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

ITA 7341/MUM/2011

• Counselvise Citation: 734119914 RSA 2011
• Duration Of Justice: 1 year(s) 9 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-08-2013
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 11-03-2013
• Assessment Year: 2008-2009
• Appeal Filed On: 02-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PITAMBAR DAS
• Assessee Lawyers: PRAKASH K JOTWANI

Judgement Text

, , , , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES B, MUMBAI .. , ! ' , # !, $ BEFORE SHRI R.S.SYAL, AM AND SHRI VIVEK VARMA, JM ITA NO.7341/MUM/2011 : ASST.YEAR 2008-2009 ITA NO.4405/MUM/2012 : ASST.YEAR 2009-2010 THE DY.COMMISSIONER OF INCOME-TAX CENTRAL CIRCLE 38 MUMBAI. SHRI MANISH RANBIR MAKER MAKER TOWER F 1 ST FLOOR CUFFE PARADE, MUMBAI 400 005. PAN : AABPM7898R. ( %& / // / APPELLANT) ( ( ( ( / VS. ( )*%&/ RESPONDENT) %& + ++ + , , , , / APPELLANT BY : SHRI PITAMBAR DAS )*%& + , + , + , + , / RESPONDENT BY : SHRI PRAKASH K.JOTWANI ( + - / / / / DATE OF HEARING : 28.08.2013 ./0 + - / DATE OF PRONOUNCEMENT : 30.08.2013 !1 !1 !1 !1 / / / / O R D E R PER R.S.SYAL (AM) : THESE TWO APPEALS BY THE REVENUE RELATE TO THE ASSE SSMENT YEARS 2008-2009 AND 2009-2010. SINCE BOTH THE APPEA LS ARE BASED ON IDENTICAL FACTS AND COMMON GROUNDS OF APPEAL, WE AR E, THEREFORE, PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. ITA NO.7341/MUM/2011 : ASST.YEAR 2008-2009 2. THE ASSESSEE DISCLOSED INCOME FROM HOUSE PROPERT Y AT ` 63,000 IN RESPECT OF FLAT NO.12 MAKER TOWER, CUFFE PARADE, MUMBAI WITH AN AREA OF 1800 SQ.FT. RENT WAS RECEIVED AT THE RATE O F ` 7,500 PER MONTH. ITA NOS.7341/MUM/2011 & ITA NO.4405/MUM/2012. SHRI MANISH RANBIR MAKER. 2 THE ASSESSING OFFICER, ON THE PERUSAL OF THE CASE F ILE OF ONE SHRI PUNEET R.GUPTA, ANOTHER ASSESSEE IN THE SAME CHARGE , OBSERVED THAT ANOTHER FLAT WAS LET OUT BY HIM IN THE SAME PREMISE S AT ` 3,00,000 PER MONTH. HIS FLAT ADMEASURED 1700 SQ.FT. PROPORTIONAT ELY INCREASING THE RENTAL INCOME WITH REFERENCE TO THE AREA OF 1800 SQ . FEET, THE AO ESTIMATED MONTHLY RENTAL INCOME AT ` 3,17,000. THIS RESULTED INTO AN ADDITION OF ` 25,99,800. THE LEARNED CIT(A) RELIED ON CERTAIN ORD ERS PASSED BY THE TRIBUNAL FOR HOLDING THAT THE ALV WA S TO BE DETERMINED ON THE BASIS OF MUNICIPAL VALUE AND NOT SOME ESTIMATED RENT. AS THE AMOUNT OF RENT RECEIVED BY THE ASSESSE E WAS MORE THAN MUNICIPAL VALUE, HE DELETED THE INSTANT ADDITION. T HE REVENUE IS IN APPEAL AGAINST THE DELETION OF ADDITION. 3. AFTER CONSIDERING THE RIVAL SUBMISSIONS AND PERU SING THE RELEVANT MATERIAL ON RECORD, IT IS NOTICED THAT SIM ILAR ISSUE CAME UP BEFORE THE TRIBUNAL IN THE CASE OF ESTATE OF LATE SADAJIWATLAL CHANDULAL (INDL.) V. ITO. VIDE ORDER DATED 09.04.2013 IN ITA NO.1568/MUM/2012, THE TRIBUNAL HAS HELD THAT THE MU NICIPAL RATABLE VALUE REPRESENTS FAIR RENTAL VALUE AND THE SAME NEE DS TO BE ADOPTED FOR DETERMINING THE ANNUAL LETTING VALUE U/S 23 OF THE ACT. A COPY OF THIS ORDER HAS BEEN PLACED ON RECORD. APART FROM TH AT, THE LEARNED CIT(A) HAS ALSO RELIED ON CERTAIN ORDERS PASSED BY THE MUMBAI BENCHES OF THE TRIBUNAL IN SUPPORT OF HIS VIEW POIN T. THE REFERENCE IN THIS REGARD HAS BEEN MADE IN THE IMPUGNED ORDER TO THE ORDERS PASSED BY THE MUMBAI BENCH IN THE CASE OF ITO V. SAHAR DEVELOPERS [ITA NO.3164/MUM/2009 DATED 28.01.2011] AND ACIT V. SANDEEP ITA NOS.7341/MUM/2011 & ITA NO.4405/MUM/2012. SHRI MANISH RANBIR MAKER. 3 J.SHAH [ITA NO.1382/MUM/2008 DATED 27.04.2011] . IN THESE CASES IT HAS BEEN HELD THAT IF THE ACTUAL RENT RECEIVED IS M ORE THAN MUNICIPAL VALUE THEN THE ACTUAL RENT RECEIVED SHOULD BE ADOPT ED AS ANNUAL VALUE OF THE PROPERTY. ADVERTING TO THE FACTS OF THE INST ANT CASE, IT IS OBSERVED THAT THE ASSESSEE RECEIVED ACTUAL RENT AT ` 96,000 PER ANNUM AS AGAINST MUNICIPAL VALUE OF ` 14,484. THE AMOUNT OF ACTUAL RENT IS OBVIOUSLY HIGHER THAN THE MUNICIPAL VALUE AND RESUL TANTLY THE FORMER NEEDS TO BE CONSIDERED FOR THIS PURPOSE. 4. THE RELIANCE OF THE LEARNED DEPARTMENTAL R EPRESENTATIVE ON THE JUDGMENT OF THE HONBLE DELHI HIGH COURT IN THE CAS E OF CIT V. MONI KUMAR SUBBA [(2011) 333 ITR 38 (DEL.)] IS MISCONCEIVED. THE LEARNED DEPARTMENTAL REPRESENTATIVE RELIED ON THE P ORTION OF THE JUDGMENT LAYING DOWN THAT THE RATABLE VALUE, IF COR RECTLY DETERMINED UNDER THE MUNICIPAL LAWS, CAN BE TAKEN AS ALV U/S 2 3(1)(A). IF HOWEVER THE ASSESSING OFFICER CAN SHOW THAT RATABLE VALUE UNDER MUNICIPAL LAWS DOES NOT REPRESENT THE CORRECT RENT THEN THE RATABLE VALUE IS NOT BINDING ON THE ALV. WE ARE UNABLE TO F IND APPLICATION OF THIS JUDGMENT TO THE FACTS OF THE INSTANT CASE. THE ASSESSING OFFICER HAS NOWHERE DEMONSTRATED THAT THE RATABLE VALUE UND ER MUNICIPAL LAWS ETC. REPRESENT THE INCORRECT FAIR RENT. ON THE CONTRARY, IT IS RELEVANT TO NOTE THAT THE ASSESSING OFFICER HAS REL IED ON THE CASE OF SHRI PUNEET R.GUPTA FOR ADOPTING MONTHLY RENT OF ` 3,17,000, WHO LET OUT HIS PROPERTY AT A MONTHLY RENT OF ` 3 LAKH ONLY BY WAY OF AGREEMENT OF LEAVE AND LICENCE ON 11 TH MAY, 2007. PRIOR TO THAT THE ITA NOS.7341/MUM/2011 & ITA NO.4405/MUM/2012. SHRI MANISH RANBIR MAKER. 4 PROPERTY WAS LET OUT BY HIM ON 25.02.2004 ON A MONT HLY RENT OF ` 10,000. A COPY OF BOTH THE AGREEMENTS DATED 25.02.2 004 AND 11.05.2007 HAVE BEEN PLACED ON RECORD. IT IS ON THE BASIS OF THIS RENT MONTHLY OF ` 10,000 THAT HE FILED HIS RETURNS WHICH CAME TO BE ACCEPTED AS SUCH. A COPY OF THE ASSESSMENT ORDER PA SSED IN THE CASE OF SHRI PUNEET R.GUPTA FOR ASSESSMENT YEAR 2005-200 6 HAS BEEN PLACED ON RECORD IN WHICH INCOME FROM HOUSE PROPERT Y HAS BEEN REFLECTED AT ` 84,000. SIMILAR ORDER FOR ASSESSMENT YEAR 2006-2007 IN THE CASE OF SHRI PUNEET R.GUPTA HAS ALSO BEEN PLACE D ON RECORD DISCLOSING INCOME FROM HOUSE PROPERTY AT ` 84,000 WHICH STOOD ACCEPTED AS SUCH. THE CASE OF THE LEARNED AR IS THA T THE ASSESSEE GAVE ITS PROPERTY ON RENT IN THE YEAR 1992 AND IT WAS A T THE SAME RATE OF RENT THAT THE PROPERTY CONTINUED TO BE LET OUT. WH EN WE CONSIDER THE FACTS IN TOTALITY, BEING THE ASSESSEE EARNING RENT OF ` 7,500 PER MONTH SINCE 1992 AND SHRI PUNEET R.GUPTA EARNING RENT FRO M SIMILAR PROPERTY AT ` 10,000 PER MONTH FROM CALENDAR YEAR 2004, THERE HAR DLY REMAINS ANY DISPUTE ABOUT THE CORRECTNESS OF THE VA LUE DECLARED BY THE ASSESSEE. RESPECTFULLY FOLLOWING THE ABOVE PRECEDEN TS GIVEN BY THE MUMBAI BENCHES OF THE TRIBUNAL, WE UPHOLD THE IMPUG NED ORDER. ITA NO.4405/MUM/2012 : ASST.YEAR 2009-2010 5. BOTH THE SIDES ARE IN AGREEMENT THAT THE FACTS A ND CIRCUMSTANCES FOR THIS YEAR ARE MUTATIS MUTANDIS SIMILAR TO THOSE OF THE ASSESSMENT YEAR 2008-2009. FOLLOWING THE VIEW TAKEN HEREINABO VE, WE UPHOLD THE IMPUGNED ORDER. ITA NOS.7341/MUM/2011 & ITA NO.4405/MUM/2012. SHRI MANISH RANBIR MAKER. 5 6. 2 -3 4 + 5 24 + 4- 67 IN THE RESULT, BOTH THE APPEALS BY THE REVENUE ARE DISMISSED. ORDER PRONOUNCED ON THIS 30 TH DAY OF AUGUST, 2013. !1 + ./0 8!(3 / + 9 SD/- SD/- (VIVEK VARMA) (R.S.SYAL) # ! # ! # ! # ! / JUDICIAL MEMBER ! ! ! ! / ACCOUNTANT MEMBER MUMBAI ; 8!( DATED : 30 TH AUGUST, 2013. DEVDAS* !1 + )#-:' ;'0- !1 + )#-:' ;'0- !1 + )#-:' ;'0- !1 + )#-:' ;'0-/ COPY OF THE ORDER FORWARDED TO : 1. %& / THE APPELLANT 2. )*%& / THE RESPONDENT. 3. < () / THE CIT, MUMBAI. 4. < / CIT(A) -41, MUMBAI. 5. '?9 )#-#( , , / DR, ITAT, MUMBAI 6. 9@ A / GUARD FILE. !1( !1( !1( !1( / BY ORDER, *'- )#- //TRUE COPY// B B B B/ // /6 4 6 4 6 4 6 4 ( DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI