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TMI Blog2012 (2) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... ving adequate opportunity of hearing to the assessee and without cross examination; 3. That having regard to the facts and circumstances of the case, ld. CIT (Appeals) has erred in law and on facts in not reversing the action of the ld. AO in charging interest under section 234-B of the Income Tax Act, 1961. 4. That the appellant craves leave to add, modify, amend or delete any of the grounds of appeal at the time of hearing and all the above grounds are without prejudice to each other." 2. Adverting first to ground nos. 1 & 2 in the appeal, facts, in brief, as per relevant orders are that return declaring income of Rs. 31,68,280/- filed on 31st July, 2007 by the assessee, after being processed u/s 143(1) of the Income Tax Act, 1961 [hereinafter referred to as the Act] was selected for scrutiny with the service of a notice under section 143(2) of the Act. During the course of assessment proceedings, the Assessing Officer [AO in short] noticed that the assessee was in occupation of the following three properties :- 1. Palam Vihar, Gurgaon; 2. Greater Kailash Enclave, New Delhi; & 3. B-1/6, Malviya Nagar, New Delhi. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ears as the house belonged to his father and the assessee was originally staying there. 2. That the assessee was, during the year, actually and factually residing at the GK Enclave-I house. This is corroborated by copies of his bank statements for the year under review which bear his GK Enclave-I address, and which are part of the assessment record. 3. That the Inspector's report was obtained behind the back of the assessee and the assessee was never confronted with the same. This is against the principles of natural justice as the assessee was not given the opportunity to study and rebut the evidence relied upon by the ld. A.O. The AO while making an assessment u/s 143(3), is required to afford reasonable opportunity of being heard on such material gathered without knowledge of the assessee or at the back of the assessee. Since this was not done, the assessment is bad in law and the addition deserves to be deleted. The assessee seeks to rely upon the following: ♦ Kishinchand Chellaram v. CIT, 125 ITR 713 (SC) ♦ Smt. P. Narasamma v. ITO, 93 ITD 71 (Hyd.) 4. That notwithstanding and without prejudice t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s from the end of the previous year under review. In view of our submission on 11.01.2011 and the above information it is prayed that the addition made by the AO be deleted." 4. In the light of aforesaid submissions the ld. CIT(A) concluded as under: "2.2 I have considered the submissions made by the authorized representative of the appellant company. When an individual assessee files his/her return, wherein his address is declared, the presumption is that the address shown in the return of income is the residential address of the assessee. Therefore, I am in agreement with the A.O. that the Malviya Nagar address given in the appellant's return of income must be his residential address. The appellant cannot take a different stand than the one taken by him filing his return and show his residential address to be in Greater Kailash-I, The demand raised by the BSES in respect of the house in G.K.-I in the name of the appellant does not in any way prove that the appellant was staying there because even if a tenant is staying at some premises, the electricity bill is raised in the name of the owner. Similarly, the G.K.-I, address of the appellant shown in his bank statement could pos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . [1997] 140 CTR (Cal.) 569/[1994] 75 Taxman 193 and Mrs. Sheila Kaushish v. CIT [1981] 131 ITR 435/7 Taxman 1 (SC). On the other hand, the ld. DR while supporting the order of the AO submitted that since the assessee himself mentioned address of the Malviya Nagar in his return of income, the said property alone could be treated as self-occupied property in terms of provisions of section 23(4) of the Act. To a query by the Bench, the ld. AR submitted that the matter requires re-adjudication at the level of the AO since complete facts were not available before the AO at the time of completion of assessment. The ld. DR did not oppose this reply of the ld. AR. 6. We have heard both the parties and gone through the facts of the case. The only dispute before us is as to which one of the three properties of the assessee can be considered as self-occupied property.. At the outset, we may have a look at the relevant provisions of section 23 of the Act, which read as follows :- "23.Annual value how determined. (1) For the purposes of section 22, the annual value of any property shall be deemed to be- (a) the sum for which the property might reasonably be expected to le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch house or houses had been let." 6.1 What is chargeable in terms of provisions of sec. 22 of the Act is annual value. Annual value is deemed in terms of provisions of sec.23 of the Act. In terms of clause (a) of section 23(1) of the Act, ALV has to be determined on the basis of sum for which property might be reasonably expected to let from year to year. In the case of Satya Co. Ltd. (supra), a Division Bench of the Hon'ble Calcutta High Court held that when the annual value is decided under s. 23(1)(a) of the Act with reference to the fair rent, then the said fair rent takes into consideration everything. In terms of the aforesaid provisions of s. 23(4) of the Act, the assessee has been given the option to choose one of the properties as self-occupied and in this case, the assessee chose Greater Kailash Enclave-I property as self-occupied while the AO observed that address of Malviya Nagar property having been given in the return, the assessee had already exercised the option provided in s. 23(4) of the Act. The ld. CIT(A) concurred with the AO, ignoring the plea of the assessee that address of Greater Kailash property was mentioned in the bank as also in the electricity bills. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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