Sri. K.P. Rao, Bangalore V. DCIT, Bangalore

MA 106/BANG/2010

• Counselvise Citation: [2011] 123 COUNSELVISE.COM (IT) 5994 (ITAT-BANGALORE)
• Duration Of Justice: 2 month(s) 2 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 21-01-2011
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: A
• Next Hearing Date: 07-01-2011
• Assessment Year: 2006-2007
• Appeal Filed On: 18-11-2010
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: MEERA SRIVASTAVA JT

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI GEORGE GEORGE K., JUDICIAL MEMBER AND SHRI A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER M.P. 106/BANG/2010 (ARISING OUT OF ITA NO. 372/BANG/2010) ASSESSMENT YEAR : 2006 - 07 SH RI K.P. RAO, NO.21/28, MITHILA, CRAIG PARK LAYOUT, M.G. ROAD CROSS, BANGALORE. : APPLIC ANT VS. THE DY. COMMISSIONER OF INCOME - TAX, CIRCLE 5(1), BANGALORE. : RESPONDENT APPLICANT BY : SHRI VINAY SIMHA, C.A. RESPONDENT BY : SMT. MEERA S RIVASTAVA, JT. CIT(DR) O R D E R PER A. MOHAN ALANKAMONY, ACCOUNTANT MEMBER THIS MISCELLANEOUS PETITION IS FILED BY THE ASSESSEE ON THE ORDER PASSED BY THE TRIBUNAL DATED 8.10.2010 IN ITA NO.372/BANG/2010 FOR THE ASSESSMENT YEAR 2006 - 07. 2. THE SUBMISS IONS OF THE ASSESSEE IS REPRODUCED HEREINBELOW: I. THE APPELLANT INVITES YOUR KIND ATTENTION TO PARA 10.1 OF PAGE NO.7 OF THE ORDER WHEREIN IT IS STATED THAT AS THE RENT WAS RS.5,831/ - ONLY, IT IS NOT SUBSTANTIAL TO CONSIDER THE VALUATION AT RS.5,00,000/ - FOR THE MP NO.106/BANG/2010 PAGE 2 OF 3 ASSESSMENT YEAR 1981 - 82, AS AGAINST THE ESTIMATED VALUE OF RS.4,00,000/ - TAKEN BY THE ASSESSING OFFICER, WITHOUT ANY BASIS. THE INCOME OF THE PROPERTY SHOWN AT RS.5,831/ - AS MENTIONED ABOVE IN THE RETURN IS ONLY FOR A FRACTION OF THE YEAR. THE P ROPERTY WAS LET OUT IN 1999 FOR RS.45,000/ - PER MONTH TO BE ENHANCED EVERY 3 YEARS AT 20%. THE LEASE DEED IS ENCLOSED FOR YOUR READY REFERENCE AS ANNEXURE - L. FOR THE YEAR UNDER CONSIDERATION, IT WAS RS.54,000/ - PER MONTH WHICH REPRESENTS SUBSTANTIAL RENT AS PER THE PLEA TAKEN BY THE APPELLANT. THE APPELLANT HAS ENCLOSED THE STATEMENT OF COMPUTATION OF INCOME FOR BOTH THE ASSESSMENT YEARS 2005 - 06 AND 2006 - 07 AS THE ANNEXURE II. IT IS CLEAR THAT THE INCOME RETURNED IN 2005 - 06 AND 2006 - 07 AS THE ANNEXURE II. IT IS CLEAR THAT THE INCOME RETURNED IN 2005 - 06 IS FOR THE FULL YEAR AT RS.54,000/ - PER MONTH AND FOR THE ASSESSMENT YEAR 2006 - 07 IT IS ONLY A PARTIAL RENT, FOR LESS THAN A MONTH, AFTER WHICH THE TENANT VACATED THE PROPERTY. FURTHER, THE ASSESSING O FFICER AS QUOTED BY YOUR HONOURS , NEVER GAVE ANY BASIS FOR HIS VALUATION AND SIMPLY TOOK AN ADHOC VALUE OF RS.4,00,000/ - . II. THE VALUE OF THE PROPERTY ON THE BASIS OF THE RENT WORKS OUT TO RS.14,60,996 AS PER ANNEXURE - III IN THE ASSESSMENT YEAR UNDER APPEAL, AND IF IT IS WORKED BACK TO 1981, IT AMOUNTS TO MUCH MORE THAN RS.5,00,000/ - AS CLAIMED BY THE APPELLANT. THE APPELLANT EXPLAINED THE BASIS OF ESTIMATED VALUE AT RS.5,00,000/ - AT THE TIME OF APPEAL WHEREAS THE ASSESSING OFFICER SIMPLY TOOK AN ADHO C VALUE OF RS.4,00,000/ - . AS THIS IS AN APPARENT MISTAKE ON RECORD, IT REQUIRES RECONSIDERATION BY THE HONOURABLE MEMBERS. THE APPELLANT THEREFORE, REQUESTS THE HONOURABLE MEMBERS TO TAKE THE ABOVE FACTS INTO CONSIDERATION AND ACCEPT THE VALUE OF RS.5,00 ,000/ - AS CONFIRMED BY THE COMMISSIONER OF APPEALS. 3. WE MAKE IT CLEAR THAT THE OBSERVATION OF THE CIT(APPEALS) REGARDING THE RENTAL INCOME EARNED BY THE ASSESSEE FROM THE PROPERTY IS NOT THE ONLY REASON FOR ADOPTING THE VALUE OF THE BUILDING FOR RS.4 LAKH S. IN FACT, THE ASSESSEE HAS NOT FURNISHED ANY DETAILS WITH RESPECT TO THE ESTIMATE OF THE MP NO.106/BANG/2010 PAGE 3 OF 3 VALUE OF THE BUILDING AS ON 1.4.1991 AT RS. 5 LAKHS. EVEN AT THE TIME OF HEARING THE MISCELLANEOUS PETITION, THE ASSESSEE HA S ONLY PRODUCED THE VALUATION OF THE P ROPERTY UNDER THE WEALTH - TAX ACT RULE (3) BASED ON THE PRESENT RENTAL VALUE OF THE PROPERTY, WHICH WAS WORKED BACK APPLYING COST OF INFLATION INDEX. THIS IS NOT A RECOGNIZED METHOD OF VALUING THE PROPERTY AS ON 1.4.1981. THE CORRECT METHOD TO VALUE THE C OST OF CONSTRUCTION OF THE BUILDING AS ON 1.4.1981 WOULD HAVE BEEN TO OBTAIN A VALUATION CERTIFICATE FROM AN APPROVED VALUER. FROM THE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY REASON TO ALTER OUR DECISION TO ADOPT THE VALUE OF THE BUILDING AT RS.4 LAKHS AS HELD BY THE LD. AO. 4. IN THE RESULT, THE MISCELLANEOUS PETITION FILED BY THE ASSESSEE IS DISMISSED. PRONOUNCED IN THE OPEN COURT ON THIS 21 ST DAY OF JANUARY, 2011 . SD/ - SD/ - ( GEORGE GEORGE K. ) ( A. MOHAN ALANKAMONY ) JUDICIAL MEMBER ACCOUNTANT MEMBER BANGALORE, DATED, THE 21 ST JANUARY, 2011 . DS/ - COPY TO: BY ORDER ASSISTANT REGISTRAR ITAT, BANGALORE. 1. APPLICANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE