Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, MUMBAI BENCHES “H”, MUMBAI
Before: Shri P K Bansal & Shri Amarjit Singh
O R D E R Per P K Bansal, Vice-President:
This appeal has been filed by the assessee against the order of the CIT(A)-41, Mumbai, dated 08.02.2016, for A.Y.2011-12.
Ground no.1 relates to the addition of Rs4,52,667/- as income from house property for flat No.1202, which was self occupied. The facts relating to this addition are that the Assessing Officer noted from the balance sheet of the assessee that she was owner of one office property and three flats but had not declared any income under the head ‘Income from house property.’ On being questioned, the assessee submitted that she is a co-owner in two residential properties and not an absolute and single owner of any of the two residential flats i.e. Flat Nos. 1202 and 1003. She further submitted that the property shown at ` 38,78,526/- was under construction. She, however, did not mention anything about the office premises. The Assessing Officer treated flat no.1003 as SOP. He further noted that the value of the Delhi office premises is shown at ` 49,15,814/- and the value of flat no.1202 is shown at ` 31.67,545/-. He, therefore, computed the Annual Letting Value (ALV) of these properties u/s 23(1) at ` 6,46,668/- being 8% of the capital value of ` 80,83,359/- and after allowing deduction u/s. 24(a), the house property income was determined at ` 4,52,667/-. Aggrieved, the assessee filed appeal before the CIT(A).
Before the CIT(A) the assessee reiterated the submissions made before the Assessing Officer. She stated that her husband, Shri Rajendra Kumar Agarwal, and his brother used to reside in flat nos. 1201 and 1202, which was combined into a single flat. Subsequently, her husband and his brother bought two more flats i.e. 1003 and 1004, which were also combined into a single flat based on family arrangement and though the assessee is the co- owner of flat no.1202 and 1003, for all practical purposes, she resides in the joined flat no.1003 and 1004 and, therefore, the ALV of he said flat will be taken at Nil. Further, as per the family arrangement, she does not own the single joint Flat Nos.1201 and 1202 so the provision of section 23(4) would not apply on the said flat. In respect of commercial property, it was submitted that it was not a residential property therefore, not covered u/s.23(2) and not included in section 23(4). Thus, it cannot be held as deemed to be let out.
After hearing the submissions from both the parties and going through the provisions of section 23(2), we noted that in respect of the commercial property at Delhi Office no ALV can be computed u/s. 23 of the I T Act as Section23(4) refers to the property as given u/s. 23(2). Section 23(2) relates to taxation of house or part of house; Office property cannot be said to be a house. Therefore, so far as the estimation of income in respect of Delhi Office is concerned, we delete the same.
5. Now coming to the determination of ‘Income from house property’ in respect of residential flat no.1202. We noted that the assessee has categorically stated that two flats owned by her have been converted into a single joint flat. Similar the other two flats owned by her husband and his brother i.e. Flat no.1003 and 1004 have also been combined into a single flat as per the family arrangement and since both brothers were co-owners, the assessee was putting up in flat no 1003 and 1004 while her husband’s brother was putting up at flat nos.1201 and 1202 also combined into a single flat. Therefore, we are of the view that for all purposes both the flats has to be treated as a single house. The section does not talk of the value of each flat but of a house or part of a house. House has not been defined u/s. 23 of the IT Act but a house is we feel means a building for human habitation especially one i.e. hired in by a family or a similar group of people and consists of a ground floor and one or more upper storey. It is not denied that both the flats converted into a single one are not being used by the assessee or her family for their habitation. In view of this fact, we are of the view that no ALV has to be computed u/s. 23(2) of the I.T. Act in respect of the said flat. We, therefore, set aside the order of the CIT(A) and delete the addition of ` 4,52,667/- added under the head ‘Income from house property’
Ground no.2 relates to disallowance of credit for self assessment tax of ` 1,07,630/- paid by the assessee on 26.07.2011. After hearing the submissions of both the parties, we direct the Assessing Officer to give credit to the assessee in respect of the self assessment tax paid by the assessee amounting to ` 1,07,630/-. Needless to say that the Assessing Officer will duly verify whether the assessee has paid the said tax and the assessee also is directed to produce necessary evidence to prove the payment of the self assessment tax as claimed by her. This ground is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed.
Order pronounced in the open court on 27th day of November, 2017.