KAMINI KRISHNA KOTAK,MUMBAI vs. DCIT CEN CIR 6(4), MUMBAI

The common issue raised in these appeals is that learned CIT(A) erred in confirming the action of the Assessing Officer in treating two properties as deemed let out and determining on an adhoc basis notional rental income for both the properties and thereby confirming following additions :- 2010-11 Rs. 9,06,146/- 2011-12 Rs. 9,06,146/- 2012-13 Rs. 9,96,760/- Additional ground has been raised by the assessee in this appeal which reads as under :-

For A.Y. 2010-11, brief facts on this issue are that the Assessing Officer observed that during the course of search proceedings while operation of Locker No. 746 various properties detail held by the assessee and family members and concerns were found. Details were as under :-

Upon assessee’s appeal, learned CIT(A) noted the contention of the assessee as under :- “I have considered the submissions of the appellant and perused the materials available on record. The appellant has requested to delete the impugned addition of Rs. 9,06,146/- made as income from House Property. The main contentions of the appellant are that the Flat No. 17B at Kalpana, 1/2nd undivided share in Flat at No. 16 and l/3rd undivided share in Flat No. 18 at Kalpana, 96-B, Netaji Subhash Road, Marine Drive, Mumbai were occupied by her and other members of her family and hence these flats together constitutes only "one house property", though the same are more than one residential units because she was occupying all these flats for herself and her family members and hence need to be treated as SOP. In support of her claim the appellant has placed reliance on various judicial pronouncements as detailed above. The appellant has also submitted that Flat No. 16 and 18 at Kalpana, 96, Netaji Subhash Road, Marine Drive; Mumbai is extremely old and not easily assessable from the main road and hence does not have ready marketable value. The contentions raised by the appellant have been considered carefully. In respect of property Flat No. 17B at Kalpana, 1/2nd undivided share in Flat at No. 16 and l/3rd undivided share in Flat No. 18 at Kalpana, 96-B, Netaji Subhash Road, Marine Drive, Mumbai the appellant has submitted that the same are occupied by herself and her family members and hence the same have been considered as "one house property", though the same are more than one residential units and hence treated as SOP.

Thereafter learned CIT(A) referred to the case laws in this regard and proceeded to reject the assessee’s contention and uphold the action of the Assessing Officer.

Against this order the assessee is in appeal before us.

We have heard both the counsel and perused the records. Learned counsel referred to the additional ground and also submitted that a decision of ITAT in the case of co-owner Smt. Vidyaben Bhagwan Kotak in respect of the same flats in which she had half shareholding in Flat No. 16 & 18 at Kalpana, in which the ITAT at paragraph 10 of the said order has accepted that these flats are duplex flats used by the assessee having common staircase and hence it was held that they can be considered as one house which is adjacent to each other. This was so held by the ITAT vide order dated 20.9.2017 in to 7186/Mum/2016.

Now we note that this is an additional evidence which was not placed before the authorities below. Though the Revenue has challenged the additional ground and raised ground that how flat No. 16 & 18 be considered as combined single unit. Further the Revenue has also challenged that earlier assessee had claimed Flat No. 17B as self occupied property.

Upon careful consideration, we find that since there is an ITAT order in the case of co-owner, which has not been set aside by Hon'ble Hon'ble Jurisdictional High Court, we deem it appropriate to remit this issue to the file of the Assessing Officer. The Assessing Officer shall consider this additional evidence and decide accordingly. We further hold that there is no estoppel against the assessee in now offering self occupied property and deemed let out property in a different manner than that offered initially. Assessee is very much entitled to plan its taxation so as to minimize the burden so long as the method is not colourable. Here the approach of the assessee can by no stretch of imagination be said to be a colourable device.