Taheri Hatim Sarsanwala, Ahmedabad V. The ACIT, Circle Int. Taxa., Vadodara

ITA 875/AHD/2019

• Counselvise Citation: [2021] 104 COUNSELVISE.COM (IT) 7187 (ITAT-AHMEDABAD)
• Duration Of Justice: 2 year(s) 6 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-11-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 19-05-2019
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: V.K. SINGH

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL “SMC” BENCH, AHMEDABAD (through web-based video conferencing platform) BEFORE SHRI RAJPAL YADAV, VICE PRESIDENT ITA No. 875/Ahd/2019 Assessment Year : 2016-17 Taheri Hatim Sarsanwala, 5 th Floor, Kairos, Opp. Gandhi Labour Institute, Drive-in-Road, Ahmedabad-52 PAN : BMSPS 4189 M Vs. Asst. Commissioner of Income-Tax, Circle International Taxation, Vadodara अपीलाथ牸 अपीलाथ牸अपीलाथ牸 अपीलाथ牸/ (Appellant) 灹瀄 य 灹瀄 य灹瀄 य 灹瀄 यथ牸 थ牸थ牸 थ牸/ (Respondent) Assessee by : Shri Sanjay R. Shah, CA Revenue by : Shri V.K. Singh, Sr DR सुनवाई क琉 तारीख सुनवाई क琉 तारीखसुनवाई क琉 तारीख सुनवाई क琉 तारीख/Date of Hearing : 25/11/2021 घोषणा क琉 तारीख /Date of Pronouncement: 01/12/2021 आदेश आदेशआदेश आदेश/O R D E R The assessee is in appeal before the Tribunal against the order of learned Commissioner of Income-Tax (Appeals)-13, Ahmedabad [“CIT(A)” in short] dated 25.03.2019 passed for Assessment Year 2016-17. 2. The solitary grievance of the assessee is that the leaned CIT(A) has erred in confirming the disallowance of Rs.1,20,000/-, which was added by the Assessing Officer by making the disallowance of assessee’s claim under Section 24(a) of the Income-Tax Act, 1961 (“the Act” in short). 3. The brief facts of the case are that the assessee has filed his return of income on 01.03.2017 declaring total income at Rs.6,21,430/-. The computation of income is available on page No.2 of the paper-book. The assessee has disclosed the house property income, i.e. (i) Rs.4,43,760/- from Showroom No.2 D & C Kairos, Kairos, Opp. Mahatma Gandhi Labour Institute, Drive-in- Road, Ahmedabad and (ii) Rs.4,00,000/- from Flat No.C2-1116 at Shobha Ivory, A-Wing, Raviraj Astria, Kondhwa, Pune. The assessee has claimed standard deduction @ 30% of the gross rent under Section 24(a) of the Act. Such SMC-ITA No.875/Ahd/2019 Taheri Hatim Sarsanwala Vs. ACIT For AY: 2016-17 2 deduction was disallowed to the assessee by the Assessing Officer. He made an addition of Rs.2,53,128/- . 4. On appeal, the assessee filed detailed written submission which has been reproduced by the First Appellate Authority. The leaned CIT(A) thereafter recorded the following findings:- “7. During the course of appellate proceedings, the appellant has produced copy of Rent Agreement with respect to the property as mentioned below:- Showroom No.2 at Kairos, Gurukual Road, Ahmedabad – 4,43,760 The same has been verified from bank account statements and found to be correct. The AO is directed to allow claim of deduction u/s 24(a) of the IT Act, 1961 against rent income offered by the Appellant on the said property showroom No.2 at Kairos, Gurukual Road, Ahmedabad. 7.1 With regards to the second property Shop No.7 at Raviraj Astria, Pune - 4,00,000 the Appellant has submitted self prepared rent receipts without signature of the tenant, in spite of ample opportunities provided to the Applicant for submission of some cogent evidences like Rent agreement. The applicant could not submit any documentary evidences to establish the nature of receipt of income or a copy of rental agreement to establish that the income offered by the appellant was on account of rent from the said property. Further, even the amount received is not uniform and recurring monthwise. Therefore in the absence of cogent evidence, claim of deduction u/s 24(a) of the IT Act, 1961 cannot be allowed against the impugned property “Shop No.7 Raviraj Astria, Pune”. This ground of appeal is partly allowed.” 