Feedback   New User   Login      
Tax Management India. Com TMI - Tax Management India. Com
Acts / Rules Notifications Circulars Tariff/ ITC HSN Forms Case Laws Manuals Short Notes Articles SMS News Highlights
        Home        
Extracts
Home List
← Previous Next →

ACIT 3 (2) (2) , Mumbai Versus M/s. Pradman Trading Company Pvt. Ltd.

2018 (1) TMI 285 - ITAT MUMBAI

Determination of ALV - invoking the provisions of section 23(1)(a) as against the ALV declared by the assessee u/s 23 (1) (b) - Held that:- As in the case of CIT vs. Tip Top Typography [2014 (8) TMI 1002 - BOMBAY HIGH COURT] expounded that though there cannot be a blanket rejection of the municipal valuation but the Assessing Officer can deviate from the same if he has cogent and reliable material. - In the present case, find that the premises under consideration is in posh locality in Cuff .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

is in accordance with Hon'ble jurisdictional High Court guidelines as above. Accordingly, set aside the order of the ld. Commissioner of Income Tax (Appeals) and restore the order of the Assessing Officer. - Decided in favour of revenue - I.T.A. No. 3350/Mum/2017 - Dated:- 1-1-2018 - SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER For The Appellant : Ms. N. Hemalatha For The Respondent : Shri Nitesh Joshi And Shri Saroj V. Maniar ORDER Per Shamim Yahya, A. M.: This appeal by the Revenue is directed against .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

.T. Act 1961. 2. Whether on the facts and circumstances of the case and in law, the Ld.CIT (A) has erred in relying on the decision in the case of ITO vs. Surge Enterprises Ltd. ITA No.5238/M/06, A.Y. 2003-04 while deleting the addition to the Income from House Property made by the AO without appreciating the fact that the facts of Surge Enterprises are distinguishable from the facts in the instant case. 3. Brief facts of the case are as under: During the course of assessment proceedings, the as .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e, the assessee was asked how and why the annual value adopted appeared to be on lower side considering the fair rent of the property. In response, vide letter dated 04.03.2015, the assessee made and from the contention the assessing officer observed that tax under the head 'Income from House Property is not a tax upon rent of property but on inherent capacity of a building to yield income. Hence, the standard selected measure annual value of property was to be adopted for this purpose. As p .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t from Maker Tower Co-operative Housing Society and leave & licence agreements had been obtained in respect of properties being Flat No.73-A, 223A and 93-A and other enquiries were also made in similar localities which revealed that comparable rents received/receivable of similar properties as under: Flat No. Location Area Rate per month Period of agreement Tenure of agreement 73-A Maker Tower A CHS Cuffe Parade 2100 sq.ft. 2,50,000 28/06/09 to 27/4/11 22 months 223-A Maker Tower A CHS Cuffe .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

to the assessee to explain as to why the Gross Annual Value of the property let out during the year should not be adopted at ₹ 51 lakhs (4,25,000 x 12) being rent received in respect of property no. 93-A Maker Tower A CHS Cuffe Parade, being similar property in same building in same wing. In reply, vide letter dated 23/03/2015 assessee had reiterated its submissions and justifications and had made further submissions, the assessing officer considered the submissions but found the same not .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

section 23(1) of the Act. 5. The assessee had also contended that the rateable value of the flat had been fixed at ₹ 5,10,690/- and as actual rent received was higher than municipal rateable value, the assessee had offered rental income actually received. It was the contention of the assessee that since in metros or big cities like Delhi, Mumbai, Chennai, Kolkata, municipal authorities determine net rateable value after deducting 10% of gross rateable value, and net municipal valuation th .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

t no.103-A to be similar to the rent being fetched in same property as mentioned above and was accordingly taken at ₹ 51 lakhs and the same was assessed as income under the head Income from House Property . 6. Upon the assessee s appeal, the ld. Commissioner of Income Tax (Appeals) remitted the issue to the file of the Assessing Officer directing to file the municipal value of the impugned property and delete the addition of notional annual value of ₹ 51 lacs. The ld. Commissioner of .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

courts including jurisdictional courts. Consistently and uniformly various courts have held that municipal rateable value has to be considered as deemed annual value for the purpose of clause (a) of section 23(1). This is amply clear from a plethora of decisions including decision of Hon'ble Mumbai ITAT in ITO vs Surge Enterprises Ltd. ITA No.1593/MUM/2010 (A.Y. 2006- 07) wherein it was held: For the reasons given above, we held that the annual value (also referred to as municipal valuation/ .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

Y. 2003-04) it was held: For the reasons given above, we hold that the annual value (also referred to as municipal valuation/ rateable value) adopted by the municipal authorities in respect of the property at ₹ 27, 50,835 should be the determining factor for applying the provisions of Sec.23(1)(a) of the Act Since the rent received by the Assessee was more than the sum for which the property might reasonably be expected to let from yoar to year, the actual rent received should be the annu .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

lause (a) due to nonletting, the provisions of clause (c) apply. The Assessing Officer has not the copy of society bill that gives the municipal letting value. Therefore, clause (b) to section 23(1) would apply and the deemed annual value has to be taken as the actual rent received during the year i.e. ₹ 5,44,332/-. As long as the rent received exceeds the municipal value, the same has to be taken for the purpose of calculating deemed annual value of the property on which tax has to. be ch .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

e order, the Revenue is in appeal before us. 8. I have heard the counsels and perused the records. I find that the Hon'ble Bombay High Court in the case of CIT vs. Tip Top Typography (in ITA No.1213 of 2011 and others dated 08.06.2014) has expounded as under: As regards municipal valuation: (i) We are not in agreement with the department that the municipal rateable value cannot be accepted as a bonafide rental value of the property and it must be discarded straightway in all cases. There can .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

s only in cases of afore referred nature. It is definitely a safe guide; (iii) In the event the security deposit collected and refundable interest free and the monthly compensation shows a total mismatch or does not reflect the prevailing rate or the attempt is to deflate or inflate the rent by such methods, then, as held by the Delhi High Court in Moni Kumar Subba 333 ITR 38 (Del)(FB), the AO is not prevented from carrying out the necessary investigation and enquiry. He must have cogent and sat .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

ned by obtaining the requisite details. However, there also the AO must safeguard against adopting the rate stated therein straightway. He must find out as to whether the property which has been let out or given on leave and license basis is of a similar nature, namely, commercial or residential. He should also satisfy himself as to whether the rate obtained by him from the deals and transactions and documents in relation thereto can be applied or whether a departure therefrom can be made, for e .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

the above exercise or similar permissible process he is bound to disclose the material in his possession to the parties. He must not proceed to rely upon the material in his possession and disbelieve the parties. The satisfaction of the AO that the bargain reveals an inflated or deflated rate based on fraud, emergency, relationship and other considerations makes it unreasonable must precede the undertaking of the above exercise. After the above ascertainment is done by the AO he must, then, com .....

X X X X X X X

Extract - Part text only
Click here to Access Full Contents

X X X X X X X

 

 

 

 

 

Discussion Forum
what is new what is new
 


Share:            

|| Home || About us || Feedback || Contact us || Disclaimer || Terms of Use || Privacy Policy || TMI Database || Members ||

© Taxmanagementindia.com [A unit of MS Knowledge Processing Pvt. Ltd.] All rights reserved.

Go to Mobile Version