M/S. JAYANTILAL W. JAIN, MUMBAI v. THE ITO 24(3)(1), MUMBAI

ITA 1331/MUM/2008 | 2004-2005
Pronouncement Date: 04-02-2010 | Result: Dismissed

Appeal Details

RSA Number 133119914 RSA 2008
Bench Mumbai
Appeal Number ITA 1331/MUM/2008
Duration Of Justice 1 year(s) 11 month(s) 11 day(s)
Appellant M/S. JAYANTILAL W. JAIN, MUMBAI
Respondent THE ITO 24(3)(1), MUMBAI
Appeal Type Income Tax Appeal
Pronouncement Date 04-02-2010
Appeal Filed By Assessee
Order Result Dismissed
Bench Allotted J
Tribunal Order Date 04-02-2010
Date Of Final Hearing 03-02-2010
Next Hearing Date 03-02-2010
Assessment Year 2004-2005
Appeal Filed On 22-02-2008
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES J MUMBAI BEFORE SHRI R.S.SYAL AM AND SHRI N.V.VASUDEVAN JM ITA NO.1331/MUM/2008 : ASST.YEAR 2004-2005 SHRI JAYANTILAL W.JAIN M/S.CELLO PLASTICS IND. WORKS VAKIL INDUSTRIAL ESTATE WALBHAT ROAD GOREGAON (WEST) MUMBAI 400 063. PA NO.AACPJ5705F. VS. THE INCOME TAX OFFICER WARD 24(3)(1) MUMBAI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI DHIREN K.RATHORE RESPONDENT BY : SHRI P.C.MAURYA O R D E R PER R.S.SYAL AM : THIS APPEAL BY THE ASSESSEE ARISES OUT OF THE ORDER PASSED BY THE CIT(A) ON 17.12.2007 IN RELATION TO THE ASSESSMENT YEAR 2004- 2005. 2. SECOND GROUND WAS NOT PRESSED BY THE LEARNED A.R . THE SAME THEREFORE STANDS DISMISSED. 3. THE ONLY GROUND WHICH SURVIVES FOR OUR CONSIDERA TION IS AGAINST THE ACTION OF THE LEARNED CIT(A) IN HOLDING THAT TWO FLATS IN ONE BUILDING BE CONSIDERED AS SEPARATE PROPERTIES AND ONLY ONE OF SUCH FLATS BE C ONSIDERED AS DEEMED TO BE LET OUT AT ESTIMATED ANNUAL RENT OF RS.72 000. BRIEFLY STAT ED THE FACTS OF THE CASE ARE THAT THE ASSESSEE HAD FOUR RESIDENTIAL PROPERTIES ONE AT VAPI TWO FLATS BEARING NOS. B- 212 AND B-311 IN MONA APARTMENT J.P.ROAD ANDHERI (WEST) AND ONE FLAT AT RUSTOMJEE ADARSH RESIDENCY IN WHICH HIS DAUGHTER-I N-LAW WAS STAYING FREE OF RENT. CONSIDERING THE PROVISIONS OF SECTION 23(4) T HE A.O. CONSIDERED ONE PROPERTY AS SELF-OCCUPIED PROPERTY AND THE ANNUAL VALUE WAS DETERMINED IN RESPECT OF THE REMAINING THREE PROPERTIES AS UNDER:- ITA NO.1331/MUM/2008 SHRI JAYANTILAL W.JAIN 2 SR. NO. NAME OF THE PROPERTY STATUS OF PROPERTY ESTIMATED MONTHLY RENT RECEIVABLE NOTIONAL INCOME 1. FLAT AT MOHID TOWER DLO RS.1 500 RS.18 000 2. FLAT AT B-212 SOP -- -- 3. FLAT AT B-311 DLO RS.6 000 RS.72 000 4. FLAT AT RUSTOMJEE ADARSH RESIDENCY DLO RS.4 000 RS.48 000 RS.1 38 000 4. RESULTANTLY INCOME FROM HOUSE PROPERTY W AS COMPUTED AT RS.96 600 AFTER ALLOWING DEDUCTION AT THE RATE OF 30% U/S.24(A) OF THE ACT. IN THE FIRST APPEAL IT WAS CONTENDED ON BEHALF OF THE ASSESSEE THAT FLAT NOS. 212 AND 311 WERE ON SECOND AND THIRD FLOORS RESPECTIVELY IN MONA APARTMENT AND HEN CE SHOULD BE CONSIDERED AS ONE PROPERTY ONLY. THE LEARNED CIT(A) DID NOT ACCEP T THIS CONTENTION AND UPHELD THE ASSESSMENT ORDER ON THIS POINT. 5. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. SECTION 23(2) PROVIDES THAT WHERE THE PROP ERTY CONSISTS OF A HOUSE WHICH IS IN THE OCCUPATION OF THE OWNER FOR THE PURPOSE OF H IS OWN RESIDENCE ETC THE ANNUAL VALUE OF SUCH HOUSE SHALL BE TAKEN TO BE NIL. SUB-S ECTION (4) OF SECTION 23 FURTHER PROVIDES THAT WHERE THE PROPERTY REFERRED TO IN SUB -SECTION (2) CONSISTS OF MORE THAN ONE HOUSE THE PROVISIONS OF THAT SUB-SECTION SHALL APPLY ONLY IN RESPECT OF ONE OF SUCH HOUSE WHICH THE ASSESSEE MAY AT HIS OPTION SPECIFY IN THIS BEHALF. FROM THE PRESCRIPTION OF SUB-SECTIONS (2) AND (4) OF SEC TION 23 IT BECOMES EVIDENT THAT ONLY ONE HOUSE IS CONSIDERED AS SELF-OCCUPIED PROPE RTY WHOSE ANNUAL VALUE IS NOT CONSIDERED FOR THE PURPOSES OF TAXATION UNDER THE H EAD `INCOME FROM HOUSE PROPERTY. IF THERE ARE MORE THAN ONE HOUSE THEN O NE OF THE ASSESSEES CHOICE IS CONSIDERED AS SELF-OCCUPIED PROPERTY AND THE ANNUAL VALUE OF THE REMAINING IS INCLUDED UNDER THIS HEAD. THE LEARNED A.R. CONTENDE D THAT THE PROVISIONS OF SECTION 5(1)(IV) OF THE WEALTH-TAX ACT ALSO USE THE WORD H OUSE AND THE INTERPRETATION ITA NO.1331/MUM/2008 SHRI JAYANTILAL W.JAIN 3 GIVEN TO THE WORD HOUSE IN THAT ACT BE APPLIED T O THE PRESENT SITUATION ALSO. HE RELIED ON THE JUDGMENT IN THE CASE OF CWT VS. MRS.NAJIMA NIZAR [(1992) 197 ITR 258 (KER.)] AND THE TRIBUNAL ORDER IN THE CASE OF 4 TH ITO VS. M.B.PATEL [(1987) 28 TTJ (BOM.) 209] IN WHICH IT HAS BEEN HELD THAT THE WORD HOUSE SH OULD NOT BE CONSIDERED AS SINGLE RESIDENTIAL UNIT. BEFORE JUMPI NG TO THE CONCLUSION AS TO WHETHER A PARTICULAR JUDGMENT APPLIES TO A FACT SIT UATION IT IS REQUIRED TO PROPERLY APPRECIATE THE FACTS OF THAT PARTICULAR CASE UNDER CONSIDERATION AND ONLY THEN A DECISION CAN BE TAKEN AS REGARDS ITS APPLICATION. E XEMPTION OF SELF-OCCUPIED PROPERTY IS AVAILABLE ONLY IN RESPECT OF HOUSE. IN ORDER TO CONSIDER WHETHER THERE IS ONE HOUSE OR DIFFERENT HOUSES THE DECISIVE TEST IS THE UNITY OF STRUCTURE. A HOUSE MAY CONSIST OF MORE THAN ONE SELF CONTAINED DWELLIN G UNITS BUT IF THERE IS UNITY OF STRUCTURE IT WILL BE CONSIDERED AS ONE HOUSE. THE M ERE FACT THAT DIFFERENT MEMBERS LIVE IN DIFFERENT SELF-CONTAINED PORTIONS IN THAT HOUSE WILL NOT CONVERT THAT HOUSE INTO MANY HOUSES. IF HOWEVER THE UNITY OF STRUCTURE IS LACKING THE POSITION WILL BE DIFFERENT. HERE IS A CASE IN WHICH MONA APARTMENT H AS SEVERAL FLATS. THE ASSESSEE WAS OCCUPYING ONE FLAT AT SECOND FLOOR AND OTHER FL AT AT THE THIRD FLOOR. BOTH THE HOUSES ARE SITUATED AT DIFFERENT FLOORS WITHOUT HAV ING ANY PHYSICAL CONNECTION WITH EACH OTHER. THEY DID NOT HAVE COMMON ENTRANCE. RATH ER THERE WAS NO FEATURE WHICH COULD UNITE THEM TO FORM ONE DWELLING UNIT. SIMPLY BECAUSE THESE TWO FLATS ARE ON DIFFERENT FLOORS OF THE SAME BUILDING WOULD NOT BECOME ONE HOUSE. IF THE CONTENTION OF THE LEARNED A.R. IS BROUGHT TO A LOGI CAL CONCLUSION THEN THE ENTIRE BUILDING COMPRISING OF HUNDREDS OF FLATS OCCUPIED BY DIFFERENT PERSONS WILL BECOME ONE HOUSE. IN OUR CONSIDERED OPINION THIS G ROUND DESERVES TO FAIL FOR LACK OF UNITY OF STRUCTURE BETWEEN THE TWO FLATS AT DIFF ERENT FLOORS. 6. THE CASE LAW RELIED BY THE LEARNED A. R. ARE PRIMARILY IN THE CONTEXT OF WEALTH-TAX ACT AND CAN HAVE NO APPLICATION UNDER AN ALTOGETHER DIFFERENT ENACTMENT. FURTHER IT IS NOTED THAT THE SPECIAL BEN CH OF THE TRIBUNAL IN ITO VS. MS. SUSHILA M. JHAVERI [(2007) 107 ITD 321 (MUM.) (SB)] CONSIDERED THE ITA NO.1331/MUM/2008 SHRI JAYANTILAL W.JAIN 4 PROVISIONS OF SECTIONS 54 AND 54F IN WHICH THE ASSE SSEE HAD INVESTED THE AMOUNT OF CAPITAL GAIN IN TWO RESIDENTIAL HOUSES SITUATED IN DIFFERENT LOCALITY OF THE SAME CITY. THE TRIBUNAL HELD THAT THE ASSESSEE WAS ENTITLED TO EXEMPTION U/S.54 / 54F IN RESPECT OF INVESTMENT IN ONE HOUSE ONLY AND NOT IN BOTH THE HOUSES. SINCE BOTH THE FLATS ARE SEPARATE AND DISTINCT FROM EACH OTHER HAV ING NO UNIT OF STRUCTURE WE ARE OF THE CONSIDERED VIEW THAT THE LD. CIT(A) WAS JUSTIFI ED IN HIS CONCLUSION. 7. IN THE RESULT THE APPEAL IS DISMISSED. ORDER PRONOUNCED ON THIS 4 TH DAY OF FEBRUARY 2010. SD/- SD/- (N.V.VASUDEVAN) ( R.S.SYAL ) JUDICIAL MEMBER ACCOUNTANT ME MBER MUMBAI : 4 TH FEBRUARY 2010. DEVDAS* COPY TO : 1. THE APPELLANT. 2. THE RESPONDENT. 3. THE CIT CONCERNED 4. THE CIT(A)-XXIV MUMBAI. 5. THE DR/ITAT MUMBAI. 6. GUARD FILE. TRUE COPY. BY ORDER ASSISTANT REGISTRAR ITAT MUMBAI. ITA NO.1331/MUM/2008 SHRI JAYANTILAL W.JAIN 5 DATE INITIAL 1. DRAFT DICTATED ON 0 3 .02.2010 SR.PS 2. DRAFT PLACED BEFORE AUTHOR 0 3 .02.2010 SR.PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS SR.PS/PS 6. KEPT FOR PRONOUNCEMENT ON SR.PS 7. FILE SENT TO THE BENCH CLERK SR.PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 9. DATE OF DISPATCH OF ORDER.