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Income Tax Appellate Tribunal, MUMBAI BENCHES “G”, MUMBAI
Before: Shri Amit Shukla, & Shri Ashwani Taneja
आदेश / O R D E R Per Ashwani Taneja (Accountant Member): This appeal has been filed by the Revenue against the order of Ld. Commissioner of Income Tax (Appeals), Mumbai- 27 {(in short ‘CIT(A)’}, dated 20.08.2014 passed against assessment order u/s 143(3) dated 20.02.2013 for the Assessment Year 2011-12 on the following grounds:
2 Govindbhai L. Kakadia “1.Whether on the facts and circumstances of the case and in law, the Ld. CIT(A) was correct in holding the assessee was eligible for Municipal Ratable Value even though the assessee has offered the notional income on deemed let out property @ 8.50% of the total investment made to acquire such residential and commercial properties in preceding assessment year i.e. A.Y.2010-11" 2.On the facts and circumstances and in law, the Ld. CIT(A) grossly erred on facts of the case in directing the Assessing Officer to tax the properties based on Annual Letting Value as per Municipal Ratable Valuation, which is an afterthought of the assessee and change of stand from the previous year. 3.The appellant craves leave to amend or alter any ground or add a new ground which may be necessary.”
During the course of hearing, none was appeared on behalf of the Assessee and by Shri A. Ramachandran, Departmental Representative (Ld. DR) on behalf of the Revenue.
During the course of hearing none appeared on behalf of the assessee and Ld. DR relied upon the order of the AO.
4. The solitary issue raised in this appeal by the revenue is with regard to the grievance of the revenue against the order of Ld. CIT(A) wherein Ld. CIT(A) has given direction to AO for assessing, the Annual Ratable Value of the property on the 3 Govindbhai L. Kakadia basis of Municipal Ratable Value in respect of the house property of the assessee.
4.1. We have gone through the orders of the lower authorities. It is noted that the assessee claimed before the Ld. CIT(A) that annual letting value of its property should be taken as nil as the properties were never let out. The alternative submission of the assessee was that if ALV(Annual Letting Value) cannot be taken at nil, then AO should be directed to adopt the Municipal Ratable Value as deemed value of property in question. The Ld. CIT(A) rejected the primary submission of the assessee but accepted the alternative submission of the assessee and directed the AO to verify the municipal ratable value in respect of the impugned properties and modify the assessment order accordingly.
4.2. Being aggrieved, the revenue filed an appeal before us.
4.3. We have gone through the orders of the lower authorities. The assessee had made claim for vacancy allowance on the ground that properties were never let out. In our view, Ld. CIT(A) has rightly rejected the primary claim of the assessee as vacancy allowance can be claimed by the assessee, if the property has been let out for a part of the year and it remains vacant for some part of the year. If the property is never let out, then its ALV has to be determined on deemed basis as per law contained in section 23 of the Act. In our considered view the Ld. CIT(A) has rightly held that under these circumstances
4 Govindbhai L. Kakadia municipal ratable value should be adopted as deemed annual letting value in respect of vacant properties, the relevant part of his order is reproduced below: “I also find that the Ld. AR has fairly made an equitable statement that without prejudice to the stand taken regarding the deemed value to be taken at NIL, the Ld. AO could have at best adopted the Minicipal Ratable Value as the deemed value of the property in question. It has been held in a number of decisions that what is to be brought to tax as income from house property u/s.23(1) is the higher of the rent actually received or the Municipal Ratable Value or the standard rent as per the Rent Control Act. Refence in this regard is made to: 1. Sheila Kaushish v. CIT [1981] 131 ITR 435 (SC); 2. Amolak Ram Khosla v. CIT [1981] 131 ITR 589 (SC) 3. Dewan Daulat Ram Kapoor v. NDMC [1980] 122 ITR 700(SC) 4. Dr. Balbir Singh v. MCD [1985] 152 ITR 388 (SC) 5. CIT v. Mayur Recreational & Development Ltd.(AIT- 2008-189 ITA-SB); 6. CIT v. Raghubir Salan Charitable Trust 183 ITR 297 - (Delhi); 7. L.Bansidhar & Sons HUF 201 ITR 655 (Delhi) 8. CIT v. Vinay Bharat Ram & Sons (HUF) 261 ITR 632 (Delhi)
2.4.5 In view of the above, and considering the 'without prejudice' pleadings made by the Ld. AR as in the appellate proceedings for A.Y.2010-11 in his own case, I
5 Govindbhai L. Kakadia am of the considered opinion that the decision of the Hon'ble Supreme Court and other Courts are crystal clear that the value which could be adopted by the Ld. AO is the Municipal Ratable Value even while bringing to tax the deemed Annual Letting Value in respect of the vacant properties. The Ld. AO, is therefore, directed to verify the Municipal Ratable Value in respect of the above properties and modify his order accordingly. Ground Nos.1 to 5 are, therefore, partly allowed.”
3.1. We have gone through the cases relied upon by the Ld. CIT(A) and facts of this case and find that order of Ld. CIT(A) is in accordance with law and facts. The Ld. CIT(A) has rightly directed the AO to adopt the municipal ratable value for the purpose of determining deemed annual letting value in respect of vacant properties. We uphold the order of Ld.CIT(A) and finding, no substance in the appeal filed by the Revenue, same is hereby dismissed.
In the result, this appeal filed by the Revenue is dismissed.
Order pronounced in the open court on 3rd June, 2016.