TMI Blog2021 (9) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... c property is not in a remote village and in a dilapidated condition but in Sector 18 in the midst of the City - the said case on the facts as they stand has no application. While so holding, we clarify that facts are in flux as the issue is being remanded back. We specifically required the ld. AR to address whether he is aggrieved by any specific observation in the impugned order which he would want us to address while remanding the issue back to the ld. CIT(A). The ld. AR was unable to address the query. As the relevant provisions of the Act and the evidences on record, we find that in the facts of the present case, it would be appropriate to set aside the issue back to the file of the CIT(A) with the direction to pass a speaking order in accordance with law after taking into consideration the relevant facts - assessee in his own interests is directed to place full facts and submissions before the said authority in order to facilitate a proper conclusion on facts. Said order was pronounced at the time of virtual hearing itself in the presence of the parties via Webex. - ITA Nos. 239 and 247/CHD/2020 - - - Dated:- 2-9-2021 - Diva Singh, Member (J) And Annapurna Gupta, Me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to para 5.2.3 of the order. Referring to the provision, it was his submission that the Income Tax Act pursuant to the amendment of the provision has categorically laid down that the CIT (Appeals) sitting as a First Appellate Authority may confirm, reduce, enhance or annul the assessment order however the power of setting aside the issue is no longer with the said authority. Accordingly, it was his prayer that the order may be set aside. 3. The ld. AR referring to the departmental grounds submitted that he is not opposed to the prayer of the DR. 4. Referring to the Ground raised in the assessee's appeal, it was his submission that in the facts of the present case, the ld. Commissioner has erred in not allowing necessary relief considering the correct facts. It was his submission that the assessing officer has erred in making the addition. In the facts, it was his submission that the very action of adding notional rental value was contrary to law and facts. 4.1. Carrying the argument further it was his submission that it had been brought to the notice of the authorities that the specific house was in a dilapidated condition, hence, it was not capable of being rented out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of the said property and thus even if it was to be rented out, it is necessary that some time for carrying out the activity of painting etc. should have been considered. Accordingly, it was his submission that the property could not have been rented out for the entire period. He concluded that he has no further evidence to rely upon. 5. The learning DR in reply submitted that in the facts of the present case the assessee has had the specific property in his possession and as per law its fair rental value necessarily needs to be added to the assessable income of the assessee. 5.1. It was his submission that mere arguments have been raised that it was in a dilapidated condition without any evidence. The factum of it being an old construction is not disputed. It has already been considered and found to be not an evidence leading to the conclusion that it was not habitable. The law is very clear, no evidence has been placed on record to show that it was not habitable. 5.2. It was also his submission that the mere fact that it was thereafter demolished for fresh construction it was submitted again does not demonstrate that it was not fit for living. 5.3. Addressing the arg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 6,15,440/- in the following manner: 3.4. ........Further, notice u/s. 133(6) was issued to the Estate Officer, UT, Chandigarh to provide the annual rental value of the property. In this regard, the Estate Office, UT, Chandigarh, provided the annual rental value of the property at ₹ 76,77,955/- for the year 2018 vide their Memo No. 290376/SDO(B)/RP-434/2018 dated 18.12.2018 which is placed on record. From their reply it was also noticed that a revised building plan was sanctioned by the Estate Office, UT, Chandigarh on 27.12.2017. The report gives a fair idea regarding the standard rent as per the cost of the land and property as the house existing in relevant F.Y. was also a double storeyed house hence the same can be used as fair standard rent for the property under consideration. 3.5 In view of this for assessing the reasonable fair market rent of the property, as a comparable, House No. 336, Sector-9, Chandigarh was taken into consideration which was taken on rent @ 1,57,000/- per month by DUS Finance Planner LLP. For which the lease document provided by DUS Finance Planner LLP has been placed on record. Hence, monthly rent of ₹ 1,57,000/- is c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h no rental income has been shown by the assessee in his return of income for the AY. 2016-17. The assessee is having 70% of share in this house property as per the title deed. In this regard, assessee was asked to explain as to why Annual Lettable Value of H. No. 101, Sector-18A, Chandigarh not to be included in his Income from House Property. 3.2 The assessee vide his reply dated 22.11.2018 submitted as under: 'The assessee purchased H. No. 101, Sector-18A, Chandigarh during the relevant Financial Year but it was not in a habitable condition due to which it was not possible for assessee to let out. Accordingly, annual Lettable Value of the property should not be included in the income of the assessee. Moreover the house was sold on 03.01.2018. 3.3 The reply of the assessee has been considered but the same was not acceptable as the assessee has not provided any evidence regarding his claim that the house was not in a habitable condition and due efforts have been made to lease out the property in the relevant financial year. In view of this, assessee was show caused as to why appropriate addition may not be made on account of income from house property. In respon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in it, hence the fair deemed rent of the property at House No. 101, Sector-18, Chandigarh is calculated as under: Fair market value of the house for 8 months: ₹ 157000 * 8 - 12,56,000/- 70% of Fair market value: ₹ 1256000*70/100 = ₹ 8,79,200- 3.7 Calculation of Net Annual Value as deemed rent: a) Actual Rent received : Nil b) Standard rent as per Chandigarh Estate Office ₹ 76,77,955/- c) Fair Market Value ₹ 8,79,200/- Net Annual Value equals to higher of(a) (b) i.e. ₹ 76,77,955/- and lower from higher among (a) (b) and that of (c) : ₹ 8,79,200 Hence, income from house property after 30% Standard Deduction u/s. 24(a): ₹ 6,15,440/-. As the assessee has not provided any evidence of payment of municipal taxes hence no benefit of the same is being given to the assessee. In response to the appeal filed by the appellant u/s. 250 of the Act, authorized representative (in short Ld. AR ) filed written submission on behalf of the assessee as under:- Facts of the case with regard to ground of appeal: 1. During the relevant assessment year, assessee was carrying on the business of trading ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... handigarh and House in Sector-9, Chandigarh is incorrect since Sector-18, Chandigarh in porch locality whereas Sector-9, Chandigarh belong to a very high profile society. In view of the above facts decisions of Honorable Courts you are requested to set aside the order of Ld. ACIT CIR-1(1) dated 21.12.2018. 5.2 HELD: I have perused the order of the Assessing Officer and examined the reply of the assesses. Brief facts of the case are that during the assessment proceedings, the AO noticed that the assessee was having a residential property H. No. 101, Sector-18-A, Chandigarh for which no rental income has been shown by the assessee in his return of income for the A.Y. 2016-17. As the assessee was having 70% of share in the said property as per the title deed, the AO made the addition of ₹ 6,15,440/- after granting 30% Standard Deduction u/s. 24(a) of the 'Act' by considering the fact that the assessee has not provided any evidence regarding his claim that the house was in a inhabitable condition and due efforts have been made to lease out the property in the relevant financial year. 5.2.1 On perusal of assessment order, it is seen that the AO has consid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ue provided by the Estate Office, UT, Chandigarh, of the said property which was for the year 2018. Moreover, instead of making field enquiries to fetch the fair market value of the property under consideration, the AO has taken into consideration the House No. 336, Sector-9, Chandigarh for assessing the fair market rent of the property by taking the ground that the appellant did not submit any evidence/basis for Fair Market Rent of the property under consideration in any of his reply shows that the grounds taken for such consideration by the AO are illogical and without application of mind. 5.2.3 In the present case., even if the appellant has failed to submit any evidence in respect of Fair Market Rent of the property under consideration, the Assessing Officer is adjudicator as well as investigator and before reaching any conclusion, it is incumbent upon him to make necessary enquiries in order to make the assessment in fair and reasonable manner, it is the duty of the Assessing Officer to satisfy himself on escaped income after making necessary enquiries and make the addition to the extent which is legally bound to the appellant. Therefore, in view of facts and circumstance ..... X X X X Extracts X X X X X X X X Extracts X X X X
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