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Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI
Before: SHRI VIKAS AWASTHY
आदेश/ ORDER
This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals)-28, Mumbai ( in short ‘the CIT(A)’) dated 01/02/2019 for the assessment year 2002-03..
The assessee in appeal has raised solitary ground against computation of Annual Letting Value of the property. The ground raised by the assessee in appeal reads as under:
On the facts and circumstances of the case and in the law, the Hon’ble CIT(A) erred in confirming the computation of annual value of property at Rs.5,68,880/- instead of Rs.1,68,000/-. The appellant prays that the said addition may please be held as bad law and be deleted.
This is second round of litigation by the assessee before the Tribunal. The assessee is a co-owner of property located at NCPA, Nariman Point, Mumbai having 20% share. The property was let out and the assessee declared ALV of the property at Rs.1,68,000/- (qua his share of 20%). In the original assessment proceedings under section 143(3) of the Income Tax Act, 1961 ( in short ‘the Act’), the Assessing Officer determined the ALV of the property at Rs.6,87,500/-. The assessee carried the issue in appeal before the CIT(A). The CIT(A) determined the ALV at Rs.5,68,880/-. Still aggrieved, assessee filed appeal before the Tribunal in ITA NO.954/Mum/2009. The Co- ordinate Bench of the Tribunal vide order dated 13/09/2013 restored the issue back to the file of Assessing Officer to ascertain whether the propeprty in question is covered under Rent Control Act and thereafter compute ALV of the property in the line with the directions given in decided on 09/09/2009 in the case of Rekha T. Vaswani, another co-owner of the property. Consequent to remand proceedings, the Assessing Officer passed assessment order dated 26/03/2015 under section 143(3) r.w.s. 254 of the Act determining ALV of the property at Rs.5,19,705/- and after giving benefit of deduction under section 24(a) of the Act, the Assessing Officer made addition of Rs.3,63,793/- in the income returned. Aggrieved by the aforesaid assessment order, the assessee filed appeal before CIT(A). The CIT(A) vide impugned order dismissed the appeal of assessee. Hence, the assessee is in present appeal before the Tribunal .
Shri Ajay Pratap Singh, representing the Department vehemently defended the impugned order and prayed for dismissing the appeal of assessee.
Submissions made by ld.Departmental Representative heard, orders of authorities below examined. The solitary issue raised by the assessee in appeal is qua computation of ALV of the property determined by the Revenue at Rs.5,68,880/- as against Rs.1,68,000/- declared by the assessee. A perusal of the documents on record reveal that the house property in question is located at NCPA, Nariman Point, Mumbai. There are four co-owners of the property viz:
Tikam Vaswani 30% Rekha Vaswani 30% Sushil Vaswani 20%(Assessee ) Deepak Vaswani 20% One of the co-owner Rekha T. Vaswani had also disputed the ALP determined by the Assessing Officer in assessment year 2002-03. The matter travelled to the Tribunal in ITA NO.3790/Mum/2007. The Tribunal vide order dated 09/09/2009 restored the issue to the Assessing Officer for passing fresh order after examining, whether the property was covered under Rent Control Act. The Assessing Officer in proceedings under section 143(3) r.w.s. 254 of the Act, determined the ALV of the property after making necessary enquires in line with the directions of the Tribunal. The said assessee thereafter, filed appeal before CIT(A). After being unsuccessful before the First Appellate Authority, the assessee filed appeal before the Tribunal in ITA No.1861/Mum/2012. The Co-ordinate Bench dismissed her appear by observing as under:
“ 2.3 We have heard both the parties and perused the material on record. It is pertinent to mention that in the present case, the ITAT earlier has directed that in case the property is not covered under the Rent Control Act, the ALV has to be determined on the basis of the fair rental value in the market after considering all relevant facts, and held that in such cases the standard rent or the annual ratable value will not be the fair rental value of the property. The AO has followed the directions of ITAT, and after finding that the Rent Control Act is not applicable, has proceeded to determine ALV on the basis of comparable case of a property in the same building/society, giving cogent reasons for adopting the same. The objections raised by the assessee have also been addressed by the AO giving reasons for not finding them acceptable. It is also relevant to note that the Ld.CIT(A), while confirming the action of the AO has correctly observed that the ITAT decision has taken note of ITAT decision in M/s. Baker Technical Services P. Ltd. in 5264/Mum/2006, order dated 12.08.2009, in which it has been held that in a property not subject to Rent Control Act, the ALV was not to be restricted to the standard rent as per the Rent Control Act. This position is also supported by other decisions. In DCIT V Rita A Parekh 2006, 10 SOT 779, Mumbai ITAT has held that where it was shown that where the monthly rent which could be received was higher than in cases where security deposit was not received, the Assessing Officer was justified in computing ALV at a higher value. In view of that matter, we do not find any justifiable reason to interfere with the order of the Ld.CIT(A) confirming the action of the AO in computing the income from house property by adopting the ALV on the basis of a comparable case in the same society and on the basis of the area as per certificate issued by the society and the same is upheld. In the result, the appeal filed by the assessee is dismissed.”
The case of the present assessee being co-owner of the property has travelled the same path. In second round of assessment proceedings under section 143(3) r.w.s. 254, of the Act, the Assessing Officer has observed that the property in question is not covered under the Rent Control Act. The Assessing Officer determined the ALV of the property on the basis of comparable case of the property in the same building. The fact that the property in question is not covered by the Maharashtra Rent Control Act, 1999 has been admitted by the assessee in submissions made before the CIT(A) [Re.Para11, Page 7 of CIT(A) order] The facts in the case of assessee are pari- materia to the facts in the case of Rekha T. Vaswani, co-owner. Following the decision of Co-ordinate Bench in the case of Rekha T. Vaswani,( the relevant extract of the Tribunal order has already been reproduced above) the appeal of assessee is dismissed for similar reasons.
In the result, impugned order is upheld and the appeal by assessee is dismissed.
Order pronounced in the open court on Thursday the 17th day of December, 2020.