PREETI G MEHTA, MUMBAI V. ITO WD 11(3)(2), MUMBAI

ITA 7557/MUM/2014

• Counselvise Citation: [2016] 133 COUNSELVISE.COM (IT) 3644 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 2 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-03-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Next Hearing Date: 02-09-2015
• Assessment Year: 2004-2005
• Appeal Filed On: 18-12-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: VISHWAS JADHAVDR
• Keywords: Reopening of assessment; Rule of consistency

Judgement Text

, - , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES SMC, MUMBAI , ! ' , BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, ITA NO.7557/MUM/2014 ASSESSMENT YEAR: 2004-05 MRS. PREETI G MEHTA, 22, BENNETT VILLA, 27, WODE HOUSE, COLABA, MUMBAI-400001 / VS. INCOME TAX OFFICER, WARD-11(3)(2), AAYKAR BHAVAN, M.K.ROAD, CHURCHGATE, MUMBAI-400020 / ASSESSEE / REVENUE P.A. NO . ADRPM3856E $ / ASSESSEE BY SHRI NITESH JOSHI $ / REVENUE BY SHRI VISHWAS JADHAV-DR / DATE OF HEARING 09/03/2016 / DATE OF ORDER: 11/03/2016 / O R D E R THE ASSESSEE IS AGGRIEVED BY THE IMPUGNED ORDER DATED 23/08/2013 OF THE LD. FIRST APPELLATE AUTHORI TY, MUMBAI. THE FIRST GROUND RAISED BY THE ASSESSEE IS WITH ITA NO.7557/MUM/2014 MRS. PREETI G MEHTA 2 RESPECT TO CHALLENGING THE REOPENING OF ASSESSMENT U/S 147/148 OF THE ACT WITHOUT APPRECIATING THE FACT TH AT THERE WAS NO ESCAPEMENT OF INCOME. DURING HEARING, THE LD. COUNSEL FOR THE ASSESSEE, SHRI NITESH JOSHI, DI D NOT PRESS THIS GROUND, THEREFORE, IT IS DISMISSED AS NO T PRESSED. 2. THE NEXT GROUND PERTAINS TO DETERMINING THE ANNUAL LETTING VALUE (ALV) OF THE PROPERTY AT RS.6,72,526/- AS AGAINST RS.65,736/- DETERMINED BY THE ASSESSEE. IT WAS EXPLAINED BY THE LD. COUNSEL FOR THE ASSESSEE THAT THE ASSESSEE IS HAVING TWO PROPERTIES OUT OF WHICH ONE IS SELF OCCUPIED AND THE REMAINING ONE WA S LYING VACANT AND WAS NEVER RENTED OUT. THE VACANT PROPERTY WAS KEPT BY THE ASSESSEE FOR ITS NEAR FUTU RE USE, THEREFORE, IN THE ABSENCE OF RENTING OUT EITHER THE ASSESSEE STANDARD RENT OR THE MUNICIPAL VALUATION H AS TO BE CONSIDERED. ON THE OTHER HAND, THE LD. DR, SHRI VISHWAS JADHAV, STRONGLY DEFENDED THE IMPUGNED ORDE R. 2.1. I HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE FACTS , IN BRIEF, ARE THAT THE ASSESSEE DECLARED TOTAL INCOME OF RS.5,90,349/- IN HER RETURN FILED ON 01/11/2004. DU RING THE YEAR UNDER CONSIDERATION, THE ASSESSEE WAS THE OWNER OF THE TWO RESIDENTIAL