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2019 (8) TMI 614

..... 1999 - HELD THAT:- We find that the factual matrix is squarely covered in assessee’s favor by catena of judicial pronouncements wherein it has been held that municipal rateable value is a recognized basis for determination of ALV. The said proposition has duly been approved in CIT V/s Tip Top Typography [ 2014 (8) TMI 356 - BOMBAY HIGH COURT ] as well as in Smt. Smitaben N.Ambani V/s CWT [ 2009 (1) TMI 430 - BOMBAY HIGH COURT ] which has subsequently been followed by Hon’ble Court in number of decisions. Therefore, no infirmity could be found in the impugned order, in this regard. The other decisions of this Tribunal also support the said proposition. Additionally, no fault could be found in the reasoning of Ld. first appellate authority in paragraph 5.1.1 that the property under co-ownership was encumbered property and could not be expected to be let out at fair market value. Also, no fallacy could be found in the logic that due to the indivisibility of living space of co-owned property, it could be said that 60% of the property was notionally occupied by the assessee and hence, was to be treated as self-occupied property of the assessee. - Decided against revenue. - I .....

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..... ker Tower, Cuffe Parade, Mumbai - 400 005 by holding that if the property is not let out then the ALV cannot exceed the standard rent determined / determinable. 4. Whether on the facts and circumstances and in law the CIT(A) was right in deleting the ALV computed by the A.O in respect of the properties viz. flat No. 31B, Maker Tower and Flat no. 171-B, Maker Tower @ 8% of the cost of the flat as held by Hon ble ITAT in the case of Emtici Engineering Ltd., Vs. Ld. Assistant Commissioner of Income Tax - Tax [1997] 58 TTJ 27 (AHD.). 5. The appellant prays that the order of CIT(A) on the above grounds be set aside and that of the A.O be restored. 4.1 Facts on record would reveal that the assessee being resident individual was assessed for year under consideration u/s 143(3) of the Income Tax Act,1961 on 29/02/2016 wherein the income of the assessee was determined at ₹ 539.29 Lakhs after certain additions as against returned income of ₹ 445.39 Lakhs filed by the assessee on 27/07/2013. As evident from grounds of appeal, the subject matter of present appeal is addition on account of notional rental value of (i) Flat No.31B, Maker Tower, Cuffe Parade, Mumbai & (ii) Flat No .....

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..... e extracted in the following manner: - 5.1.1 This ground pertains to addition of ₹ 93,89,976/- made by the A.O. as income from self-occupied property. This issue had also come up before me in the appellant's appeal for A.Y. 2011-12 & 2012-13. I have decided this issue in favour of the appellant. Relevant extract of my decision is reproduced hereunder: The basic issue in the instant case is the AL V for the second house owned and self-occupied by the appellant. It is seen that the appellant has two self occupied properties, viz. 181B, Jolly Maker Tower A No. 1, 18th Floor, Cuffe Parade, Mumbai 400005 (henceforth referred to as Property 1) and 31B, Maker Tower, Cuffe Parade, Mumbai 400005 (henceforth referred to as Property 2). He lives in Property 1 with family. He owns Property 2 along with his son, Shri Bharat Oberoi in a 60% - 40% ownership ratio. For the Property 1, the appellant declared it as self occupied and claimed exemption. For Property 2, he offered ₹ 8,010/ as annual lettable value (ALV) on basis of letter given by Maker Tower A & B Co-operative Housing Society Ltd., Mumbai 400005. The AO did not accept this ALV. Based on his Inspector's repo .....

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..... d Representative for the assessee submitted that the annual value of second SOP should be determined on the basis of Municipal Rateable Value (MRV). The Id. AR also pointed out that the property was covered by Rent Control Act, and therefore, ALV could not exceed the standard rent determined under the Rent control Act. The Id. DR on the other hand supported the orders of authorities below. 4. We have perused the records and considered the rival contentions carefully. The dispute is regarding determination of ALV of second house property at Ahmadabad which was self occupied by the assessee. Income from one SOP is exempt under the provisions of section 23 but the income from the second SOP is taxable and for this purpose ALV has to be determined under section 23(1)(a) as if the property was let out in view of the provisions of section 23(4)(b). Therefore, the revenue authorities are justified in taxing the second house property on the basis of fair rental value. However, the assessee has made a claim that the second SOP was covered under Rent Control Act. In case rent of the property is covered under Rent Control Act, ALV can not exceed the standard rent determined/determinate under .....

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..... Mumbai Tribunal in Harsh Jain V/s DCIT [ITA No. 2710/Mum/2013 17/07/2015] - Revenue s Appeal dismissed by Hon ble Bombay High Court vide ITA No. 1438 of 2016 on 05/02/2019 (ii) Mumbai Tribunal in DCIT V/s Laxmi Jain [ITA No. 2118/Mum/2012 26/11/2014] - Revenue s Appeal dismissed by Hon ble Bombay High Court vide ITA No. 1285 of 2015 on 16/04/2018 (iii) Mumbai Tribunal in Anand Kumar Jain V/s ACIT [ITA Nos.3887,3665/Mum/2017 dated 07/12/2018] followed in ITA No.6836/Mum/2017 dated 27/02/2019 (iv) Mumbai Tribunal in Owais M. Husain V/s ITO [194 TTJ 102] (v) Mumbai Tribunal in Pankaj Wadhwa V/s ITO [IAT Nos. 5005,5007/Mum/2017 dated 30/11/2018] Our attention has also been drawn to the fact that revenue s appeal, in earlier years, have already been dismissed by the Tribunal, albeit on account of low tax effect. 7. Upon consideration of decisions cited by Ld. AR, we find that the factual matrix is squarely covered in assessee s favor by catena of judicial pronouncements wherein it has been held that municipal rateable value is a recognized basis for determination of ALV. The said proposition has duly been approved by Hon ble Bombay High Court in CIT V/s Tip Top Typography [368 ITR 330] .....

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