Mukesh Chand Jain, v. ITO, New Delhi

ITA 24/DEL/2009 | 2004-2005
Pronouncement Date: 22-01-2010 | Result: Allowed

Appeal Details

RSA Number 2420114 RSA 2009
Bench Delhi
Appeal Number ITA 24/DEL/2009
Duration Of Justice 1 year(s) 15 day(s)
Appellant Mukesh Chand Jain,
Respondent ITO, New Delhi
Appeal Type Income Tax Appeal
Pronouncement Date 22-01-2010
Appeal Filed By Assessee
Order Result Allowed
Bench Allotted E
Tribunal Order Date 22-01-2010
Date Of Final Hearing 20-01-2010
Next Hearing Date 20-01-2010
Assessment Year 2004-2005
Appeal Filed On 06-01-2009
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH `E : NEW DELHI BEFORE SHRI C.L. SETHI JUDICIAL MEMBER AND SHRI B.P. JAIN ACCOUNTANT MEMBER I.T.A. NO.24/DEL/2009 ASSESSMENT YEAR : 2004-05 MUKESH CHAND JAIN INCOME-TAX OFFICER 12-A PALIKA BAZAR VS. WARD 31(3) NEW DELHI. CONNAUGHT PLACE NEW DELHI. (APPELLANT) (RESPONDENT) APPELLANT BY : SHRI RAJ KUMAR CA RESPONDENT BY : SHRI R.K. RAINI SR. DR. O R D E R PER B.P. JAIN ACCOUNTANT MEMBER THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME-TAX (APPEALS)-XXVI NEW DELH I DATED 28.07.2008 IN AN APPEAL AGAINST THE ASSESSMENT ORDER UNDER SEC TION 143(3) OF THE INCOME-TAX ACT 1961 (THE ACT). 2. GROUND NOS.1 2 & 3 ARE TO BE TAKEN TOGETHER AND THEY ARE AS UNDER:- 2 1. THAT UNDER THE FACTS AND CIRCUMSTANCES GALV OF HOUSE PROPERTY NO.20-C SCHOOL LANE BENGALI MARKET NEW DELHI SHOULD HAVE BEEN TAKEN AT NIL. 2. THAT GALV CANNOT BE FIXED UP ON THE BASIS OF INS PECTORS REPORT WHICH IS TOTALLY SILENT ON THE SOURCE AND BA SIS OF INFORMATION GIVEN IN HIS REPORT. 3. THAT WITHOUT PREJUDICE AND ALTERNATIVELY GALV S HOULD NOT EXCEED RS.25 633/-. 3. BRIEF FACTS OF THE CASE AS PER ASSESSING OFFICER S ORDER IN PARA 2.3 AND 2.4 ARE AS UNDER:- 2.3 THE ASSESSEE HAS SHOWN THE VALUE OF PROPERTY A T 20 SCHOOL LANE AT RS.25 200/- IN THE RETURN OF INCOME. HOWEVER WHEN THE ASSESSEE WAS INFORMED THAT THE VALUE WAS V ERY LESS AS SHOWN BY HIM & IT WAS PROPOSED THAT IT MAY BE TAKEN AT RS.30 000/- P.M. IT WAS SUBMITTED THAT THE ASSESSE E HAD ONLY 1/10 TH SHARE IN THIS PROPERTY. AT THE MOST THE VALUE OF PORTION BELONGING TO THE ASSESSEE MAY BE TAKEN AS PER MUNIC IPAL RATABLE VALUE WHICH WAS RS.76 900/-. AFTER THAT EN QUIRIES WERE GOT MADE THROUGH THE INSPECTOR OF THIS WARD W HO HAS AFTER MAKING LOCAL ENQUIRIES ESTIMATED THAT THE REN T WHICH COULD BE EXPECTED FROM THE PROPERTY WOULD NOT BE LESS THA N RS.20 000/- P.M. OF THE ASSESSEES SHARE. IT WAS A LSO REPORTED THAT THE ASSESSEE HAD 1/3 RD SHARE IN THE PROPERTY. THE COPY OF REPORT OF THE INSPECTOR WAS GIVEN TO THE ASSESSEE T O ELICIT HIS OBJECTIONS IF ANY U/S 142(3) SINCE INFORMATION WAS GATHERED ON THE BACK OF THE ASSESSEE AND IT WAS PROPOSED TO BE USED AGAINST HIM. THE A.R. OF THE ASSESSEE HAS STRONGLY OBJECTE D TO THE REPORT OF THE INSPECTOR SUBMITTING THAT THE VALUE A T WHICH IT COULD BE LET OUT WOULD NOT BE TO THE EXTENT OF RS.2 0 000/- P.M. AND PRAYED THAT THE 1/3 RD OF THE RATABLE VALUE MAY BE TAKEN AT RS.25 633/- THE SHARE OF THE ASSESSEE. IT WAS INS ISTED THAT THE ASSESSEE DOES NOT RESIDE IN SCHOOL LANE. 2.4 IN THIS REGARD IT MAY BE RELEVANT TO PERUSE TH E PROVISIONS CONTAINED IN SECTION 23(4) READ WITH SECTION 23(1) OF THE INCOME 3 TAX ACT. THE PROVISIONS OF SECTION 23(4) VERY CLEA RLY MANDATE THAT PROPERTY OTHER THAN THE ONE OCCUPIED BY THE ASSESSEE FOR SELF RESIDENCE BE DEEMED AS IF LET OUT. THE ALV O F THE LET OUT PROPERTY IS TO BE COMPUTED U/S 23(1) OF THE INCOME TAX ACT WHICH SAYS THAT THE VALUE IT IS EXPECTED TO LET OUT FROM YEAR TO YEAR. THE PROPERTY AT SCHOOL LANE BENGALI MARKET NEW DELHI WHICH IS A PRIME LOCALITY WOULD FETCH AT LEAST A MO NTHLY RENT OF RS.20 000/- BEING ASSESSEES 1/3 RD SHARE. THIS VALUE WOULD BE TREATED AS INCOME OF THE ASSESSEE UNDER THE HEAD `H OUSE PROPERTY. 4. BEFORE THE LEARNED CIT(A) THE ASSESSEE SUBMITTED THAT THE ALV SHOULD HAVE BEEN TAKEN AT `NIL. THE SAID SUBMISS IONS WERE FORWARDED VIDE LETTER DATED 15.06.07 FOR COMMENTS/REMAND REPORT FR OM THE A.O. NO REPLY BY THE A.O. WAS RECEIVED TILL PASSING THE ORDER BY THE LEARNED CIT(A). THE LEARNED CIT(A) THEREFORE CONFIRMED THE ACTION OF T HE A.O. 5. WE HAVE HEARD THE PARTIES AND PERUSED THE FACTS OF THE CASE. AS PER SECTION 23(1) READ WITH SECTION 23(4) IF THE PROPER TY OF THE ASSESSEE CONSISTS OF MORE THAN ONE HOUSE THE ANNUAL VALUE OF PROPERT Y AT THE OPTION OF THE ASSESSEE SHALL BE DETERMINED AS PER THE SAID SECTIO NS. IN THE PRESENT CASE THE ASSESSEE HAS SUBMITTED THAT THE HOUSE IS NOT INHABI TABLE AND THEREFORE THE ANNUAL LETTING VALUE SHOULD BE TAKEN AT `NIL. THE INSPECTOR HAS SUBMITTED A REPORT THAT AN ANNUAL LETTING VALUE IS RS.2 40 000/ - AND THE OBJECTIONS OF THE ASSESSEE HAVE BEEN REJECTED. THERE IS NOTHING ON R ECORD TO SHOW THAT THE ASSESSEE HAS SUBMITTED THE DIFFERENT ANNUAL LETTING VALUE WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO FETCH DURING THE YE AR. THE LEARNED COUNSEL 4 FOR THE ASSESSEE SHRI RAJ KUMAR HAS POINTED OUT AT PAGE 17 THE RATABLE VALUE AT RS.76 900/- WHICH SHOULD BE TAKEN AS THE ALV FOR THE PURPOSE. THE ARGUMENTS MADE BY THE LEARNED COUNSEL FOR THE ASSES SEE ARE NOT FOUND CONVINCING. IN VIEW OF THE DELHI SPECIAL BENCH DEC ISION IN THE CASE OF ACIT VS. MAYUR RECREATIONAL & DEVELOPMENT LTD. (FOR MERLY KNOWN AS DLF HOTELS LTD.) REPORTED IN (2008) 301 ITR (AT) 32 4 THE ALV HAS TO BE DETERMINED HIGHEST OF THE FOLLOWING 3 SUMS:- (I) MUNICIPAL VALUATION. (II) THE FAIR RENT DETERMINED BY THE RENT CONTROL ACT. (III) THE ACTUAL RENT RECEIVED BY THE OWNER. THE MUNICIPAL VALUATION IS ON RECORD AT PB 17 WHICH WAS PLACED BEFORE THE AUTHORITIES BELOW AS WELL BUT FAIR RENT DETERMINED BY THE RENT CONTROL ACT HAS NOT BEEN PLACED ON RECORD BY EITHER OF THE PART IES AND THE SAME HAS NOT BEEN CONSIDERED WHILE COMPUTING ANNUAL LETTING VALU E. THE PROPERTY IS STATED TO BE VACANT AND THEREFORE THERE IS NO RENT RECEIVED BY THE ASSESSEE. SINCE THE ALV CANNOT BE DETERMINED IN THE ABSENCE O F FAIR RENT DETERMINED BY THE RENT CONTROL ACT WHICH HAS TO BE EXAMINED B Y THE A.O. AND IT IS IN THE INTEREST OF JUSTICE THE MATTER IS RESTORED TO THE FILE OF THE AO WHO WILL EXAMINE THE ISSUE IN VIEW OF THE DELHI SPECIAL BENC H DECISION IN THE CASE OF MAYUR RECREATIONAL & DEVELOPMENT LTD. (SUPRA) AND D ECIDE THE ISSUE DE 5 NOVO. THUS GROUND NOS. 1 TO 3 OF THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSES. 6. IN THE RESULT THE APPEAL IS ALLOWED FOR STATIST ICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON 22 ND JANUARY 2010. SD/- SD/- (C.L. SETHI) (B.P. JAIN) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 22 ND JANUARY 2010. COPY OF THE ORDER FORWARDED TO:- 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR BY ORDER *MG DEPUTY REGISTRAR ITAT.