DCIT, CC-XXVII, Kolkata, Kolkata v. Radheshyam Saraf (HUF), Kolkata

ITA 295/KOL/2010 | 2001-2002
Pronouncement Date: 29-11-2011

Appeal Details

RSA Number 29523514 RSA 2010
Assessee PAN AADHR2616A
Bench Kolkata
Appeal Number ITA 295/KOL/2010
Duration Of Justice 1 year(s) 9 month(s) 17 day(s)
Appellant DCIT, CC-XXVII, Kolkata, Kolkata
Respondent Radheshyam Saraf (HUF), Kolkata
Appeal Type Income Tax Appeal
Pronouncement Date 29-11-2011
Appeal Filed By Department
Bench Allotted B
Tribunal Order Date 29-11-2011
Assessment Year 2001-2002
Appeal Filed On 11-02-2010
Judgment Text
IN THE INCOME TAX APPELLATE TRIBUNAL BEN CH B KOLKATA [ () ! . .. .#$ #$#$ #$. .. . %& ] ]] ] [BEFORE SRI N.VIJAYAKUMARAN JM & SRI C. D. RA O AM] !( / I.T.A NO. 295 295 295 295 /(KOL) OF 2010 - .// ASSESSMENT YEAR : 200 1-02 D.C.I.T. CENTRAL CIRCLE-XXVII - - RADHESHYAM SARAF (HUF) KOLKATA -VERSUS- KOLKATA (PAN:AADHR 2616 A) (45 / APPELLANT ) ( 6745 /RESPONDENT) !( / I.T.A NO.130/(KOL) OF 2010 - .// ASSESSMENT YEAR : 200 1-02 RADHESHYAM SARAF (HUF) - - D.C.I.T. CENTRAL CIRCLE-XXVII KOLKATA -VERSUS- KOLKATA (PAN:AADHR 2616 A) (45 / APPELLANT ) ( 6745 /RESPONDENT) 45 8 9 %/ FOR THE APPELLANT: SHRI R.SALARPURIA 6745 8 9 %/ FOR THE RESPONDENT: SHRI R.N.SAHA : 8 $& /DATE OF HEARING : 25.11.2011. ;. 8 $& /DATE OF PRONOUNCEMENT : 29.11.2011. %< / ORDER ( (( ( . .. .#$ #$#$ #$. .. . ) )) ) %& PER SHRI C.D.RAO AM THE ABOVE CROSS APPEALS ONE FILED BY THE REVENUE A ND ANOTHER FILED BY ASSESSEE ARE DIRECTED AGAINST ORDER OF LD. C.I.T.(A)-CENTRAL -II KOLKATA DATED 18.11.2009 PERTAINING TO ASSESSMENT YEAR 2001-02. 2 . ITA NO.295/KOL/2010 (BY THE REVENUE): IN THIS APPEAL THE REVENUE HAS TAKEN THE FOLLOWING GROUNDS :- 1. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF T HE CASE THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN DELETING THE ADDITION OF RS.7 10 574/-) 2 2 BEING THE ENHANCED ANNUAL VALUE OF THE PROPERTY AT 21/1 J.M. AVENUE KOLKATA- 06 WITHOUT APPRECIATING THAT AO ESTIMATED THE INCOM E FROM HOUSE PROPERTY @ RS.17 476/- PER MONTH PER FLOOR FOR THE VACANT PORT ION OF THE BUILDING OWNED BY THE ASSESSEE HUF ON THE BASIS OF RENT RECEIVED FOR FIRST FLOOR OF THE SAME PROPERTY @ RS.17 476.17 PER MONTH. 2. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IN ALLOWING THE VACANCY ALLOWANCE OF 64% OF THE ALV OF THE PROPERTY WITHOUT APPRECIATING THE FA CTS WHICH WAS NEITHER CLAIMED IN THE RETURN OF INCOME FILED U/S 139(1) NO R CLAIMED IN THE RETURN OF INCOME FILED U/S 153C OF THE I.T.ACT. 3. THAT ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE THE LD. CIT(A) HAS ERRED IN LAW AND FACTS OF THE CASE IS DELETING THE DISALLOWANCE MADE U/S.14A WITHOUT APPRECIATING THE INTENTION OF THE PROVISION OF SECTION 14A OF THE I.T. ACT. 4. THAT THE DEPARTMENT CRAVES LEAVE TO ADD MODIFY OR ALTER ANY OF THE GROUND(S) OF APPEAL AND / OR ADDUCE ADDITIONAL EVID ENCE AT THE TIME OF HEARING OF THE CASE. ITA NO.130/KOL/2010 (BY THE ASSESSEE): IN THIS APPEAL THE ASSESSEE HAS TAKEN THE FOLLOWING GROUNDS :- 1. FOR THAT THE LD.CIT(A) ERRED IN DETERMINING TH E ANNUAL VALUE OF THE PROPERTY AT RS.24 85 388/- AS AGAINST THE ASSESSED ANNUAL VA LUE OF RS.14 67 998/- BY THE A.O. THUS THE ACTION OF THE CIT(A) IS WHOLLY UNJUS TIFIED ILLEGAL AND BAD IN LAW. EVEN OTHERWISE THE ADDITION MADE WAS HIGHLY EXCESSI VE AND WHOLLY UNREASONABLE. 2. FOR THAT YOUR PETITIONER CRAVES THE RIGHT TO PU T ADDITIONAL GROUNDS AND/OR TO ALTER/AMEND/MODIFY THE PRESENT GROUNDS AT THE TIME OF HEARING. 3. THE FACTS RELATING TO GROUND NOS. 1 AND 2 OF THE REVENUE AND THE ONLY GROUND RAISED BY ASSESSEE ARE IN RESPECT OF DETERMINATION OF ANNUAL VALUE OF THE PROPERTY. 4. THE BRIEF FACTS OF THIS ISSUE ARE THAT WHILE DO ING 153C/143(3) ASSESSMENT THE ASSESSING OFFICER HAS VALUED THE ANNUAL VALUE OF TH E PROPERTY AT 21/1 J.M.AVENUE KOLKATA-06 AT RS.14 67 998/- BY OBSERVING THAT IN COURSE OF ASSESSMENT IT WAS OBSERVED THAT THE A SSESSEE HAS A HOUSE PROPERTY LOCATED AT 21/1 JATINDRA MOHAN AVENUE KOLKATA-700 006 WHICH CONSISTS OF GROUND PLUS SIX FLOORS. THE ASSESSEE CLAIMED THAT RS. 1 02 000/- BEING RENT RECEIVED FROM THE SAID BUILDING DURING THE RELEVANT FINANCIAL YEAR. I T TRANSPIRES FROM THE ASSESSMENT RECORDS FOR THE ASSESSMENT YEAR 2003-04 THAT THE AS SESSEE CLAIMED THE GROUND FLOOR GIVEN ON RENT AT THE RATE OF RS.5000/- PER MONTH TO CALCUTTA AUTO WORKS LIMITED FIRST FLOOR GIVEN ON RENT AT THE RATE OF RS 17 476.17 PE R MONTH TO CENTRAL BANK OF INDIA 3 3 50% OF SECOND FLOOR CLAIMED AS SELF RESIDENTIAL PUR POSE AND THE BALANCE 50% OF THE SECOND FLOOR CLAIMED FOR ASSESSEES BUSINESS PURPOS E. REMAINING THIRD FOURTH FIFTH AND SIXTH FLOORS ARE STATED TO HAVE BEEN USED FOR O WN RESIDENTIAL PURPOSES. IT WAS ALSO OBSERVED AT THE TIME OF ASSESSMENT U/S. 143(3) FOR THE ASSESSMENT YEAR 2003-04 THAT NONE OF THE MEMBER OF H.U.F. NEIT HER RESIDING IN KOLKATA NOR ASSESSED TO TAX IN KOLKATA RELIEF U/S.23(3) OF THE I.T. ACT 1961 IS ONLY AVAILABLE TO AN INDIVIDUAL AND NOT TO AN H.U.F. SO THE ASSESSEES C LAIM THAT SECOND THIRD FOURTH FIFTH AND SIXTH FLOORS WERE USED FOR OWN RESIDENTIAL PURP OSES WAS DENIED. IT WAS ALSO FOUND FROM THE RELEVANT IT RETURN P & L A/C AND BALANCE SHEET FOR THE ASSESSMENT YEAR 2003-04 THAT THE ASSESSEE HAD NO BUSINESS AND NO BU SINESS INCOME HAD ALSO BEEN SHOWN SO THE ASSESSEES CLAIM THAT 50% OF THE 2ND F LOOR USED AS SELF BUSINESS PURPOSE WAS DENIED SINCE IT WAS NOT BASED ON THE PROPER FAC TS. SINCE THE FIRST FLOOR OF THE SAID BUILDING WAS RECEIVING THE RENT @ RS. 17 476/- P.M. SO THE RENT CLAIMED FOR THE GROUND FLOOR AT RS.5 000/- P.M. WAS NOT THE ACTUAL FARE RE NT OF THE GROUND FLOOR. CONSIDERING THE ABOVE FACTS THE ASSESSMENT WAS COMPLETED U/S. 143(3) ON 24.03.2006 BY TREATING THE ANNUAL VALUE OF THE SAID PROPERTY (GROUND PLUS SIX FLOORS) AT RS.14 67 998/- ON THE BASIS OF THE RENT OF RS.17 476.17 OF THE FIRST FLOO R AT RS.14 67 998/- I E. (RS.17 476.17 X 7 X 12) IN THE RELEVANT ASSESSMENT YEAR 2001-02 THE A/R ST ATED THE SAME AS IT WAS STATED AT THE TIME OF ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04. HOWEVER THE A.R. OF THE ASSESSEE WAS GIVEN OPPORTUNITY TO SUBMIT HIS EXPLANATION AND EVIDENCE AFRESH AGAINST THE OBSERVATION AS TAKEN AT THE TIME OF ORI GINAL ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04. THE A.R. SUBMITTED WRITTEN EXPLANATIO N WHICH IS REPRODUCED AS UNDER:- DURING THE COURSE OF HEARING YOUR HONOUR HAS INFOR MED US THAT ASSESSMENT FOR THE ASSESSMENT YEAR 2003-04 WAS COMPLETED U/S. 143(3) A ND IN THE SAID ASSESSMENT ORDER THE AO HAD DETERMINED THE ANNUAL VALUE OF THE PROPE RTY AT 21/1 JATINDRA MOHAN AVENUE KOLKATA-700 006 AT RS.209714/- X 7 / GROUND FLOOR + 6 FLOOR] IS RS. 14 67 998/- AND ASKED FOR THE EXPLANATION THAT WHY ANNUAL VALUE SHOULD NOT BE CONSIDERED AT THE SAME AS IT WAS TAKEN IN THE ASSES SMENT YEAR 2003-04. IN THIS REGARD WE WOULD LIKE TO SUBMIT THAT THE ADD ITION WHICH WAS MADE BY THE AO IN THE ASSESSMENT YEAR 2003-04 REGARDING ANNUAL VALUE OF AT 21/1 JATINDRA MOHAN AVENUE KOLKATA-700 006 IS DELETED BY THE HON BLE CIT(A) XXIV VIDE HIS ORDER DATED 20.9.2007 [PHOTOCOPY OF THE SAME ENCLOS ED IS HEREWITH FOR YOUR READY REFERENCE]. SECONDLY ... . IN VIEW OF THE ABOVE YOUR HONOUR IS REQUESTED TO D O NOT MAKE THE SIMILAR ADDITION WHICH WERE ALREADY BEEN DECIDED IN FAVOUR OF US BY THE APPELLATE AUTHORITY. HOPE THE ABOVE INFORMATION WILL SUFFICE THE PURPOSE . SINCE THE A/R COULD NOT PUT FORWARD ANY NEW EVIDEN CE OR ARGUMENT AGAINST THE ABOVE OBSERVATION SO I AM OF THE SAME OPINION AS CONSIDE RED AT THE TIME OF ORIGINAL ASSESSMENT U/S. 143(3) FOR THE ASSESSMENT YEAR 2003 -04 AND ACCORDINGLY THE ANNUAL VALUE OF THE SAID PROPERTY IS CONSIDERED AT RS. 14 67 998/- FOR THE FINANCIAL YEAR RELEVANT TO THE ASSESSMENT YEAR 2001-02 FOR THE PUR POSE OF HOUSE PROPERTY INCOME. 4.1. ON APPEAL THE LD. CIT(A) HAS VALUED THE ANNUAL LETTING VALUE OF THE PROPERTY AT RS.25 47 720/- AND FURTHER REDUCED THE SAME BY MUNI CIPAL TAXES 25% OF THE ANNUAL 4 4 REPAIRS U/S 24(1)(I) AND 64% OF THE ANNUAL VALUE FO R VACANCY ALLOWANCE AND ULTIMATELY DECIDED THAT THE INCOME FROM HOUSE PROPERTY AT RS.2 73 393/- WAS DETERMINED. 4.2. AGGRIEVED BY THIS NOW THE REVENUE AS WELL AS A SSESSEE ARE IN APPEAL BEFORE US. 5. AT THE TIME OF HEARING THE LD. COUNSEL APPEARIN G ON BEHALF OF ASSESSEE HAS SUBMITTED THAT IN ORDER TO ASCERTAIN THE ANNUAL LET TING VALUE OF THE PROPERTY THIS TRIBUNAL IN ASSESSEES OWN CASE FOR A.YR. 2003-04 I N ITA NO.266/KOL/2008 RESTORED THE MATTER TO THE FILE OF AO TO RECOMPUTE THE VALUE OF THE VACANT PORTION IN ACCORDANCE WITH ONLY RENTAL VALUE AS CERTIFIED BY THE CALCUTTA MUNICIPAL CORPORATION. THEREFORE HE REQUESTED TO SET ASIDE THE APPEAL SINCE THE LD. CIT (A) HAS TAKEN THE BASIS FOR COMPUTATION OF THE ANNUAL LETTING VALUE BASED ON TH E FACTS IN A.YR. 2003-04. 6. ON THE OTHER HAND THE LD. DR APPEARING ON BEHAL F OF THE REVENUE HAS HEAVILY RELIED ON THE ORDERS OF THE LD. CIT(A) IN VALUING THE LETTING VALUE AT RS.25 47 720/- BASED ON THE DECISION OF THE HONBLE CALCUTTA HIGH COURT. THEREFORE HE REQUESTED TO UPHELD THE SAME. 7. AFTER HEARING THE RIVAL SUBMISSIONS AND ON CAREF UL PERUSAL OF MATERIALS AVAILABLE ON RECORD THE BASIS ON WHICH THE LD. CIT(A) HAS AR RIVED AT THE ANNUAL LETTING OUT VALUE IS ON THE MAIN PROPERTY FOR ILLEGAL OCCUPATION OF T HE TENANT OF THE ASSESEE HAS BEEN FIXED WHICH IN OUR CONSIDERED OPINION CANNOT BE TA KEN AS ANNUAL LETTING OUT VALUE. HOWEVER SINCE THIS TRIBUNAL IN A.YR.2003-04 HAS AL READY ISSUED THE DIRECTION TO RECOMPUTE THE ANNUAL LETTING VALUE OF THE VACANT PO RTION PROPORTIONATELY IN ACCORDANCE WITH ANNUAL RENTAL VALUE AS CERTIFIED BY THE KOLKAT A MUNICIPAL CORPORATION IN RESPECT OF VACANT PORTION OF THE PROPERTY RESPECTFULLY FOLL OWING THE SAME WE SET ASIDE THIS MATTER TO THE FILE OF AO WITH SIMILAR DIRECTIONS. 8. IN THE RESULT GROUND NOS.1 AND 2 RAISED BY THE R EVENUE AND GROUND NO.1 RAISED BY THE ASSESSEE ARE ALLOWED FOR STATISTICAL PURPOSE S. 5 5 9. AS REGARDING GROUND NO.3 WHICH IS RELATING TO TH E DISALLOWANCE U/S 14A OF THE IT ACT THIS TRIBUNAL HAS CONSISTENTLY FOLLOWING THE PRACTICE THAT WHEN THE MAIN BUSINESS OF ASSESSEE IS NOT RELATED TO THE DEALING IN SHARES THE DISALLOWANCE TO BE MADE U/S 14A OF THE ACT IS LIMITED TO 1% OF THE DIVIDEND INCOME OF ASSESSEE. SINCE IN THIS CASE THE LD. CIT(A) HAS DELETED THE ENTIRE AMOUNT D ISALLOWED BY AO WE RESTRICT THE DISALLOWANCE TO 1% OF THE DIVIDEND INCOME OF THE AS SESSEE IN THIS APPEAL. 10. IN THE RESULT GROUND NO.3 RAISED BY THE REVENUE IS ALLOWED IN PART. 11. IN THE RESULT THE APPEAL OF THE REVENUE IS PAR TLY ALLOWED FOR STATISTICAL PURPOSES AND THE APPEAL OF ASSESSEE IS ALLOWED FOR STATISTIC AL PURPOSES. %< = > ?@ $& _____________ ORDER PRONOUNCED IN THE COURT ON 29.11.2011. SD/- SD/- N.VIJAYAKUMARAN JUDICIAL MEMBER . .. .#$ #$#$ #$. .. . %& %& %& %& C.D.RAO ACCOUNTANT MEMBER. ( (( ($& $& $& $&) )) ) DATE: 29.11.2011. %< 8 6 A%.B- COPY OF THE ORDER FORWARDED TO: 1. 6745 /RESPONDENT RADHESHYAM SARAF (HUF) 21/1 J.M.AVENU E KOLKATA-700006. 2 45 / APPELLANT : D.C.I.T. CENTRAL CIRCLE-XXVII KOLKATA 3. < /CIT <() /CIT(A)-CENTRAL-II KOLKATA 5. DR KOLKATA BENCHES KOLKATA 7 6 / TRUE COPY %