MANJU R. YAGNIK,MUMBAI vs. CIT 20, MUMBAI

Common grievance of the assessee relates to confirming the addition of Rs.1,40,000/- made by the AO by allowing only part of the 2 & 5430&5431/14 house as Self Occupied House Property without any proper and justifiable reasons.

Rival contentions have been heard and record perused. Briefly stated. the facts of the case are that the assessee is a Vice Chairperson of Nahar Group. She is a Director in three companies. viz. M/s. Nahar Builders & Developers Ltd .. M/s. Hindustan Tyres Pvt. Ltd. and M/s.Ved Finance Pvt. Ltd. Besides. the assessee is a shareholder in two companies. viz. M/s. Hipeak Impex Pvt. Ltd. and M/s. Nahar Construction Pvt. Ltd and is also a partner in the firm M/s. Vijaya Textiles. The assessee filed her return of income for the year under consideration u/s.139(1) of the Act on 30/11/2009. declaring total income of Rs.1,07,40,591/-. Subsequently a search action u/s.132(1) of the Act and survey actions u/s.133A, of the Act were conducted on "Nahar Group" of cases on 2/2/2012. and assessee's premises at 601, Siddharth Apartments. Opp. Venus Society. Mumbai was also covered u/s.132 of the Act. In pursuance of the search assessee’s case was assigned to the Aa. who issued a notice u/s.153A of the Act on 13/9/2012. In response to the said notice. the assessee filed a return of income on 10/10/2012. declaring total undisclosed income at Rs.2.23.81,302/-. Thereafter. assessment proceedings were taken up and the AO noticed that as per assessee’s Balance Sheet, she owned Flat Nos.1301, 1302, 1303, 1304, 1401, 1402, 1403 & 1404 at Viola. Alba. Nahar Amrit Shakti. Chandivali. Andheri(East), Mumbai jointly with her husband Shri Rajesh Yagnik. While Flat Nos.1401 to 1404 had been let out and income from these properties 3 & 5430&5431/14 had been offered to tax. the appellant had claimed the jointly owned Flat Nos.1301 to 1304. which constituted four house properties as self- occupied. The AO observed that the assessee was residing at another Flat No.601. Siddharth Apartments, Worli Seaface, Mumbai which was covered under the search and she had not brought any material on record in support of her claim the Flat Nos.130 1 to 1304 were self-occupied. Before the AO. the assessee contended that the four flats constituted one house property and therefore, she was entitled to claim the said flats as SOP. However, the AO rejected the contention of the assessee and treated only Flat No.1301 as SOP and then estimated the annual value in respect of Flat Nos.1302 to 1304 at Rs.2,00,000/- in the hands of the appellant (50%) considering the rent fetched in respect of Flat Nos. 1401 to 1404 in the same building, which were also jointly owned by the assessee with her husband and were let out. Accordingly, the AO computed assessee’s income from these properties at Rs.1,40,000/-, after allowing statutory deduction u/s.24 of the Act @ 30% at Rs.60,000/-, and the said amount was added to assessee’s total income.

From the record we found that four small units were purchased by assessee and after removing the internal wall, which was converted into one commercial to residential for personal purpose of assessee, however, the AO did not accept assessee’s contention and held that four units were purchased by assessee, therefore, has to be considered as a separate units and declined part of the assesse’s claim on account of self-occupied property.