RINA JAIN,MUMBAI vs. DCIT CC 6(4), MUMBAI

The dispute in the present appeal is confined to determination of annual letting value (ALV) of the premises owned by the assessee.

After considering the submissions of the assessee, learned Commissioner (Appeals) restricted the ALV to ` 17,03,369. The aforesaid order of learned Commissioner (Appeals) was challenged, both, by the assessee and the Revenue before the Tribunal. After considering the submissions of the parties, the Tribunal restored the issue back to the file of the Assessing Officer for fresh adjudication. In pursuance to the directions of the Tribunal, the Assessing Officer took up the assessment proceedings again and in course of such proceedings, called upon the assessee to explain as to why the ALVof

After considering the submissions of the assessee, the learned Commissioner (Appeals), though, observed that the flats held by the assessee as well as other family members in the same building remained vacant during the assessment year 2010–11 and also thereafter till the assessment year 2015–16 and further, he observed that on identical facts involving similar nature of dispute, both, the Commissioner (Appeals) and the Tribunal have uniformly held that the MRV has to be taken as ALV, however, relying upon his own order passed in case of some other family members including Laxmi Satyapal Jain for the assessment year 2013–14 and 2014–15, he directed the Assessing Officer to re–compute the ALV by taking the MRV as the base and increase it by 5% every year to arrive at the 4 Rina Jain ratable value for the impugned assessment year. Further, he directed the Assessing Officer to enhance the value so arrived at by 1/9th of the said value to determine the ALV. As submitted before us, against the aforesaid decision of learned Commissioner (Appeals), both, the assessee and the Revenue again came in appeal before the Tribunal. However, Revenue’s appeal was dismissed due to low tax effect.

The learned Authorised Representative submitted, the direction of learned Commissioner (Appeals) to increase the MRV by 5% every year for arriving at the ALV is not in accordance with the settled position of law. He submitted, the assessee has determined the ALV as per MRV which is the accepted method to determine the ALV. He submitted, learned Commissioner (Appeals) while directing the Assessing Officer to re–compute the ALV by increasing 5% on the MRV every year has followed his own order passed in case of Smt. Laxmi Satyapal Jain, for the assessment year 2013–14 and 2014–15. However, the Tribunal while deciding the issue in respect of appeals filed by different family members including Laxmi Satyapal Jain, in consolidated order vide ITA no.6836/Mum./2017 & Ors., dated 28th February 2019, has not accepted the directions of learned Commissioner (Appeals) for re–computing the ALV by increasing 5% over the MRV. He submitted, in assessee’s own case in assessment year 2011–12, 2012–13, 2013–14 and 2014–15, same view has been 5 Rina Jain expressed by the Tribunal. Thus, he submitted, facts being identical, the decisions of the Tribunal in assessee’s own case as well as in case of other family members would squarely apply.

The learned Departmental Representative strongly relied upon the observations of the Assessing Officer.

We have considered rival submissions and perused the material on record. Undisputed facts are, the assessee is the owner of certain premises in a housing complex which remained vacant during the year under consideration. However, in the return of income filed for the impugned assessment year, the assessee offered income from such house property by determining the ALV under section 23 of the Act as per MRV. Whereas, the Assessing Officer has determined the ALV on the basis of rent received by the assessee in the assessment year 2015–16. However, learned Commissioner (Appeals) has directed the Assessing Officer to re–compute the ALV by taking the MRV as the base and increase it by 5% every year. It is evident, learned Commissioner (Appeals) while giving such direction has followed the order passed by him in case of Smt. Laxmi Satyapal Jain, one of the family members. However, while deciding the issue in case of the aforesaid family member, the Tribunal in the order referred to above has disagreed with the aforesaid decision of learned Commissioner (Appeals) and directed the Assessing Officer to determine the ALV as 6 Rina Jain per MRV. In fact, in assessee’s own case in assessment years 2011– 12, 2012–13 and 2013–14, the Tribunal while deciding identical issue in ITA no.3893/Mum./2017 & Ors., dated 22nd March 2019, has held that determination of ALV on ad–hoc basis by making 5% increase over the MRV is not acceptable. Further, the Tribunal has directed that the ALV of the vacant flat has to be determined on the basis of MRV. The same view was expressed by the Tribunal while deciding assessee’s own case for the assessment year 2014–15, vide ITA no. 547/Mum./2018, dated 31st July 2019. Facts being identical, respectfully following the aforesaid decisions of the Tribunal in assessee’ own case as well as in case of other family members, we direct the Assessing Officer to determine the ALV of the vacant flat as per MRV. In case, it is found that ALV determined by the assessee is as per MRV, the same should be accepted. Grounds are allowed.

In the result, appeal stands allowed. Order pronounced in the open Court on 05.02.2020