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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The assessee is aggrieved by the impugned order dated 25/07/2012 of the ld. First Appellate Authority, Mumbai. The first ground raised in this appeal pertains to taking the annual value at Rs.1,80,000/- for the Vallabh Tower Property, being the premises used by family members but not let out during the year.
During hearing of this appeal, the ld. counsel for the assessee, Shri Nishit Gandhi, contended that the assessee filed an RTI application for flat no. A-1102 from the Brihan Mumbai Mahanagarpalika, who vide communication dated 05/02/2016, replied that the rateable value of flat no. A-1102 in Dhruv Park CHS Ltd. is Rs.24,280/-. The ld. counsel furnished the copy of the aforesaid letter duly signed by Assistant Assessor and Collector (PN) Ward. The ld. DR, Shri Aarsi Prasad, contended that to safeguard the interest of the Revenue, this letter/communication has to be examined by the Assessing Officer.
2.1. We have considered the rival submissions and perused the material available on record. The facts, in brief, are that the assessee was having two house properties. The ld. Assessing Officer asked the assessee as to why the house property income from Vallabh Tower Property should not be added to the total income as at notional basis as the relatives of the assessee are staying in that house. The assessee vide letter dated 10/10/2011 claimed that the properties are used as a residence and the Veena Nagar flat was purchased on 26/06/1982 for Rs.62,100/- (used as a residence) and the second flat as co-owner on 09/04/2005 from Dhruv Construction is known as Vallabh Tower, wherein, the son of the assessee and other family members are using the said flat for residential purposes and the same has not been let out, by further explaining that the rateable value should be on the basis of municipal value. Broadly, we are in agreement with the explanation of the assessee that for self occupied properties, the reateable value has to be adopted on the basis of municipal valuation. Our view find supports from the latest decision of the Tribunal in Laxmi S. Jain (ITA No.4831 & 4726/Mum/2014) order dated 04/02/2016, wherein, it was held that the amount to be taxed u/s 23(1)(a) of the Act would be on the basis of rateable municipal value, where the property is self occupied. However, in view of the communication dated 05/02/2016, obtained through RTI, the ld. Assessing Officer is directed to look into the same and after providing due opportunity of being heard to the assessee, decide in accordance with law. This ground of the assessee is allowed for statistical purposes.
The next ground, raised by the assessee pertains to confirming the addition, being the payment of professional fee, from Bombay Residency Club Ltd. amounting to Rs.1 lakh reflected in the books of accounts as advanced fee (total advance fee during the year was Rs. 8 lakh). The crux of argument advanced on behalf of the assessee is that the assessee is an advocate, received consultation charges/legal fee, as advanced and the assessee is following mercantile system of accounting. It was explained that proper facts were not appreciated by the ld. Commissioner of Income Tax (Appeals) for which our attention was invited to page 6, para 4.2.3 of the impugned order. The ld. DR defended the conclusion arrived at in the impugned order.
3.1. We have considered the rival submissions and perused the material available on record. Before coming to any conclusion, we are reproducing hereunder the relevant portion, on the issue, from the impugned order.:-
“As regards the amount of Rs.1 lakh shown as advance fees, it is seen that the Bombay Presidency Radio Club Ltd. had duly deducted TDS thereon. However, the same has been claimed by the assessee as shown in the advance fees. However, in support of his claim, no evidence and reliable document is filed. Further, when as amount is shown on the basis of mercantile system, the appellant should have been shown the same as income for A.Y. 2009-10. Accordingly, the Assessing Officer was correct in making addition of Rs.1 lakh on this account, therefore, this addition is confirmed. This ground of appeal is, therefore, partly allowed.”
Before us, the ld. counsel for the assessee also contended that tax at source was duly deducted by the Club and the assessee is in a position to substantiate his claim. In view of the discussion, made in para 4.2.3. and the explanation of the assessee, we are of the view, that the issue requires fresh adjudication at the hands of the ld. Assessing Officer, therefore, we remand this issue to the file of the ld. Assessing Officer to examine the claim of the assessee and then decide in accordance with law. The assessee be given opportunity of being heard with further liberty to furnish evidence, if any, in support of his claim, thus, this ground of the assessee is allowed for statistical purposes.
Ground no.3 & 4 pertains to addition of Rs.7,99,620/-. The crux of argument advanced on behalf of the assessee is that no TDS was required to be deducted on the impugned amount as the amounts were below Rs.20,000/- and the breakup of the same was never confronted to the assessee. It was claimed that the assessee is in a position to substantiate his claim. On the other hand, the ld. DR, contended that the breakup filed before this Tribunal was not filed before the Assessing Officer/Commissioner of Income Tax (Appeals), therefore, it requires fresh look by the Assessing Officer.
4.1. We have considered the rival submissions and perused the material available on record. Considering the above facts, since the breakup of the impugned amounts was not confronted to the assessee and merely addition was made, therefore, we are of the view, that only lawful tax has to be levied/collected and since the assessee is in a position to explain the facts, therefore, both these grounds are sent to the file of ld. Assessing Officer to examine the claim of the assessee and then decide in accordance with law. Needless to mention here that due opportunity of being heard be provided to the assessee with further liberty to furnish evidence, if any, in support of his claim. Thus, this ground is also allowed for statistical purposes. Finally, this appeal of the assessee is allowed for statistical purposes only. This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 10/02/2016.