ATUL A. SHAH, MUMBAI V. ITO WD 16(2)(1), MUMBAI

ITA 7636/MUM/2010

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 78701 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 5 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-04-2014
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 19-03-2014
• Assessment Year: 2006-2007
• Appeal Filed On: 04-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL

Judgement Text

A IN THE INCOME TAX APPELLATE TRIBUNAL A BENCH, MUMBAI .. , . . . . BEFORE SHRI P.M. JAGTAP, AM AND DR. S.T.M. PAVALAN, JM ./ I.T.A. NO.7636/ MUM/2010 ( / ASSESSMENT YEAR : 2006-2007 SHRI ATUL A. SHAH, 194-A, SHANTI NAGAR, NEPEAN SEA ROAD, MUMBAI 400 006. / VS. INCOME TAX OFFICER WARD 16(2)(1), MATRU MANDIR, TARDEO ROAD, MUMBAI. ./ PAN :AADPS9295G ( % / APPELLANT ) .. ( &'% / RESPONDENT ) A PPELLANT BY NONE R E SPONDENT BY : SHRI MANVENDRA GOYAL * / DATE OF HEARING : 19-03-2014 * / DATE OF PRONOUNCEMENT :16-04-2014 [ / O R D E R PER P.M. JAGTAP, A.M . : .. , THIS APPEAL FILED BY THE ASSESSEE IS DIRECTED AGAIN ST THE ORDER OF LD. CIT(A) 27, MUMBAI DATED 24-8-2010 AND THE SOLITARY ISSUE ARISING OUT OF THE SAME RELATES TO THE ADDITION OF RS. 3,01,307/- MADE BY THE A.O. AND CONFIRMED BY THE LD. CIT(A) ON ACCOUNT OF HOUSE PRO PERTY INCOME. 2. THE ASSESSEE IN THE PRESENT CASE IS AN INDIVIDUA L WHO FILED HIS RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION ON 6-11-200 6 DECLARING TOTAL INCOME OF RS. 1,14,259/-. FROM THE BALANCE SHEET FILED AL ONG WITH THE SAID RETURN, IT WAS NOTICED BY THE A.O. THAT THE ASSESSEE IS THE OW NER OF THE FOLLOWING PROPERTIES:- ITA 7636/M/10 2 SR. NO. NAME OF THE PROPERTY VALUE (RS) 1 OWNERSHIP FLAT NO. 191A, 192A, SHANTI NAGAR, NEPEANSEA RD. MUMBAI 8333000 2 OWNERSHIP FLAT NO. 194A, SHANTI NAGAR, NEPEANSEA RD. MUMBAI 33825 3 OWNERSHIP FLAT AT NAVSARI 158357 4 OWNERSHIP FLAT AT PANCHGANI 259475 5 OWNERSHIP BUNGLOW AT LONAVALA 664750 3. SINCE NO INCOME UNDER THE HEAD INCOME FROM HOUS E PROPERTY WAS OFFERED BY THE ASSESSEE IN HIS RETURN OF INCOME, TH E A.O. REQUIRED THE ASSESSEE TO OFFER HIS EXPLANATION IN THE MATTER. IN REPLY, I T WAS SUBMITTED BY THE ASSESSEE THAT THE HOUSE PROPERTY AT SHANTI NAGAR CO MPRISING OF FOUR RESIDENTIAL FLATS IS BEING USED FOR OWN RESIDENCE. IT WAS SUBMITTED THAT THE ASSESSEE ALONG WITH HIS TWO BROTHERS IS A CO-OWNER OF FLAT NO. 191-A, 192-A AND 194-A WHILE THE FOURTH FLAT NO. 193-A IS IN THE NAME OF HIS MOTHER. IT WAS STATED THAT ALL THESE FOUR FLATS ARE BEING USED BY THE ASSESSEE AND HIS FAMILY AS ONE RESIDENTIAL UNIT AND CONSIDERING THE SAME AS SELF OCCUPIED PROPERTY, NO INCOME FROM THE SAID PROPERTY WAS CHAR GEABLE TO TAX IN THE HANDS OF THE ASSESSEE. ON ENQUIRY MADE DIRECTLY FRO M THE SHANTI NAGAR COOPERATIVE HSG. SOC., THE A.O., HOWEVER, FOUND THA T THE SOCIETY BILLS WERE BEING ISSUED SEPARATELY FOR EACH OF THE FOUR FLATS. IT WAS ALSO FOUND THAT THE ADDRESS OF THE ASSESSEE WAS INVARIABLY GIVEN AS FLA T NO. 194-A, NAV SHANTI NAGAR, NEPEAN SEA ROAD, MUMBAI. THE A.O. THEREFORE HELD THAT ALL THE FOUR FLATS IN SHANTI NAGAR WERE SEPARATE AND THEY WERE N OT BEING USED AS SINGLE UNIT AS CLAIMED BY THE ASSESSEE. ACCORDINGLY, FLAT NO. 194-A ALONE WAS TREATED BY THE A.O. AS THE SELF OCCUPIED PROPERTY O F THE ASSESSEE AND SINCE FLAT NO. 193-A WAS IN THE NAME OF HIS MOTHER OF THE ASSESSEE, HOUSE PROPERTY INCOME IN RESPECT OF THE REMAINING TWO FLATS I.E. F LAT NO. 191-A AND 192-A WAS BROUGHT TO TAX BY THE A.O. IN THE HANDS OF THE ASSE SSEE TO THE EXTENT OF 1/3 RD BEING HIS SHARE OF THE PROPERTY IN THE SAID FLAT. AS THE VALUE OF THE 1/3 RD SHARE OF THE SAID TWO FLATS AS DISCLOSED BY THE ASS ESSEE HIMSELF WAS RS. ITA 7636/M/10 3 83,33,000/-, THE ALV OF THE SAID PROPERTY WAS WORKE D OUT BY THE A.O. @ 6% I.E. RS. 4,99,980/- AND KEEPING IN VIEW THAT THE SA ID FLATS WERE ACQUIRED IN JULY, 2005, PROPORTIONATE ALV FOR THE PERIOD JULY, 2005 TO 31 ST MARCH, 2006 WAS ARRIVED AT BY THE A.O. AT RS. 3,74,985/-. AS R EGARDS THE ASSESSEES PROPERTY AT NAVSARI, THE A.O. ACCEPTED THE STAND OF THE ASSESSEE THAT IT WAS BEING USED FOR THE PURPOSE OF BUSINESS OF M/S ATUL BROTHERS, WHEREIN HE WAS A PARTNER AND THEREFORE ANY INCOME FROM THE SAID PR OPERTY WAS NOT CHARGEABLE TO TAX IN THE HANDS OF THE ASSESSEE. AS REGARDS THE OTHER PROPERTY I.E. FLAT AT PANCHGANI AND BUNGLOW AT LONAWALA, THE A.O. WORKED OUT THE ALV OF THE SAME @ 6% OF THE VALUE OF THE PROPERTY SHOWN BY THE ASSESSEE AND DETERMINED THE ALV OF THE SAID PROPERTY AT RS. 15,5 69/- AND RS. 39,885/- RESPECTIVELY. ACCORDINGLY, THE ALV OF THREE PROPERT IES OWNED BY THE ASSESSEE WAS WORKED OUT BY HIM AT RS. 4,30,439/- AND AFTER A LLOWING THE STANDARD DEDUCTION @ 30%, ADDITION OF RS. 3,01,307/- WAS MAD E HIM TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF HOUSE PROPERTY INCOME. ON APPEAL, THE LD. CIT(A) CONFIRMED THESE ADDITIONS MADE BY THE A. O. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE ASSESSEE HAS PREFERRED THIS APPEAL BEFORE THE TRIBUNAL. 4. AT THE TIME OF HEARING BEFORE US FIXED ON 19-3-2 014, NONE APPEARED ON BEHALF OF THE ASSESSEE INSPITE OF THE FACT THAT NOT ICE OF THE SAID HEARING SENT TO THE ASSESSEE BY RPAD IS DULY SERVED, A PROOF OF WHI CH IS AVAILABLE ON RECORD. THIS APPEAL OF THE ASSESSEE IS THEREFORE BEING DISP OSED OF EX PARTE ON MERIT AFTER CONSIDERING THE SUBMISSIONS MADE BY THE LD. D .R. AND PERUSING THE MATERIAL AVAILABLE ON RECORD. 5. IT IS OBSERVED THAT THE ADDITION OF RS. 3,01,307 /- MADE TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF HOUSE PROPERTY INCOME HAS BEEN CONFIRMED BY THE LD. CIT(A) FOR THE FOLLOWING REASO NS GIVEN IN PARA 5 OF HIS IMPUGNED ORDER:- ITA 7636/M/10 4 5. I HAVE CAREFULLY CONSIDERED THE SUBMISSIONS MAD E BY THE A.R. AND FACTS BROUGHT ON RECORD BY THE AC. IT IS A FACT THAT THE IMPUGNED PROPERTY IS LOCATED IN THE 19 TH FLOOR OF THE BUILDING, WHICH IS A HIGH RISE PROPERTY. APPARENTLY, ALL THE FOUR FLATS ARE DISTIN CTLY CONSTRUCTED AS PER PLANS SANCTIONED BY THE MUNCIPAL CORPORATION AT THE TIME OF CONSTRUCTION. THE PROPERTY BEING A HIGH RISE BUILDI NG WILL HAVE CERTAIN COMMON AREAS IN EACH OF THE FLOORS, VIZ., LIFT AREA S, STAIR CASES, PASSAGE AREAS ADJOINING THE LIFTS ELECTRICAL/TELEPHONE/FIREFIGHTING/WATER/SEWERAGE /E VACUATION PASSAGES IN CASE OF A FIRE ACCIDENT ETC. AS SUCH, AS PER THE BUILDING PLAN, ALL THE FOUR APARTMENTS ARE DIFFERENT UNITS AND THERE IS NO UNITY OF STRUCTURE AS CLAIMED BY THE APPELLANT. COMING TO THE LEGAL OWNER SHIP OF THE FLATS, FLAT NO. 191A, 192A AND 194A, EACH OF THEM ARE OWNE D JOINTLY BY THREE BROTHERS WITH 1I3 SHARE EACH. FLAT NO. 193A IS OWNE D BY THE APPELLANTS MOTHER. THE APPELLANTS A.R. CLARIFIED THAT THE SEP ARATE LEGAL OWNERSHIPS OF THESE FLATS AS ABOVE CONTINUED TO BE THE SAME SINCE THE TIME OF PURCHASE AND NO CHANGE HAS BEEN EFFECTED TH EREAFTER. THE PROPERTY DOES NOT BELONG TO HUF, EVEN THOUGH THE FA MILIES OF THE THREE BROTHERS ALONGWITH THE MOTHER ARE STAYING TOGETHER IN THESE FLATS. THE PROPERTY WAS NEVER THROWN INTO THE HOTCH POTCH OF T HE JOINT FAMILY AT ANY TIME SUBSEQUENT TO THE DATE OF PURCHASE. IT IS ALSO A FACT THAT AS PER THE HOUSING SOCIETYS RECORDS EACH FLAT IS A DI STINCT PROPERTY AND THEY WERE NEVER TREATED AS A SINGLE UNIT. THE SOCIE TY BILLS ARE BEING ISSUED SEPARATELY FOR EACH OF THESE FLATS AND RELEV ANT DETAILS ARE BROUGHT OUT IN THE ASSESSMENT ORDER. APPARENTLY, IT IS ONLY FOR THE SAKE OF CONVENIENCE THAT CERTAIN PORTIONS OF THESE FLATS ARE USED AS A COMMON KITCHEN/COMMON LIVING ROOM(S) AND IT IS NOT BY DESIGN OR APPROVED PLAN THAT THE PROPERTY IS CONSTRUCTED HAVI NG UNITY OF STRUCTURE. 6. AS IS CLEARLY EVIDENT FROM THE IMPUGNED ORDER OF THE LD. CIT(A), ALL THE FOUR FLATS IN SHANTI NAGAR CHS WERE FOUND TO BE DIF FERENT AND SEPARATE UNITS BY HIM AFTER PERUSING THE BUILDING PLAN SANCTIONED BY THE MUNICIPAL CORPORATION AS WELL AS THE RECORD MAINTAINED BY THE SOCIETY. HE ALSO FOUND THAT THERE WAS NO UNITY OF STRUCTURE AS CLAIMED BY THE ASSESSEE AND THE THREE FLATS BEARING NO. 191-A, 192-A AND 194-A WERE JOINT LY OWNED BY THREE BROTHERS WITH 1/3 RD SHARE EACH. KEEPING IN VIEW THESE FINDINGS OF FAC T RECORDED BY THE LD. CIT(A), WHICH HAVE BEEN REMAINE D UN-DISPUTED BY US, WE ARE OF THE VIEW THAT THE ADDITION OF RS. 3,01,307/- MADE BY THE A.O. TO THE TOTAL INCOME OF THE ASSESSEE ON ACCOUNT OF HOUSE PR OPERTY INCOME WAS IN ACCORDANCE WITH LAW AND THE LD. CIT(A) WAS FULLY JU STIFIED IN CONFIRMING THE ITA 7636/M/10 5 SAME. THE IMPUGNED ORDER OF THE LD. CIT(A) ON THIS ISSUE IS THEREFORE UPHELD AND THIS APPEAL OF THE ASSESSEE IS DISMISSED. 7. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 16 TH APRIL, 2014. . * 0 1 16-04-2014 * SD/- SD/- (DR. S.T.M. PAVALAN) (P.M. JAGTAP ) JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI ; 1 DATED 16604614 [ .../ RK , SR. PS ' #%& '& / COPY OF THE ORDER FORWARDED TO : 1. % / THE APPELLANT 2. &'% / THE RESPONDENT. 3. 9 () / THE CIT(A)27 MUMBAI. 4. 9 / CIT -CITY XVI, MUMBAI 5. < &> , > , / DR, ITAT, MUMBAI A BENCH 6. @ / GUARD FILE. / BY ORDER, '< & //TRUE COPY// / ( DY./ASSTT. REGISTRAR) , / ITAT, MUMBAI