PROPERTIES, ONE AT COLABA (J OINTLY OWNED BY THE ASSESSEE AND HER HUSBAND) AND THE REMAINING WAS SITUATED AT BANDRA. THE ASSESSEE SHO WED ITA NO.7557/MUM/2014 MRS. PREETI G MEHTA 3 BOTH THE PROPERTIES AS SELF OCCUPIED. AS PER THE RE VENUE, THE ASSESSEE EXERCISED OPTION U/S 23(4) TO TREAT TH E ALV OF THE BANDRA PROPERTY AS NIL AND OFFERED DEEMED AL V OF COLABA PROPERTY AT RS.65,736/- AS INCOME FROM HOUSE PROPERTY. THE CASE OF THE ASSESSEE WAS REOPENED U/S 147/148 OF THE ACT. THE ASSESSEE CHALLENGED THE VALUATION OF THE PROPERTY ADOPTED BY THE ASSESSING OFFICER AT 7.5% OF THE COST OF THE PROPERTY. NOW Q UESTION ARISES, WHEN THE PROPERTY IN QUESTION WAS RENTED OU T WHETHER THE STANDARD RENT OR THE MUNICIPAL VALUATIO N IS THE RIGHT METHOD OF VALUATION? THE OBVIOUS REPLY IS YES, BECAUSE AS OOZES OUT FROM THE FACTS THAT THE PROPER TY IN QUESTION WAS NEVER LET OUT BY THE ASSESSEE AND WAS LYING VACANT FOR THE FUTURE USE OF THE FAMILY. THE VALUA TION OF THE PROPERTY AT 7.5% OF THE COST OF THE PROPERTY IN ANYWAY NOT JUSTIFIED MORE SO THE LD. ASSESSING OFFICER NEI THER CITED ANY RENT OF A FLAT SITUATED IN THE SAME SOCIETY/ADJOINING SOCIETY NOR ASSIGNED ANY REASON F OR ADOPTION AT 7.5% OF THE COST OF THE PROPERTY. NO REASON/METHODOLOGY HAS BEEN ASSIGNED IN THE ASSESSMENT ORDER FOR SUCH ADOPTION. IN THE ABSENCE OF ASCERTAINMENT OF ALV, IN MY VIEW, STANDARD METHOD O R THE MUNICIPAL VALUATION IS THE RIGHT APPROACH BECAU SE EVEN AS PER SECTION 23, WHICH IS A DEEMING PROVISIO N, THE PROPERTY WHICH CAN NORMALLY FETCH THE RENT OR THE AMOUNT ON WHICH IDENTICAL PROPERTY MAY BE RENTED OU T, IS TO BE CONSIDERED. DURING HEARING, THE LD. COUNSEL FOR THE ITA NO.7557/MUM/2014 MRS. PREETI G MEHTA 4 ASSESSEE CONTENDED THAT FOR A.Y. 2005-06 ONWARDS, T HE ANNUAL LETTING VALUE WAS ACCEPTED BY THE DEPARTMENT AND FOR A.Y. 2009-10, THE ORDER WAS PASSED U/S 143( 3) ACCEPTING THE ANNUAL LETTING VALUE. THE ONLY DISPUT E IS ONLY WITH RESPECT TO PRESENT ASSESSMENT YEAR I.E. 2 004- 05. IN SUCH A SITUATION, I AM OF THE VIEW THAT IF THE DEPARTMENT HAD BEEN ACCEPTING THE ANNUAL LETTING VA LUE FROM A.Y. 2005-06 AND TILL 2009-10 (ORDER U/S 143(3 )) THEN ON THE PRINCIPLE OF CONSISTENCY, THE ALV, DECL ARED BY THE ASSESSEE, HAS TO BE ACCEPTED. EVEN OTHERWISE, THE JUDICIAL PRINCIPLE SAYS THAT CONSISTENCY HAS TO BE MAINTAINED. OUR VIEW FIND SUPPORTS FROM THE RATIO L AID DOWN IN FOLLOWING DECISIONS:- I. PARSHURAM POTTERY WORKS LTD. VS ITO 106 ITR 1 (SC) II. SECURITY