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Income Tax Appellate Tribunal, “SMC”, BENCH MUMBAI
Before: SHRI R.C.SHARMA, AM
आदेश / O R D E R PER R.C.SHARMA (A.M): These are appeals filed by assessee against the order of CIT(A)- 54, Mumbai dated 12/09/2016 for A.Y.2006-07 to 2010-11 in the matter of order passed u/s.143(3) / 143(3) r.w.s.153A of the IT Act. 2. Only grievance of assessee in all the years pertain to addition made on account of deemed notional rental income from properties owned by her. 3. Rival contentions have been heard and record perused.
Facts in brief are that the assessee had filed original return for A.Y.2006-07 on 28/07/2006 declaring total income of Rs.18,82,917/-. The assessment u/s.143(3) of the Act was completed on 27/02/2008. A search action was carried out in the case of J.M. Baxi Group on 20/03/2012. During the course of search, the lockers of assessee Smt. Vidyaben B Kotak have been searched. The Ld. AO has observed that during the course of search proceedings while operating PO at Locker No. 746, details of various properties held by the assessee and her family members or concerns, in which family members are interested, were found. The details of such properties which were owned by the assessee, either in full or part are as under. S.No. Description of the Property with share Sq. mt. Sq. ft. pertained to pertained to the assessee the assessee
1 /2nd undivided share in Flat No. 1 6 1 147.55 1587.64 (SOP) at Kalpana, 96 Netaji Subhash Road, Mumbai 1/3rd undivided share in Flat No. 18 2 52.96 569.85 at Kalpana, 96, Netaji Subhash Road, Mumbai 3 38.57 416.01 Flat at Jhoothika Co-operative Housing Society Limited, Flat No.l, 22, Naushir Bharucha Road, Mumbai
4 Flat at West wind, Flat No. 402, Plot No. 241 170/1, Gandhi Gram Road, Juhu, Mumbai- 400 049
The Ld. AO has also observed that though the assessee owned the above referred properties, she had not offered any deemed rent from these properties, though the assessee should have offered deemed rent from them except one property which was claimed/treated as SOP. Accordingly the Ld. AO had issued show cause notice dated 10.01.2014 requesting the assessee to explain as to why the deemed rent should not be calculated on the properties other than the one treated as SOP. In response to the same the assessee submitted detailed explanations before the Ld. AO and explained that as per provisions of section 23, if an assessee has a house property which consists of two or more residential units and all such units are self occupied, the annual value of the entire house property shall be taken as nil as there is only one house property though it has more than one residential units. After considering the various contentions raised by the assessee the Ld. AO rejected the claim of the assessee that where she has occupied more than one residential unit there all such residential units should be considered one residential house and treated as SOP.
The income from house property of Flat No. 18. Kalpana is worked out as under:- l/3rd undivided share in Flat No. 18 at Kalpana, Mumbai Rs. 2,80,3661- Less: deduction u/s 24 at 30% Rs. 84,110/- Addition made relating to Flat No. 18, Kalpana, Mumbai Rs. 1,96,256/-
The income from house property at Flat No.1 at Joothika Co-operative Housing Society, is worked out as under. Flat No. 1 at Jhoothika Co-operative Housing Society Limited Rs. 1,69,732/- Less: deduction u/s 24 at 30% Rs. 50,920/- Addition made Flat No. 1 at Jhoothika Co-operative Housing Society Limited, Naushir Bharucha Road, Mumbai Rs. l,18,812/- 8. The income from house property at Flat No. 402. West Wind, Juhu. Mumbai is worked out as under.
Flat at No. 402 at West Wind, Juhu, Mumbai Rs. 78,084/- Less: deduction u/s 24 at 30% Rs. 23,425/- Addition made Flat No. 402, at West Wind, Juhu, Mumbai Rs. 54,659/- Therefore, the notional rental income is determined at Rs. 3,69,727/- 9. By the impugned order, CIT(A) confirmed the action of the AO against which assessee is in further appeal before us.
I have considered rival contentions and carefully gone through the orders of the authorities below and found from record that Flat No.16 and 18 at Kalpana, Marine drive were duplex flats used by the assessee. I also found that flat no.16 and flat no.18 on 5th and 6th floor respectively having common staircase attached to both the floors inside the said premises and hence, it can be considered as one house which is adjacent to each other. Accordingly, I direct the AO to delete addition made in respect of Flat No.18 for the A.Y.2006-07 to 2009-10. However, from A.Y.2010-11, the assessee has taken Flat No. 8 & 9 at Kalpana, Marine drive as SOP, therefore, there is no reason to disturb the notional value taken by the AO for Flat No. 16 & 18 at Kalpana, while making addition u/s.22 of the IT Act.
Flat No.1, Joothica Co-operative Housing Society Ltd., 22, Naushir Bharucha Road, Mumbai – 400 007 was claimed to be not in a habitable state and therefore it did not have a ready marketable value. In the interest of justice, I restore this issue to the file of AO for verifying factual position and to decide the same afresh as per law.
In respect of Flat No.402, West Wind, Plot No.170/1, Gandhi Gram Road, Juhu, Mumbai – 400 049, we do not find any infirmity in the order of lower authorities, accordingly, we confirm the addition made by AO u/s.22.
In the result, appeals of the assessee are allowed in part in terms indicated hereinabove.