMPARABLE RELIED UPON BY THE ASSESSING O FFICER HAS CONSIDERED BY THE TRIBUNAL IN THE CASE OF SHRI MANI SH RANBIR MAKER (SUPRA) FOR THE ASSESSMENT YEAR 2008-09, WHICH IS A LSO THE YEAR UNDER CONSIDERATION BEFORE US. THE TRIBUNAL IN ITS ORDE R DATED 30/08/2013(SUPRA) NOTED THAT IN THE CASE OF MR. PU NEET R. GUPTA, THE PROPERTY WAS LET OUT BY WAY OF A LEAVE AND LICENCE AGREEMENT ON 11/5/2007 AND PRIOR TO THAT THE PROPERTY WAS FETCHI NG A MONTHLY RENT OF RS.10,000/- ONLY AS PER AN AGREEMENT DATED 25/2/ 2004. THE TRIBUNAL CONSIDERED THAT SUCH A RENTAL ARRANGEMENT COULD NOT BE I.T.A. NO. 7339& 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 7 COMPARED WITH OTHER RENTAL ARRANGEMENTS WHICH AR E BEING CARRIED FORWARD FROM THE PAST YEARS. IN OUR CONSIDERED OPI NION, THE PARITY OF REASONING WHICH PREVAILED WITH THE TRIBUNAL IN TH E CASE OF SHRI MANISH RANBIR MAKER (SUPRA) TO REJECT THE RELIANCE PLACED BY THE ASSESSING OFFICER ON THE RENTAL ARRANGEMENT IN THE CASE OF MR . PUNEET R. GUPTA IS CLEARLY APPLICABLE IN THE INSTANT CASE ALSO. THERE FORE, IN OUR VIEW, THE CIT(A) HAS JUSTIFIABLY IGNORED THE ACTION OF THE A SSESSING OFFICER IN RELYING ON THE RENT EARNED BY MR. PUNEET R. GUPTA. 8. IN VIEW OF THE AFORESAID DISCUSSION AND HAVING R EGARD TO THE PRECEDENTS CITED, WE FIND NO REASON TO INTERFERE WI TH THE CONCLUSION DRAWN BY CIT(A), WHICH IS HEREBY AFFIRMED. 9. IN THE RESULT, THE APPEAL OF THE REVENUE IN THE CASE OF SHRI AMBRISH RANBIR MAKER, IN ITA NO.7340/M/2011 IS HER EBY DISMISSED. 10. FACTS AND CIRCUMSTANCES IN THE CASE OF SHRI RANBIR APAR MAKER IN ITA NO.7339/MUM/2011 STAND ON IDENTICAL FOOTING AS IN THE CASE OF SHRI AMBRISH RANBIR MAKER (SUPRA), THEREFORE, O UR DECISION IN THE CASE OF SHRI AMBRISH RANBIR MAKER (SUPRA) SHALL APPLY MUTATIS MUTANDIS IN THE OTHER APPEAL ALSO. I.T.A. NO. 7339& 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 8 11. RESULTANTLY, THE CAPTIONED APPEALS OF THE REVEN UE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 19 TH AUGUST, 2015. SD/- SD/- (SANJAY GARG) (G.S. PANNU ) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI,DATED [ VM COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A)- 21, MUMBAI 4. CIT- 10, MUMBAI 5. DR, ITAT, MUMBAI A BENCH 6. GUARD FILE. BY ORDER, //TRUE COPY// (DY./ASSTT. REGISTRAR) ITAT, MUMBAI I.T.A. NO. 7339& 7340 /MUM/2011 ASSESSMENT YEAR : 2008-09 9 DRAFT DICTATED ON 14/8/2015 SR PS 2 DRAFT PLACED BEFORE AUTHOR ON 17/08/2015 SR PS 3 DRAFT PROPOSED & PLACE BEFORE THE 2 ND MEMBER JM/AM 4 DRAFT DISCUSSED/APPROVED BY 2 ND MEMBER JM/AM 5 APPROVED DRAFT COMES TO THE SR PS SR.PS 6 KEPT FOR PRONOUNCEMENT ON SR PS 7 FILE SENT TO THE BENCH CLERK SR PS 8 DATE ON WHICH FILE GOES TO THE HEAD CLERK 9 DATE ON WHICH FILE GOES TO THE AR 10 DATE OF DISPATCH SR PS