M/s. Apex Constructions, CHENNAI V. ACIT, CHENNAI

ITA 891/CHNY/2012

• Counselvise Citation: 89121714 RSA 2012
• Duration Of Justice: 3 year(s) 5 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Next Hearing Date: 10-09-2015
• Assessment Year: 2005-2006
• Appeal Filed On: 20-04-2012
• Court: TRIBUNAL
• Department Lawyers: A V SREEKANTH
• Assessee Lawyers: S SRIDHAR
• Keywords: Opportunity of being heard

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL C BENCH, CHENNAI , ! ' . #$ , % &' BEFORE SHRI CHANDRA POOJARI, ACCOUNTANT MEMBER AND SHRI DUVVURU RL REDDY, JUDICIAL MEMBER ./ ITA NO. 891/MDS/2012 / ASSESSMENT YEAR : 2005-06 M/S. APEX CONSTRUCTIONS, POTTIPATTI PLAZA, II FLOOR, 77, NUNGAMBAKKAM HIGH ROAD, CHENNAI 34. PAN AAJFA1604R APPELLANT) V. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-XV, CHENNAI 34. RESPONDENT) / APPELLANT BY : SHRI S. SRIDHAR, ADVOCATE / RESPONDENT BY : SHRI A.V.SREEKANTH, JCIT ! / DATE OF HEARING : 10.09.2015 '# ! / DATE OF PRONOUNCEMENT: 30.09.2015 ( / O R D E R PER CHANDRA POOJARI, ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME-TAX(APPEALS) DATED 15 .2.2012. - - ITA 891/12 2 2. THE GRIEVANCE OF THE ASSESSEE IN THIS APPEAL IS WITH REGARD TO ANNUAL LETTABLE VALUE OF THE SECOND AND FIFTH FLOOR S OF ARJAY APEX CENTRE AS INCOME THOUGH IT WAS VACATE D FOR THE WHOLE ASSESSMENT YEAR. 3. THE FACTS OF THE CASE ARE THAT THE ASSESSING OFF ICER NOTICED THAT THE ASSESSEE OWNS A HOUSE PROPERTY AR JAY APEX CENTRE AT DOOR NO.24, COLLEGE ROAD, CHENNAI. THE AO FOUND THAT THE ASSESSEE HAS NOT OFFERED ANY RENT AL INCOME IN RESPECT OF THE SECOND AND FIFTH FLOORS OF THE SAID PROPERTY VACATED DURING THE FINANCIAL YEAR 2005-06. THE AO DETERMINED THE ALV OF THE SECOND AND FIFTH FLOOR S AT ` 2,60,224/- AND ` 3,06,088/- RESPECTIVELY, BASED ON THE PROPERTY TAX CARDS OF THE MUNICIPAL CORPORATION AND BROUGHT TO TAX. AGGRIEVED, THE ASSESSEE WENT IN APPEAL BEF ORE THE CIT(APPEALS). 4. ON APPEAL, THE CIT(APPEALS) PLACED RELIANCE ON SEC.23(1)(A)(B)(C) OF THE ACT AND ALSO THE DECISION OF THE TRIBUNAL IN THE CASE OF SMT. POONAM SAWHNEY V. AO ( 20 SOT 69)(DEL), WHEREIN IT WAS HELD AS UNDER : - - ITA 891/12 3 IF OWNER OF A HOUSE HAS NO INTENTION TO LET OUT HOUSE AND DOES NOT OCCUPY SAME FOR LARGE PART OF A PARTICULAR YEAR OR FOR YEARS TOGETHER, SUCH HOUSES, ALTHOUGH NOT IN ACTUAL PHYSICAL POSSESSION OF OWNER, WOULD BE DEEMED TO BE UNDER SELF-OCCUPATION OF OWNER AND THEIR ANNUAL LETTING VALUE (ALV) WOULD BE DETERMINED AS PER CLAUSE (A) OF SECTION 23(1). SUCH CATEGORY OF HOUSES WHICH ARE MAINTAINED BY OWNER WITH AN INTENTION FOR LETTING OUT, RENT RECEIVED OR RECEIVABLE IN SUCH CASE, BEING IN EXCESS OF REASONABLE SUM ASSESSABLE UNDER CLAUSE (A) OF SECTION 23(1), WOULD BE LIABLE TO BE ASSESSED AND THEIR ALV WOULD BE DETERMINED AS PER CLAUSE (B) OF SUB-SECTION (1) OF SECTION 23. WHERE OWNER OF PROPERTY WITH INTENTION TO EARN RENT HAS LET OUT PROPERTY BUT FOR REASONS BEYOND CONTROL OF OWNER OR FOR SOME OTHER GOODS REASONS, PROPERTY (WHOLE OR IN PART) REMAINS VACANT DURING WHOLE OR ANY PART OF PREVIOUS YEAR, AND ACTUAL RENT RECEIVED OR RECEIVABLE IS LESS THAN ALV REFERRED TO IN CLAUSE (A), THEN SUCH HOUSES WOULD BE ASSESSED UNDER CLAUSE (C) OF SECTION 23(1). ACCORDINGLY, THE CIT(APPEALS) CONFIRMED THE ORDER O F THE AO. AGAINST THIS, THE ASSESSEE IS IN APPEAL BEFORE US. 5. WE HAVE HEARD BOTH THE SIDES AND PERUSED THE MATERIAL ON RECORD. THE LD. AR SUBMITTED THAT THE AO HAS NOT EXAMINED THE ISSUE PROPERLY WITH REGARD TO LETT ING OF PROPERTY, WHETHER IT WAS A LET OUT PROPERTY OR IT W AS NEVER - - ITA 891/12 4 INTENDED TO BE LET OUT OR IT WAS A SELF-OCCUPIED ON E. BEING SO, THE LD. AR SUBMITTED THAT THE ISSUE TO BE REMIT TED BACK TO THE FILE OF THE AO FOR FRESH CONSIDERATION IN TH E LIGHT OF THE JUDGMENT RELIED ON BY THE CIT(APPEALS) IN HIS ORDER . 6. WE HAVE CAREFULLY GONE THROUGH THE ORDER OF THE TRIBUNAL CITED SUPRA. IN THAT CASE, IT WAS OBSERVE D AS UNDER: CLAUSE TO SUB-S.(1) OF S.23 HAS TO BE CONSIDERED CONJUNCTIVELY WITH CL. (A) THEREOF. THEREFORE, WHERE PROPERTY IS LET OUT BUT WAS VACANT DURING THE WHOLE OR PART OF THE PREVIOUS YEAR, ONE HAS TO SEE WHAT IS ITS LETTING VALUE UNDER CL.(A), WHAT IS THE ACTUAL RENT RECEIVED OR RECEIVABLE OF SUCH PROPERTY AND WHAT IS THE SUM WHICH THE OWNER COULD NOT REALISE OWING TO VACANCY OF THE PROPERTY IN THE PREVIOUS YEAR. IF AFTER DEDUCTING NON-REALIZED RENT DUE TO VACANCY, THE ACTUAL AMOUNT OUT OF THE RENT RECEIVED OR RECEIVABLE IS LESS THAN THE SUM ASSESSABLE UNDER CL. (A), THEN SUCH REDUCED AMOUNT IS TO BE SUBJECTED TO TAX. THERE COULD NOT NO DISPUTE THAT IN RESPECT OF A PROPERTY, WHICH IS A LET OUT PROPERTY BUT REMAINS VACANT DURING THE WHOLE OF THE PREVIOUS YEAR, THE ALV OF SUCH PROPERTY WOULD BE NIL AS PER CL. (C) OF SUB-S.(1) OF S.23. BUT IN EVERY CASE A FINDING HAS TO BE RECORDED UNDER WHAT CATEGORY THE HOUSE PROPERTY FALLS IN THE RELEVANT PREVIOUS YEAR. TO ATTRACT CL. (C) IT HAS TO BE SHOWN THAT THE PROPERTY WAS INTENDED TO BE LET, BUT REMAINED VACANT DUE TO CIRCUMSTANCES NOT ION THE CONTROL OF THE OWNER. CLAUSE (C) WILL NOT COVER CASES WHERE THE HOUSE - - ITA 891/12 5 PROPERTY IS MAINTAINED BY THE ASSESSEE FOR SELF USE OR FOR OTHER USE AND HAS NO INTENTION WHATSOEVER TO LET OUT THE PROPERTY TO EARN RENT THEREFROM. TO ARRIVE AT AN APPROPRIATE FINDING, IT MAY BE NECESSARY TO SEE THE POSITION OF THE PROPERTY IN THE PRECEDING AS ALSO IN THE SUBSEQUENT ASSESSMENT YEAR. THE AFORESAID CLAUSE WOULD NOT BE APPLICABLE TO PROPERTIES, WHICH ARE VACANT BUT UNDER THE LAW WOULD BE DEEMED TO BE UNDER SELF-OCCUPATION. OWNERS INTENTION NOT TO LET OUT THE PROPERTIES IS A MATERI AL FACTOR. IT IS EVIDENT FROM THE ASSESSMENT ORDER THAT AO DID NOT EXAMINE THE ISSUE FROM PROPER PERSPECTIVE. DETAILED FACTS ARE NOT RECORDED TO SHOW WHETHER THE PROPERTY WAS A LET OUT PROPERTY OR IT WAS NEVER INTENDED TO BE LET OUT AND WAS A SELF-OCCUPIED PROPERTY. THE IMPUGNED ORDER OF CIT(A) DOES NOT IMPROVE THE SITUATION. THEREFORE, IN THE ABOVE CIRCUMSTANCES, THERE IS NO ALTERNATIVE BUT TO SET ASIDE THE IMPUGNED ORDERS AND RESTORE THE MATTER TO THE FILE OF THE AO TO RE-EXAMINE THE ISSUE IN ACCORDANCE WITH LAW AND IN THE LIGHT OF OBSERVATIONS MADE ABOVE. THE AO SHOULD ALSO PROVIDE REASONABLE OPPORTUNITY OF BEING HEARD TO THE ASSESSEE BEFORE DECIDING THE ISSUE AFRESH. 7. WE FIND THAT THE CIT(APPEALS) ANALYSED THE ABOVE JUDGMENT AND CAME TO THE CONCLUSION THAT THE AO IS JUSTIFIED IN DETERMINING THE ALV AS PER CLAUSE (A) OF SUB- SEC.(1) OF SEC.23 OF THE ACT BY ADOPTING THE PROPER TY TAX CARDS OF THE MUNICIPALITY CORPORATION AND CONFIRMED THE SAME. BEING SO, THE CONTENTION OF THE ASSESSEES COUNSEL - - ITA 891/12 6 THAT THE LOWER AUTHORITIES HAVE NOT EXAMINED THE IS SUE PROPERLY IN THE LIGHT OF THE ABOVE ORDER OF THE TRI BUNAL CITED SUPRA IS NOT CORRECT. THE CIT(APPEALS) HAS EXAMINE D THE CONTENTION OF THE ASSESSEE IN THE LIGHT OF THE ABOV E JUDGMENT AND GIVEN A FINDING THEREIN. HENCE, WE DO NOT FIND ANY INFIRMITY IN THE ORDER OF THE CIT(APPEALS) AND THE SAME IS CONFIRMED. 8. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED ON WEDNESDAY, THE 30 TH OF SEPT , 2015 AT CHENNAI. SD/- SD/- ( $ % . & '( ) ( ) * + , ) DUVVURU RL REDDY - ./012304556037- 8 9: /JUDICIAL MEMBER ! 9:;<<5=1>01>?@AB@3 )8 /CHENNAI, C9 /DATED, THE 30 TH SEPT., 2015. MPO* 9D EFGF /COPY TO: 1. /APPELLANT 2. /RESPONDENT 3. H- /CIT(A) 4. H /CIT 5. FIJ K /DR 6. J(L /GF.