SH. SUDHIR KUMAR MITTAL (HUF),NEW DELHI vs. ACIT, NEW DELHI

PER H.S. SIDHU, JM

This appeal is filed by the assessee against the order dated

24.9.2014 passed by Ld. CIT(A)-XXVI, New Delhi for Assessment Year

2011-12.

i) That having regard to the facts and

circumstances of the case, Ld. CIT(A) has erred in

law and on facts in confirming the action of AO in

assessing notional rent of Rs. 65,10,000/- instead of

Rs. 15,000/- as declared by the assessee from M/s

Supreme Textile under the head income from house

property and accordingly made the impugned addition

without appreciating the facts and circumstances of

the case and without considering the submissions of

assessee.

ii) That in any case and in any view of the matter,

action of Ld. CIT(A) in confirming the action of AO in

making the impugned addition and framing the

impugned assessment order is contrary to law and

facts, void ab-initio, beyond jurisdiction and the same

is not sustainable on various legal and factual

grounds.

iii) That having regard to the facts and

circumstances of the case, Ld. CIT(A) has erred in law

and on facts in not reversing the action of AO in

charging interest u/s. 234A, 234B, 234C and 234D of

Income Tax Act, 1961.

iv) That the appellant craves the leave to add, alter

or amend the grounds of appeal at any stage and all

the grounds are without prejudice to each other.

of income showing income of Rs. 63,40,520/-. The assessee

coparceners are; Sh. Sudhir Kumar Mittal, Karta; Smt. Madhu Mittal,

Member; Sh. Utsav Mittal, Member and Ms. Shivani Mittal, Member.

The assessee derives income under the heads ‘income from house

property’ and ‘income from other sources’. The case of the assessee

was selected for scrutiny. Accordingly, the assessment was completed

on income of Rs. 1,13,37,290/-; wherein addition on account of

notional rental income was done. The assessee owns a commercial

property admeasuring 1800 sq. feet at E-29, South Extension, Part-II,

New Delhi. Out of which; the area of 630 sq. feet shop was given to

M/s M&B Footwear initially during the year and thereafter to M/s Mirza

International ltd. on monthly rent of Rs. 4,60,000/- and Rs.

5,50,000/- respectively. However, the remaining area was given to

M/s Supreme Textile, a sister partnership concern, on annual rent of

Rs. 15,000/-. The two partners of M/s Supreme Textile are; Sh.

Sudhir Kumar Mittal; having 75% share and Sh. Utsav Mittal; having

25% share; are coparceners of the assessee HUF,. The AO was of the

view that the assessee HUF has charged over nominal rent from M/s

Supreme Textile because its partners are the assessee HUF’s

coparceners. Therefore, the AO worked out the Annual Value of that

portion of the house property; which was let out to M/s Supreme

Textile, by applying the average rent received from M/s M&B Footwear

and M/s Mirza International Ltd.. According to the assessee, the

Annual Value of the house property let out to M/s Supreme Textile is

Rs. 1,80,000/- @Rs. 15000/- per month where as the AO worked out

the AV at Rs. 65,10,000/- and assessed the income of the assessee at

Rs. 1,13,37,290/- vide order dated 30.10.2013 passed u/s. 143(3) of

the Act. Against the assessment order, the Assessee appealed before

the Ld. CIT(A), who vide his impugned order dated 24.9.2014 has

dismissed the appeal of the assessee.

that the issues in dispute are squarely covered by the decision of the

G-Bench, ITAT, New Delhi in assessee’s own case decided on

08.04.2015 passed in ITA No. 1481/Del/2013 (AY 2009-10) wherein

the Tribunal has remitted back the issues to AO for re-adjudicate the

same and pass a fresh order. He further stated that pursuant to the

Tribunal’s order dated 08.04.2015, the AO observed the income as

declared in the income tax return is being taken as the income from 4

the said property and accepted the taxable income as per appeal

effect order dated 29.7.2015 and assessed the same at

Rs. 45,39,100/- vide order 16.2.2016 passed u/s. 143(3)/254 of the

Income Tax Act, 1961. In view of above, he requested that issues in

dispute may be decided in favour of the assessee by accepting the

declared income of Rs. 63,40,520/- as assessed income.

below and reiterated on the findings of the authorities below.

especially the impugned order as well as the decision of the G-Bench,

ITAT, New Delhi in assessee’s own case decided on 08.04.2015 passed

in ITA No. 1481/Del/2013 (AY 2009-10) wherein the Tribunal has

remitted back the issues to AO for re-adjudicate the same and pass a

fresh order. We further note that pursuant to the Tribunal’s order

dated 08.04.2015, as aforesaid, the AO accepted the taxable income

as per appeal effect order dated 29.7.2015 and assessed the income

at Rs. 45,39,100/- vide order 16.2.2016 passed u/s. 143(3)/254 of

the Income Tax Act, 1961 in assessee’s own case for the assessment

year 2009-10. For the sake of clarity, we are reproducing hereunder

the relevant paragraphs of the said assessment order dated 16.2.2016

passed by the AO u/s. 143(3)/254 of the Act. 5

“....However, the assessee HUF is showing the rent

received from M/s Supreme Textiles of Rs. 15,000/-

as rental income which is more than the standard

rent of Rs. 10,060/-. The rental expenditure debited

in the P&L A/c of the M/s Supreme Textiles is also

Rs. 15,000/- only as seen from the submission of P&L

A/c. The income as declared in the income tax return

is being taken as the income from the said property.

In the light of the above discussion, facts of the case,

the findings after due verification and on

applicability of case laws referred above, the taxable

income as per appeal effect order u/s.

254/250/143(3) dated 29.7.2015 of Rs. 45,39,104/-

(Rounded off Rs. 45,39,100/- was being accepted as

assessed income.

Income assessed at Rs. 45,39,100/- Credit of

pre-paid taxes /TDS and self assessment tax is being

given while computing the tax liability. Interest as

per applicable provisions of section

234A/234B/234C/234D charged and ITNS – 150

issued.” 6

7.1 After perusing the aforesaid assessment order dated 16.2.2016

relevant to assessment year 2009-10 wherein the similar issues as

involved in this appeal were raised and pursuant to the Tribunal’s

directions, as aforesaid, the AO has accepted the declared income as

assessed income. Therefore, in our considered opinion by following

the Rule of consistency, the issues in dispute need to be decided in

favour of the assessee and accordingly, the declared income of

Rs.63,40,520/- was assessed on the same amount and interest as per

applicable provisions of section 234A, 234B, 234C & 234D of the Act

shall be charged, if any.

Order pronounced on 03-07.2018.

Sd/- Sd/- (PRASHANT MAHARISHI) (H.S. SIDHU) ACCOUNTANT MEMBER JUDICIAL MEMBER

Dated: 03-07-2018

*SR BHATNAGAR* Copy of order forwarded to:

(1) The appellant (2) The respondent (3) Commissioner (4) CIT(A) (5) Departmental Representative (6) Guard File By order

Assistant Registrar 7