MRS KARINA CHANDUR MORINAL,MUMBAI vs. CIT (A)-48, MUMBAI

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ITA 264/MUM/2019Status: DisposedITAT Mumbai28 January 2020AY 2014-153 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that an industrial shed used for business purposes does not fall under the definition of 'house property' for the purpose of computing ALV under Sections 22 and 23 of the Act. Therefore, the addition made by the AO was not justified.

What were the facts?

The Assessing Officer added 7% of the value of an industrial shed as deemed rental income (ALV). The assessee contended that the industrial shed was not a house property and was used for business purposes. The CIT(A) upheld the AO's action.

What were the issues?

Whether an industrial shed used for business purposes can be treated as 'house property' for the computation of Annual Letting Value (ALV) under the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 22,Section 23

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC”, BENCH

For Appellant: Shri Mulraj D Gala (AR)
For Respondent: Shri Akhtar H Ansari (DR)
Hearing: 21/01/2020Pronounced: 28/01/2020

O R D E R PER: R.C. SHARMA, A.M. This appeal by the assessee is directed against the order dated 12/10/2018 of ld. CIT(A)-48, Mumbai for the A.Y. 2014-15 in the matter of order passed u/s 143(3) of the Income Tax Act, 1961 (in short, the Act).

2.

In this appeal, the assessee is aggrieved for adopting ALV at 7% in respect of industrial shed.

3.

Rival contentions have been heard and record perused. The facts in brief are that the assessee is owning a house property

1.

Mrs. Karina Chandur Moriani Vs CIT(A) situated at Vishal Cooperative Housing Society at Anand Nagar and an industrial shed situated at Gala at Vakola, Santacruz East, Mumbai. While framing the assessment, the A.O. added 7% of the industrial Gala as ALV in assessee’s income. It was contention of the assessee that the industrial Gala is not a house property and only one house property was in the form of flat situated at Vishal Cooperative Housing Society at Anand Nagar. However, the A.O. did not agree with the assessee’s contention and added the ALV of industrial Gala in assessee’s hands. By the impugned order, the ld. CIT(A) has confirmed the action of the A.O., against which the assessee is in further appeal before the ITAT.

4.

I have considered the rival contentions and carefully gone through the orders of the authorities below and found that the A.O. has made addition in respect of industrial Gala which is not a house property within the meaning of provisions of Section 22 and 23 of the Act, in so far as it was meant for use by assessee for the purpose of his business. The industrial Gala was used by the assessee as his business asset. The residential flat owned by the assessee was situated at Vishal Cooperative Housing Society at Anand Nagar, Santakruz. One flat is free in the hands of the assessee and ALV of which cannot be computed u/s.23(4) since it was kept for use by the Mrs. Karina Chandur Moriani Vs CIT(A) assessee for his own residence. Accordingly, there is no merit in the orders of the lower authorities.

5.

In the result, appeal of the assessee is allowed.

Order pronounced in the open court on 28th January, 2020.

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