PARMANAND KEWLRAMANI, MUMBAI v. CIT(A) CITY XX, MUMBAI

ITA 3556/MUM/2008 | 2004-2005
Pronouncement Date: 31-05-2010 | Result: Allowed

Appeal Details

RSA Number 355619914 RSA 2008
Assessee PAN AABPK2595B
Bench Mumbai
Appeal Number ITA 3556/MUM/2008
Duration Of Justice 2 year(s) 8 day(s)
Appellant PARMANAND KEWLRAMANI, MUMBAI
Respondent CIT(A) CITY XX, MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 31-05-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted C
Tribunal Order Date 31-05-2010
Date Of Final Hearing 28-05-2010
Next Hearing Date 28-05-2010
Assessment Year 2004-2005
Appeal Filed On 22-05-2008
Judgment Text
ITA NO. 3556/MUM/2008 ASSESSMENT YEAR : 2004-05 PAGE 1 OF 6 IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI C BENCH MUMBAI BEFORE SHRI D.K. AGRAWAL (JUDICIAL MEMBER) AND SHRI PRAMOD KUMAR (ACCOUNTANT MEMBER) ITA NO. 3556/MUM/2008 ASSESSMENT YEAR 2004-05 DATE OF HEARING 28.5.2010 PARMANAND KEWALRAMANI ......APPELLANT 2005/6 STELLER TOWER LOKHANDWALA ANDHERI (WEST) MUMBAI 400 058 PAN AABPK2595B VS. INCOME TAX OFFICER 20(2)3 .. RESPONDE NT BANDRA KURLA COMPLEX BANDRA MUMBAI 400 050 APPELLANT BY : SHRI A. RAZZAQ RESPONDENT BY : SHRI NAVEEN GUPTA O R D E R PER PRAMOD KUMAR: 1. THE SHORT ISSUE THAT WE ARE REQUIRED TO ADJUDICA TE IN THIS APPEAL IS WHETHER OR NOT THE LD. CIT(A) WAS JUSTIFIED IN CONFIRMING T HE ADDITION OF RS.3 00 000 TO THE INCOME OF THE HOUSE PROPERTY. THE ASSESSMENT YEAR I NVOLVED IS 2004-05 AND THE ITA NO. 3556/MUM/2008 ASSESSMENT YEAR : 2004-05 PAGE 2 OF 6 IMPUGNED ASSESSMENT WAS FRAMED U/S 143(3) OF THE IN COME TAX ACT 1961 (FOR SHORT 'THE ACT' ). 2. TO ADJUDICATE ON THIS APPEAL ONLY A FEW UNDISPUTED MATERIAL FACTS NEED TO BE TAKEN NOTE OF. THE ASSESSEE IS AN INDIVI DUAL AND HE OWN TWO RESIDENTIAL FLATS ONE AT LOKHANDWALA WHICH IS TR EATED AS SELF OCCUPIED PROPERTY AND THE OTHER THOUGH SELF OCCUPIED BUT T REATED AS DEEMED TO HAVE BEEN LET OUT AT THE OPTION OF THE ASSESSEE AT LAME R CHS BANDRA. DURING THE COURSE OF ASSESSMENT PROCEEDINGS IT WAS SUBMITTED BY THE ASSESSEE THAT ANNUAL RATEABLE VALUE OF THE BANDRA FLAT IS RS.17 5 00 PER ANNUM AND THE AREA OF THE FLAT IS 1 500 SQ.FT. THE ASSESSING OFFICER R EJECTED THIS EXPLANATION AND RATHER SUMMARILY CONCLUDED THAT I DO NOT AGREE WITH THE EXPLANATION OF THE ASSESSEE AND I HEREBY ESTIMATE THE ANNUAL VALUE OF LET OUT PROPERTY AT BANDRA AT RS.25 000 PER MONTH AND THEREFORE THE ANNUAL R ATEABLE VALUE IS RS.3 00 000 WHICH WILL BE TREATED AS INCOME FROM HOUSE PROPERT Y AND TAXED ACCORDINGLY. AGGRIEVED ASSESSEE CARRIED THE MATTER IN APPEAL BE FORE THE LD. CIT(A) BUT WITHOUT ANY SUCCESS. THE LD. CIT(A) DISMISSED THE A PPEAL BY INTER-ALIA OBSERVING AS FOLLOWS:- 2.3 I HAVE CONSIDERED THE ASSESSMENT ORDER AND THE SUBMISSIONS OF THE APPELLANT. AS I FIND THE ISSUE HERE IS THE DETERMINATION OF THE ANNUAL VALUE OF THE LET OUT PR OPERTY AT BANDRA. IN SUPPORT OF HIS STAND THE APPELLANT HAS R EFERRED TO THE RATEABLE VALUE AS GIVEN BY THE CO-OPERATIVE HOUSING SOCIETY. THE ASSESSING OFFICER HAS NOT ACCEPTED THIS AND DETERMI NED THE ANNUAL VALUE AT RS.3 00 000/- @ RS.25 000/- PER MON TH. COMPARING THE TWO POSITION I FIND THAT THE APPELLA NT HAS NOT SUBMITTED ANYTHING IN SUPPORT OF HIS STAND THAT THE RATEABLE VALUE OF THE LET OUT PROPERTY IS THE VALUE SHOWN BY HIM. HE HAS MERELY STATED THAT THIS IS THE VALUE SHOWN BY THE C O-OPERATIVE HOUSING SOCIETY. IN ABSENCE OF SPECIFIC DETAILS TH IS CANNOT BE ITA NO. 3556/MUM/2008 ASSESSMENT YEAR : 2004-05 PAGE 3 OF 6 TREATED AS AUTHENTIC. AS AGAINST THIS CONSIDERING THE LOCATION OF THE PROPERTY I FIND THE ESTIMATE MADE BY THE ASSES SING OFFICER FAIR AND REASONABLE. THE APPELLANT HAS ALSO NOT BRO UGHT ANYTHING ON RECORD TO EXPLAIN WHY THE ESTIMATE MADE BY THE A SSESSING OFFICER IS NOT FAIR OR REASONABLE. THE APPELLANT IS NOT RIGHT IN STATING THAT PROVISIONS OF SECTION 22 OF THE ACT ST IPULATES THAT INCOME FROM HOUSE PROPERTY SHALL BE CHARGEABLE ON A NNUAL VALUE AS PER MUNICIPAL RECORDS. AS MAY BE SEEN THERE IS NOTHING IN SECTION 22 OF THE ACT TO THIS EFFECT. CONTRARY TO T HIS SECTION 23(1)(A) OF THE ACT STIPULATES THAT THE ANNUAL VALU E FOR THE PURPOSE OF SECTION 22 OF THE ACT SHALL BE DEEMED TO BE THE SUM FOR WHICH THE ANNUAL VALUE FOR THE PURPOSES OF SECTION 22 OF THE ACT SHALL BE DEEMED TO BE THE SUM FOR WHICH THE PROPERT Y MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR. TH E REFERENCE TO MY ORDER DATED 5.6.2007 FOR THE A.Y. 2003-04 IS ALS O NOT RELEVANT BECAUSE THE ISSUE FOR THE A.Y. 2003-04 WAS THE DETE RMINATION OF THE PROPERTY WHICH WAS TO BE DEEMED AS LET OUT AND NOT DETERMINATION OF THE ANNUAL VALUE. IN LIGHT OF THE FORGOING I CONFIRM THE ASSESSING OFFICERS ACTION AND DISMISS THE GROUND OF APPEAL. 3. AGGRIEVED BY THE STAND SO TAKEN BY THE LD. CIT(A) THE ASSESSEE IS IN FURTHER APPEAL BEFORE US. 4. WE HAVE HEARD THE RIVAL CONTENTIONS PERUSED THE MA TERIAL ON RECORD AND DULY CONSIDERED FACTUAL MATRIX OF THE CASE AS ALSO THE APPLICABLE LEGAL POSITION. 5. WE HAVE NOTED THAT THE ASSESSING OFFICER HAS CLEARL Y PROC3EEDED ON THE ERRONEOUS ASSUMPTION THAT THE PROPERTY WAS LET OUT AS EVIDENT FROM HIS OBSERVATION EXTRACTED EARLIER IN THIS ORDER. THERE IS NO DISPUTE THAT PROPERTY IS SELF OCCUPIED AND IT IS ONLY FOR THE FICTION PUR POSE OF COMPUTING INCOME FROM HOUSE PROPERTY THAT IT IS DEEMED TO HAVE BEEN LET OUT. THE ANNUAL VALUE OF SUCH A PROPERTY IS TO BE TAKEN AT THE SUM FOR WHICH PROPERTY MIGHT ITA NO. 3556/MUM/2008 ASSESSMENT YEAR : 2004-05 PAGE 4 OF 6 REASONABLY BE EXPECTED TO BE LET OUT FROM YEAR TO Y EAR BUT THEN THE PRICE AT WHICH PROPERTY CAN BE REASONABLY BE EXPECTED OUT TO BE LET OUT IS MUNICIPAL RATEABLE VALUE . IT IS NOT OPEN TO THE ASSESSING OFFICER TO DISREG ARD THE MUNICIPAL RATEABLE VALUE AND ADOPT WHAT THE ASSESS ING OFFICER ESTIMATES TO BE REASONABLE RENT OF SUCH PROPERTY. WE MAY IN THI S REGARD REFER TO ADOPT THE REASONING CONTAINED IN DECISION OF A CO-ORDINA TE BENCH IN THE CASE OF PARK PAPER INDUSTRIES P. LTD. VS ITO 25 SOT 406. I N THIS VIEW OF THE MATTER AND RESPECTFULLY FOLLOWING THE CO-ORDINATE BENCH DE CISION IN THE CASE OF PARK PAPER INDUSTRIES P. LTD. (SUPRA WE VACATE THE ORDE RS OF THE AUTHORITIES BELOW ON THIS AND DIRECT THE ASSESSING OFFICER TO RE-COMP UTE ASSESSEES INCOME FROM HOUSE PROPERTY IN RESPECT OF BANDRA FLAT BY A DOPTING MUNICIPAL RATEABLE VALUE. 6. GRIEVANCE OF THE ASSESSEE IS THUS UPHELD IN PRINCIP LE AND THE ASSESSING OFFICER IS DIRECTED TO ADOPT MUNICIPAL RATEABLE VAL UE FOR COMPUTING THE INCOME FROM HOUSE PROPERTY. THE ASSESSEE GETS THE R ELIEF ACCORDINGLY. 7. IN THE RESULT ASSESSEES APPEAL IS ALLOWED. PRONOU NCED IN THE OPEN COURT TODAY ON 31 ST DAY OF MAY 2010. SD/XX SD/XX (D.K. AGRAWAL) (PRAMOD KUMAR) JUDICIAL MEMBER ACCOUNTANT MEMBER MUMBAI; 31 ST DAY OF MAY 2010. ITA NO. 3556/MUM/2008 ASSESSMENT YEAR : 2004-05 PAGE 5 OF 6 COPY FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT 3. DIRECTOR OF INCOME TAX (INTERNATIONAL TAXATION) MUMBAI 4. COMMISSIONER (APPEALS) MUMBAI 5. DEPARTMENTAL REPRESENTATIVE C BENCH ITAT MUMB AI 6. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES MUMBAI PRADEEP J. CHOWDHURY SR. PRIVATE SECRETARY ITA NO. 3556/MUM/2008 ASSESSMENT YEAR : 2004-05 PAGE 6 OF 6 DATE INITIAL 1. DRAFT DICTATED ON 28.5.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 28.5.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER 28.5.2010 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER 28.5.2010 JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 28.5.2010 SR.PS/PS 6. DATE OF PRONOUNCEMENT 31.5.2010 SR.PS 7. FILE SENT TO THE BENCH CLERK 31.5.2010 SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER