NITIN RAJ MARWAH,MUMBAI vs. DCIT CIR 8(20), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “SMC”, MUMBAI

BEFORE SHRI PRASHANT MAHARSHI (ACCOUNTANT MEMBER) & SMT. KAVITHA RAJAGOPAL (JUDICIAL MEMBER)

ITA No. 19/MUM/2022 (A.Y.2013-14)

Nitin Raj Marwah vs DCIT-10(2)(2), Ayakar Bhavan 8th Floor, Marwah Centre Maharshi Karve Road Krishanlal Marwah Marg Mumbai-400 020 Andheri (East) Mumbai-400 072 PAN : AABPM2959 APPELLANT RESPONDENT

Assessee represented by None Department represented by Shri Himanshu Sharma

Date of hearing 25/05/2022 Date of pronouncement 22/08/2022

ORDER Per Kavitha Rajagopal (JM):

This appeal has been filed by the assessee as against the order of Ld.CIT(A) under section 250 which pertains to assessment year 2013-14. 2. The solitary ground of appeal is that the Ld.CIT(A), National Faceless Appeals Centre , Delhi (NFAC) has erred in determining a sum of GBP of 21.180/- as the ALV of a residential house property owned by the assessee in London, United Kingdom by ignoring the additional ground of appeal filed by the assessee dated 23/02/2019 and by not considering the additional ground that the house property situated in London should be treated as self occupied and the house property situated at Bandra be treated as deemed let out.

ITA No. 19/MUM/2022

From this it is seen that the assessee has offered rental income received from property at (i) to (v) mentioned above under the head “Income from house property”. It is further observed that the assessee has not offered any income in respect of other two properties, viz. flat at Metropolitan A/6 and ½ share in flat at London. It is also observed from the balance sheet dated 31/03/2013 and in computation of house property of assessee two properties, namely, flat at Metropolitan A/6 and ½ share in flat at London was vacant and the Assessing Officer has alleged that the assessee has not offered any income in respect of one of these properties as deemed to be let out under the head “Income from house property”. The Assessing Officer further proceeded to

ITA No. 19/MUM/2022

question the assessee as the assessee being a Resident in India, the London flat has to be considered as deemed to be let out and to be charged to tax under the head “Income from house property”. The assessee’s contention that 50% of share in the London flat was not let out on rent and even otherwise the Assessing Officer does not have jurisdiction as the assessee was covered by the DTAA between India and UK. The assessee further submitted that since the value of property which is self occupied falls below the taxable limit in U.K., the assessee was not liable to be taxed on the said property here in India. The Assessing Officer failed to consider the assessee’s contention on the ground that since the assessee has not paid tax and also has not substantiated his claim by any evidence, it amounted to double exemption and thereby Assessing Officer proceeded to hold that the London property is deemed to be let out for which the annual value of property was calculated relying on the decision of ITO vs Chem Mech Pvt Ltd (2002) 83 ITD 427 (Mum) wherein the standard rent under Bombay Rent Act was calculated by taking the interest rate @8.5% on the total investment in the property and since the said decision pertained to the year 2002 the present interest rate was to be calculated @10% of the property value taken as gross annual value for the purpose of section 23(1) of the Act and the Assessing Officer calculated Rs.17,18,989/- being 10% of the property value is taken as gross annual value, on which after allowing standard deduction of 30% under section 24(a) of Rs.5,15,697/-, the assessing officer made addition of Rs.12,30,292/- as income chargeable to tax under the head “Income from house property”. Aggrieved by this, the assessee preferred appeal before the Ld.CIT(A) wherein the Ld.CIT(A) held that the Assessing Officer had jurisdiction over the global income of assessee and upheld the Assessing Officer’s order thereby determining the Annual Letting

ITA No. 19/MUM/2022

Value (ALV) of London flat @1765 pounds / month and 21,180 pounds for the year. 4. During the appellate proceedings before the Ld.CIT(A), the assessee filed an additional ground of appeal to treat the London property as self occupied and property at Bandra, Mumbai to be treated as deemed let out which was not considered by the Ld.CIT(A). 5. The assessee is in appeal before us as against the impugned order of the Ld.CIT(A). Though there was no representation from the assessee, we proceed to decide the appeal on hearing the Ld.DR and the materials available on record. The Ld.DR relied on the decision of the lower authorities. It is observed that the assessee in his statement of facts have stated that in subsequent years for A.Ys 2014-15, 2015-16 and 2016-17, the Ld.CIT(A) for A.Y. 2014-15 and the Ld.AO for the other two assessment years have conceded the assessee’s claim to treat the house property at Bandra, Mumbai as self- occupied. On perusal of the orders pertaining to subsequent years from A.Y. 2014-17, it is noted that as the assessee has revised his computation of income in which additional income from house property situated at Bandra, Mumbai has been offered to tax as deemed let out and the other property situated at London was treated as self occupied property. Since the facts involved in these assessment years pertain to the same properties, we deem it fit to consider the same for the impugned assessment year in this appeal also. We hereby direct the Assessing Officer to compute the property situated at Bandra, Mumbai as deemed let out property and the property situated in London as self occupied property. 6. Resultantly, the appeal filed by the assessee is allowed.

ITA No. 19/MUM/2022

Order pronounced in the open Court on 22nd August, 2022.

Sd/- sd/-

(PRASHANT MAHARSHI) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai, Dated: 22/08/2022 Pavanan Copy of the Order forwarded to : 1. The Appellant , 2. The Respondent. 3. The CIT(A)- 4. CIT 5. DR, ITAT, Mumbai 6. Guard file.

BY ORDER, //True Copy// (Dy./Asstt. Registrar), ITAT, Mumbai