PRINTERS 264 ITR 276(DEL.) III. CIT VS NEO POLYPACK PVT. LTD. 245 ITR 492 (DEL.) IV. CWT VS ALLIED FINANCE PVT. LTD. 289 ITR 318 (DEL.) V. BERGER PAINTS INDIA LTD. VS CIT 266 ITR 99 (SC) VI. DCIT VS UNITED VANASPATI (275 ITR 124) (AT)(CHANDIGARH ITAT) VII. UNION OF INDIA VS KUMUDINI N. DALAL 249 ITR 219 (SC) VIII. UNION OF INDIA VS SATISH PANNALAL SHAH 249 ITR 221 IX. B.F.VARGHESE VS STATE OF KERALA 72 ITR 726 (KER.) X. CIT VS NARENDRA DOSHI 254 ITR 606 (SC) ITA NO.7557/MUM/2014 MRS. PREETI G MEHTA 5 XI. CIT VS SHIVSAGAR ESTATE 257 ITR 59 (SC) XII. PRADIP RAMANLAL SETH VS UOI 204 ITR 866 (GUJ.) XIII. RADHASWAMY SATSANG VS CIT 193 ITR 321 (SC) XIV. AGGARWAL WAREHOUSING & LEASING LTD. 257 ITR 235 (MP) THE SUM AND SUBSTANCE OF THE AFORESAID JUDICIAL PRONOUNCEMENTS IS THAT ON THE BASIS OF PRINCIPLE OF JUDICIAL DISCIPLINE, CONSISTENCY HAS TO BE FOLLOWED AND ONCE IN A PARTICULAR YEAR, IF ANY VIEW IS TAKEN, IN THE ABSENCE OF ANY CONTRARY MATERIAL, NO CONTRARY VIEW IS TO BE TAKEN AS FINALITY TO THE LITIGATION IS ALSO A PR INCIPLE WHICH HAS TO BE FOLLOWED. BEFORE US, NO CONTRARY FA CTS OR ANY ADVERSE MATERIAL WAS BROUGHT ON RECORD BY THE REVENUE, THEREFORE, WE FIND MERIT IN THE ARGUMENT O F THE LD. COUNSEL FOR THE ASSESSEE AND THEREFORE, THIS GR OUND DESERVES TO BE ALLOWED. IT IS ALSO OBSERVED THAT IF FOR A.Y. 2009-10, A PARTICULAR ALV IS ACCEPTED BY THE DEPARTMENT, THE ALV FOR A.Y. 2004-05 MAY NOT BE MOR E THAN THE A.Y. 2009-10. SAFELY, IT CAN BE CONCLUDED THAT THE ALV FOR A.Y. 2005-06, ACCEPTED BY THE DEPARTMEN T (WHICH IS NEARER TO A.Y. 2004-05) CAN AT BEST BE AD OPTED, MORE SPECIFICALLY WHEN, THE DEPARTMENT HAS NOT BROU GHT OUT ANY EVIDENCE ON RECORD THAT THE PROPERTY OF THE ASSESSEE COULD FETCH MORE RENT THEN THE DECLARED ON E. THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. FINALLY, THE APPEAL OF THE ASSESSEE IS PARTLY ALLOW ED. ITA NO.7557/MUM/2014 MRS. PREETI G MEHTA 6 THIS ORDER WAS PRONOUNCED IN THE OPEN IN THE PRESENCE OF LD. REPRESENTATIVE FROM BOTH SIDES AT T HE CONCLUSION OF THE HEARING ON 09/03/2016. SD/- (JOGINDER SINGH) ! ' / JUDICIAL MEMBER MUMBAI; DATED : 11/03/2016 F{X~{T? P.S / ! $ )!*+ ,+-* / COPY OF THE ORDER FORWARDED TO : 1. '#$%& / THE APPELLANT 2. '(%& / THE RESPONDENT. 3. ) ) * ( '#$ ) / THE CIT, MUMBAI. 4. ) ) * / CIT(A)- , MUMBAI 5. -./ ' , ) '#$ ' 1 , / DR, ITAT, MUMBAI 6. /2 3$ / GUARD FILE. / BY ORDER, (-# ' //TRUE COPY// / (DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI