ITO 4(3)(1), MUMBAI V. PREMSHREE GEMS P. LTD, MUMBAI

ITA 7970/MUM/2011

• Counselvise Citation: [2012] 119 COUNSELVISE.COM (IT) 8321 (ITAT-MUMBAI)
• Duration Of Justice: 11 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-11-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: C
• Next Hearing Date: 12-11-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 25-11-2011
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Assessee Lawyers: BIKAS KUMAR BOGI

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, MUMBAI BENCH G , MUMBAI BEFORE SHRI RAJENDRA SINGH, ACCOUNTANT MEMBER AND SHRI VIVEK VARMA, JUDICIAL MEMBER ITA NO. 7971/MUM/2011 ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER WARD 4(3)(1), ROOM NO.648 6 TH FLOOR, AAYAKAR BHAVAN MUMBAI-400 020. VS. M/S.PREMSUDHA EXPORTS PVT. LTD.; 545 PANCHRATNA OPERA HOUSE MUMBAI-400 004. PAN NO. AABCP 1751 B (APPELLANT) (RESPONDENT) ITA NO. 7970/MUM/2011 ASSESSMENT YEAR : 2008-09 ITA NO. 8014/MUM/2011 ASSESSMENT YEAR : 2008-09 INCOME TAX OFFICER WARD 4(3)(1), ROOM NO.648 6 TH FLOOR, AAYAKAR BHAVAN MUMBAI-400 020. VS. M/S.PREMSHREE GEMS PVT. LTD. 545 PANCHRATNA, OPERA HOUSE MUMBAI-400 004. PAN NO. AABCP 1743 M (APPELLANT) (RESPONDENT) DEPARTMENT BY : MS. NEERAJA PRADHAN ASSESSEE BY : SHRI BIKAS KUMAR BOGI DATE OF HEARING : 12.11.2012 DATE OF PRONOUNCEMENT : 12.11.2012 ITA NO.7971 OF 11 & 7970 & 8014 OF 11 A.Y. 08-09 2 O R D E R PER BENCH: THESE APPEALS ARE DIRECTED AGAINST DIFFERENT ORDERS ALL DATED 23.9.2011 OF CIT(A) FOR THE ASSESSMENT YEAR 2008-09 IN RESPECT OF ASSESSEES OF SAME GROUP. THE IDENTICAL DISPUTE RAISED IN A LL THESE APPEALS IS REGARDING DETERMINATION OF ANNUAL VALUE OF PROPERTY FOR THE PURPOSE OF COMPUTATION OF HOUSE PROPERTY INCOME. THESE A PPEALS ARE BEING DISPOSED OFF BY A SINGLE CONSOLIDATED ORDER FOR T HE SAKE OF CONVENIENCE. THE APPEALS IN ITA NO.7970/M/2011 AND IT A NO.8014/M/2011 BY M/S. PREMSHREE GEMS PVT. LTD. ARE AG AINST SAME ORDER DATED 23.9.2011 OF THE CIT(A) AND ON THE SAME ISSUE AGAINST THE SAME ASSESSEE. THE ASSESSEE HAS FILED TWO APPEALS IN RESPE CT OF THE SAME ASSESSMENT YEAR IN RESPECT OF SAME ORDER OF THE CI T(A), AND THEREFORE ITA NO.8014/M/2011 WHICH WAS FILED LATER IS DISMISSED AS BEING INFRUCTUOUS. 2. ITA NO.7970/M/2011 IN CASE OF M/S. PREMSHREE GEMS PVT. LTD. AND ITA NO.7971/M/2011 IN CASE OF M/S. PREMSUDHA EXPORTS PVT. LTD. ARE AGAINST THE ORDER DATED 23.9.2011 OF C IT(A) FOR ASSESSMENT YEAR 2008-09. THE IDENTICAL DISPUTES RAISED ARE REGARDING VACANCY ALLOWANCE ALLOWED BY CIT(A). THE AO HAD DETERM INED THE ITA NO.7971 OF 11 & 7970 & 8014 OF 11 A.Y. 08-09 3 ANNUAL VALUE FOR THE ENTIRE YEAR THOUGH PROPERTY WA S LET OUT ONLY FOR PART OF THE YEAR. THESE PROPERTIES WERE NOT LET OUT A ND WERE LYING VACANT TILL 2006-07. THESE WERE LET OUT FOR PART OF T HE YEAR DURING FINANCIAL YEAR 2007-08 FROM 21.10.2007 TO 31.12.200 7. IN CASE OF M/S. PREMSHREE GEMS PROPERTY HAD BEEN LET OUT AT MONTHLY R ENT OF RS.3,75,000/- WHEREAS IN CASE OF M/S. PREMSUDHA EXPORTS M ONTHLY RENT WAS RS.3,25,000/-.RENT ANNUALLY RECEIVED HAD BEEN TAKEN BY THE ASSESSEE AS ANNUAL VALUE. THE AO HOWEVER DETERMINED ANNU AL VALUE AT RS.51.00 LACS TAKING RENT AT RS.4,25,000/- PER MONTH FO R THE WHOLE YEAR AND ASSESSMENT WAS MADE ACCORDINGLY AFTER ALLOWING STA TUTORY DEDUCTIONS. 2.1 THE ASSESSEE DISPUTED THE ORDERS OF AO AND SUBMITTED BEFORE CIT(A) THAT THE AO WAS NOT JUSTIFIED FOR ESTIMATING VA LUE FOR VACANT PERIOD OF SIX MONTHS AND 20 DAYS FROM 1.4.2007 TO 20.1 0.2007. CIT(A) FOLLOWING THE DECISION OF THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEARS 2006-07 IN ITA NOS.6903/M/2008 AND 6904/ M/2008 IN WHICH IT WAS HELD THAT THE VACANCY ALLOWANCE WAS REQUI RED TO BE ALLOWED TO THE ASSESSEE AND RENT ACTUALLY RECEIVED BEING LOWER THAN THE VALUE ASSESSABLE UNDER SECTION 23(1)(A) BECAUSE OF THE PROPERTY BEING VACANT HAS TO BE TAKEN AS ANNUAL VALUE. IN ASSE SSMENT YEAR 2006-07 THE TRIBUNAL HAD FOLLOWED THE ORDERS IN THE EARLIER YEARS. ITA NO.7971 OF 11 & 7970 & 8014 OF 11 A.Y. 08-09 4 AGGRIEVED BY THE DECISION OF CIT(A), BOTH THE ASSESSEES AR E IN APPEAL BEFORE THE TRIBUNAL. 3. WE HAVE HEARD BOTH THE PARTIES, PERUSED THE RECORDS AND CONSIDERED THE MATTER CAREFULLY. THE INCOME FROM HOUSE P ROPERTY IS REQUIRED TO BE COMPUTED ON THE BASIS OF ANNUAL VALUE WHICH IS DEFINED IN SECTION 23(1)(A) AS THE SUM FOR WHICH THE PROPERTY MI GHT REASONABLY BE EXPECTED TO BE LET OUT FROM YEAR TO YE AR AND IN CASE PROPERTY IS ACTUALLY LET AND RENT RECEIVED IS MORE THA N THE VALUE DETERMINED UNDER SECTION 23)1)(A), THE ACTUAL RENT RECE IVED HAS TO BE TAKEN AS ANNUAL VALUE. HOWEVER IN CASE PROPERTY IS VACAN T DURING WHOLE OR PART OF THE YEAR AND OWING TO SUCH VACANCY REN T RECEIVED IS LESS THAN THE SUM REFERRED UNDER SECTION 23(1)(A) THEN T HE RENT SO RECEIVED OR RECEIVABLE HAS TO BE TAKEN AS ANNUAL VALUE UNDER SECTION 23(1)(C). IN THE EARLIER YEARS, THESE PROPERTIES WERE F ULLY VACANT AND, THEREFORE, THE TRIBUNAL HAD TAKEN THE VIEW THAT THE ANNUAL VALUE HAS TO BE TAKEN AT NIL AS THERE WAS NO RENT RECEIVED. IN THE PRESENT YEAR PROPERTY HAS BEEN LET FROM 21.10.2007 TO 31.3.2007. THE ISSUE IS WHETHER THE VACANCY ALLOWANCE CAN BE ALLOWED TO THE ASSE SSEE FOR THE PERIOD FROM 1.4.2007 TO 20.10.2007. SINCE PROPERTIES HAD BEEN LET ONLY FOR PART OF THE YEAR FROM 21.10.2007 TO 31.12. 2007, THE RENT RECEIVED OR RECEIVABLE WOULD DEFINITELY BE MUCH LESS TH AN THE ANNUAL VALUE DETERMINED UNDER SECTION 23(1)(A) FOR THE WHOLE YEAR. ITA NO.7971 OF 11 & 7970 & 8014 OF 11 A.Y. 08-09 5 THEREFORE, RENT RECEIVED HAS TO BE TAKEN AS ANNUAL VA LUE WHICH IS IN CONFORMITY WITH THE DECISION OF THE TRIBUNAL IN EARLIE R YEARS IN ASSESSEES OWN CASE. THEREFORE, WE SEE NO INFIRMITY IN TH E ORDER OF CIT(A) WHICH IS AS PER DECISION OF THE TRIBUNAL IN THE EARLIER YEARS. WE ACCORDINGLY CONFIRM THE ORDER OF CIT(A) AND DISMISS THE A PPEALS OF THE REVENUE. 4. IN THE RESULT, ALL THE APPEALS OF THE REVENUE STAND DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 12.11.2012. SD/- SD/- (VIVEK VARMA ) JUDICIAL MEMBER (RAJENDRA SINGH) ACCOUNTANT MEMBER MUMBAI, DATED: 12.11.2012. JV. COPY TO: THE APPELLANT THE RESPONDENT THE CIT, CONCERNED, MUMBAI THE CIT(A) CONCERNED, MUMBAI THE DR BENCH TRUE COPY BY ORDER DY/ASSTT. REGISTRAR, ITAT, MUMBAI.