5. With the assistance of learned representatives, I have gone through the record carefully. A perusal of the above findings would disclose that the assessee has two house properties from where he got rental income of Rs.4,43,760/- and Rs.4,00,000/-. He claimed standard deduction 30% under SMC-ITA No.875/Ahd/2019 Taheri Hatim Sarsanwala Vs. ACIT For AY: 2016-17 3 Section 24(a) of the Act. This was disallowed by the Assessing Officer in the assessment proceedings; however, on appeal, the learned CIT(A) has allowed the standard deduction with regard to the rental income earned from Ahmedabad property but disallowed the same from the rental income of Pune flat. The reasoning given by both the Revenue Authorities are without any coherence with the nature of the dispute. The learned First Appellate Authority, in its findings extracted supra, disputes the receipt of rental income, viz. the assessee failed to give rent agreement; the receipts are issued by the assessee etc. To my mind, firstly, the Assessing Officer ought to have called for the tenant and ought to have ascertained the position as to whether this flat was occupied by anybody. A report could be called for from the Society at C2- 1116 at Shobha Ivory, Pune. Further report could be called for as to whether any electricity consumption was there or not. The assessee has been stated to be a non-resident individual and having income from rent of house properties. No inquiry was conducted and gross rental income is being assessed under the garb of disbelieving house property income. To my mind, the reasoning given by the Revenue is not sufficient to reject the claim of the assessee. Therefore, I allow this appeal and direct the Assessing Officer to grant standard deduction even on the second house property income, i.e. on the rental income of Rs.4,00,000/- received by the assessee from letting out Flat No.C2-1116 at Shobha Ivory-Pune. 6. In the result, the appeal of the assessee is allowed. Order pronounced in the Court on 1 st December, 2021 at Ahmedabad. Sd/- (RAJPAL YADAV) VICE PRESIDENT Ahmedabad; Dated 01/12/2021 *Bt SMC-ITA No.875/Ahd/2019 Taheri Hatim Sarsanwala Vs. ACIT For AY: 2016-17 4 आदेश क琉 灹ितिलिप आदेश क琉 灹ितिलिप आदेश क琉 灹ितिलिप आदेश क琉 灹ितिलिप अ灡ेिषत अ灡ेिषतअ灡ेिषत अ灡ेिषत/Copy of the Order forwarded to : 1. अपीलाथ牸 / The Appellant 2. 灹瀄यथ牸 / The Respondent. 3. संबंिधत आयकर आयु猴 / Concerned CIT 4. आयकर आयु猴(अपील) / The CIT(A) 5. िवभागीय 灹ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड榁 फाईल / Guard file. आ आआ आदेशानुसार देशानुसारदेशानुसार देशानुसार/BY ORDER, TRUE COPY उप उपउप उप/सहायक पंजीकार सहायक पंजीकारसहायक पंजीकार सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरणआयकर अपीलीय अिधकरण आयकर अपीलीय अिधकरण, अहमदाबाद अहमदाबादअहमदाबाद अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation- ...25.11.2021...... 2. Date on which the typed draft is placed before the Dictating Member ...01.12.2021............ Other member ...01.12.2021.................. 3. Date on which the approved draft comes to the Sr.P.S./P.S. - ...01.12.2021............... 4. Date on which the fair order is placed before the Dictating Member for Pronouncement ...01.12.2021 5. Date on which the file goes to the Bench Clerk...02.12.2021................ 6. Date on which the file goes to the Head Clerk.................................. 7. The date on which the file goes to the Assistant Registrar for signature on the order..................... 8. Date of Despatch of the Order..................