MAHIPATRAY SHAH HUF,MUMBAI vs. DCIT CEN CIR 5(1), MUMBAI

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ITA 5502/MUM/2015Status: DisposedITAT Mumbai07 November 2016AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the Assessing Officer did not follow the jurisdictional High Court's decision on determining the annual letting value. Therefore, the matter was set aside and restored to the Assessing Officer for fresh examination.

What were the facts?

The assessee claimed six flats as self-occupied, but the Assessing Officer treated five as deemed to be let out properties. The AO computed the annual letting value at 8% of the cost of these flats, which was confirmed by the CIT(A).

What were the issues?

Whether the annual letting value of deemed to be let out properties was correctly determined by the Assessing Officer without following the jurisdictional High Court's precedent.

Which sections of the Income-tax Act were involved?

Section 23(4)

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Income Tax Appellate Tribunal, “C” Bench, Mumbai

Before: Shri B.R. Baskaran (AM) & Shri Pawan Singh (JM)

For Respondent: Shri C.W. Angolkar
Hearing: 7.11.2016Pronounced: 7.11.2016

The appeal filed by the assessee is directed against the order dated 27.7.2015 passed by the learned CIT(A)-53, Mumbai and it relates to A.Y. 209- 10. The assessee is aggrieved by the decision of the learned CIT(A) in confirming the addition made by the Assessing Officer in respect of deemed to be let out properties.

2.

None appeared on behalf of the assessee. However, the assessee has moved an application seeking adjournment on the plea that it is in the process of appointing a counsel to represent the matter. Since the reason given by the assessee does not appear to be a reasonable one, we reject the adjournment request and proceed to dispose of the appeal ex parte, without presence of the assessee.

3.

We heard learned Departmental Representative and perused the record. The Assessing Officer noticed that the assessee was having six flats in an 2 Mahipatray Shah HUF apartment named “Akruti” located at Walkeshwar. The assessee claimed that all the flats are self occupied properties. The Assessing Officer noticed that the assessee could avail exemption only in respect of one flat and annual letting value of other flats have to be computed by treating the same as “deemed to be let out property” as required u/s. 23(4) of the Act. The assessee did not declare any income as required in section 23(4) of the Act. Accordingly, the AO computed annual letting value of five flats at 8% of the cost of the flats. The learned CIT(A) also confirmed the same and hence the assessee has filed this appeal before us.

4.

With regard to determination of the annual letting value, we notice that Hon'ble Jurisdictional High Court has explained the manner of determination of Annual letting value in the case of Tip Top Typography (2014) (48 Taxman.com 191). We notice that the Assessing Officer has determined the annual letting value without following the decision rendered by Hon'ble Jurisdictional High Court. In this view of the matter, we are of the view that this issue requires fresh examination at the end of the Assessing Officer. Accordingly, we set aside the order passed by the learned CIT(A) on this issue and restore the same to the file of the Assessing Officer with the direction to determine the annual letting value by following the decision rendered by Hon'ble Jurisdictional High Court in the above cited case.

5.

In the result, appeal filed by the assessee is treated as allowed for statistical purposes. Order has been pronounced in the Court on 7.11.2016

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