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TMI Blog2017 (10) TMI 1077X X X X Extracts X X X X X X X X Extracts X X X X ..... 9, Rohini Rs.1,44,000 (c) Shop No.467-468 Khari Bouli Rs.1,78,560 (d) Shop No.2, B Block LSC, Ashok Vihar Phase II Rs.2,23,200 (e) Shop No.3B, Block LSC, Ashok Vihar, Phase II Rs.2,23,200 (f) Shop No.404-407, Katra Medgran, Khari Bouli Rs.3,83,904 (g) B-2/22, Phase II, Ashok Vihar Rs.17,00,136 (h) Khasra 73/10/2, Village Mundka Rs.1,18,800 Total Rs.31,75,800 3. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts in law in confirming the above addition ignoring the provision of Section 23(1)(a) read with Section 23(4) of the Act. 4(i). That the above said addition has been confirmed ignoring the explanation and evidences submitted by the assessee that ALV worked out is unjustified and against the facts. (ii) Without prejudice to the above and in the alternative, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the annual rental value adopted by the AO is arbitrary and too high. 5. On the facts and circumstances of the case, the learned CIT(A) has erred both on facts and in law in rejecting the contention of the assessee that the learned AO has erred in not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok Vihar Phase-II Shop Vacant 223200 6 Shop No. 404-407, Katla Medgran, Khari Bouli Shop Assessee's Office 383904 7 B2/22 Ashok Vihar Phase-II Plot Under Construction 1700136 8 Khasra 73/10/2 Village Mundka Plot Vacant 118800 9 H-144, Ashok Vihar Phase-II, New Delhi House Residence 0 Total 3175800 3. The Learned CIT (Appeals) too has confirmed the said computation of income of house property and the determination of the ALV of the properties by the Assessing Officer. 4. Before us the Ld. Counsel, Mrs. Rano Jain, submitted that firstly, the Assessing Officer has not given any basis for calculating or determining the ALV of the properties; secondly, he has even calculated the ALV of the properties which were either under construction or were used for the assessee's office. At least, the Assessing Officer should have excluded the properties which were under construction and which were occupied by the assessee for his own business purposes. Regarding the determination of ALV for the vacant properties, she fairly admitted that the same should be determined, but it should be in accordance with the municipal ratable value as AO has not given ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hok Vihar Phase -II 100 Sq Ft (100 Sq Ft * Rs. 186/Sq Ft * 12 = 2.23,200 Shop No. 3 B Block LSC, Ashok Vihar Phase II 100 Sq Ft (100 Sq Ft* Rs. 186/Sq Ft* 12 = 2,23,200 Shop 404-407, Katra AMedgran, Khari Bouli (90 Sq Yard with FF.SF, therefore, and terrace rights) 172 Sq Ft (172 Sq Ft * Rs. 186/Sq Ft * 12) = 3,83,904/- B-2/22 Ashok Vihar Phase B (800 Sq Yards( Assessee's Share 41.67%) 4 stories with 948.14 Sq Mt Covered Area 41.67% of (5,000 Sq Ft* Rs. 17/Sq Ft * 4 Floors * 12) = 17,00,136/- ' Khasra 73/1072 Village Mundka Purchased on 6/10/1986 for Rs. 48,000 (Nagloi Godown) 1,08,000 (last year's rent) + 10% annual increase = 1,18,800/- Total Rs. 31,75,800/- 6. However, nowhere the Assessing Officer has given any basis for determination of fair market rent, that is, from which source or information he has arrived at the market rent. He has also not excluded the properties which were; firstly, under construction as mentioned in the earlier table; and secondly, one shop which was used by the assessee for his own office/business purpose. The FMV of the properties under construction and property/shop used by assessee for business purpose ad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s under:- Nature of expenses Amount (in Rs.) Rent for ground/lawn: 1,03,298.00 Fooding /Catering: 5,23,932.00 Tent: 3,30,900.00 Other miscellaneous expenses:- - by assessee:- - By assessee's daughter:- 1,00,000.00 2,70,000.00 Jewellery already owned by the appellant's daughter (shown in her balance sheet): 8,43,000.00 Total 21,71,130.00 The Learned CIT (Appeals) after taking a note of the aforesaid fact, confirmed the addition to the extent of Rs. 3,28,870/-, after giving relief the amount of Rs. 21,71,130/- declared by the assessee in the aforesaid manner. The relevant discussion of the Learned CIT (Appeals) in this regard reads as under:- "I do not find any rational in finding of the Assessing Officer wherein he has made a very casual attempt to make addition on this account. However, appellant has also failed to show the total expenditure on this account. I have gone through the details filed in this regard and has been analyzed by me wherein it has been stated that other family members has also contributed in this regard but specific details has not been filed that what are the expenses. It has been mentioned Miss Vidhi Gupta is assessee's daughter wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reak-up of expenditure incurred and the persons who have contributed for the marriage expenses including the jewellery which was shown in the balance sheet of the assessee's daughter, then there cannot be any presumption that the expenditure incurred was Rs. 25 lakhs as done by the Assessing Officer and Learned CIT(Appeals). Accordingly, such ad hoc estimate cannot be sustained. 10. On the other hand, the ld. DR strongly relied upon the order of the Learned CIT(Appeals). 11. After considering the rival submissions and on perusal of the impugned order as well as the matter referred to before us, we find that the Assessing Officer has simply made an estimate of Rs. 25 lakhs simply on the ground that the assessee comes from affluent family and has big stature. Before the Learned CIT (Appeals) the entire break up and source of expenditure has been given, which has been accepted by him at Rs. 21,71,130/-. Once that is so, then there was no point to presume that marriage expenditure would be Rs. 25 lakhs only and therefore, balance amount should be confirmed. There is no enquiry or material information on record to remotely suggest that marriage expenses shown must have been more. Such ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... but found to lack merit." 13. The Learned CIT (Appeals), however estimated the household expenditure at Rs. 1 lakh per month and after giving benefit of Rs. 7,59,723/- which was shown by the assessee, confirmed the balance amount at Rs. 4,40,277/-. 14. After hearing both the parties and on perusal of the relevant findings given in the impugned order, we find that both the authorities have resorted to estimate only. The assessee had stated that he is living in a joint family set up and the entire expenditure shown for the entire joint family was at Rs. 7,59,723/-. However the amount of house hold expenditure declared at Rs. 7,59,723/- appears to be on a lower side looking to the fact that over all family members in a joint family setup would be more. Thus, under the facts and circumstances of the case, addition of Rs. 3 lakhs over and above the sum of Rs. 7,59,723/- as disclosed by the assessee would be sufficient and reasonable. Accordingly, addition of Rs. 3,00,000 is sustained and the assessee gets a part relief on this score. 15. Lastly, with regard to the addition of Rs. 2,88,797/- the relevant findings of the Assessing Officer in this regard reads as under:- "In respect i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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