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Income Tax Appellate Tribunal, MUMBAI BENCHES “A”, MUMBAI
आदेश / O R D E R
Per Joginder Singh (Judicial Member) The Revenue as well as assessee is in across appeal against the impugned order dated 24/03/2014 of assessment year 2010-11of the Ld. First Appellate Authority, Mumbai. First, we shall take up appeal of the assessee, wherein, confirming the assessment order to the extent of municipal rateable value at Rs.10,12,858/- as against municipal rateable value of Rs.8,44,048/-, offered by the assessee for the premises at central garden complex has been challenged and further the annual letting value of the premises at creative industrial centre premises cooperative society at Rs.3,94,508/- against Rs.4,497/-, offered by the assessee, which is based on municipal rateable value.
During hearing of these appeals, Shri Anuj Kishnadwala, ld. counsel for the assessee, contended that the Tribunal, identically, decided the issue for A.Y. 2009-10. The assessee furnished the copy of the order dated 26/11/2014 (ITA No.2118/Mum/2012), wherein, the appeal of the Revenue was dismissed. This factual matrix was not controverted by Shri G. N. Makwana, ld. counsel for the assessee.
2.1. 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 from the order of the Tribunal dated 26/11/2014 for ready reference and analysis:-
This appeal filed by the Revenue on 30.3.2012 is against the order of the CIT(A)-41, Mumbai dated 9.1.2012 for the assessment year 2009-2010.
2. In this appeal , Revenue raised the following grounds which read as under:
“1. Whether on the facts and in the circumstances of the case and in law, the Ld CIT (A) was justified in holding that rateable value as determined by the municipal authorities shall be yard stick by following the order of the Hon’ble Bombay High Court in the case of Smitaben N. Ambani vs. CWT 323 ITR 104. By doing so, he has ignored the decision in the following cases wherein it has been held that the annual letting value as determined by the municipal authorities is only one of the facts and the same can be ignored if it does not reflect the true ALV. These decisions are: 1. ITO vs. Spearhead Properties (P) Ltd. 46 SOT 208 2. Tivoli Investment and Trading company Pvt Ltd vs. ACIT 130 ITD 521 3. ITO vs. Hansa motor works 46 SOT 160
2. Whether on the facts and in the circumstances of the case and in law, the Ld CIT (A) was justified in holding that the determination of ALV of House property of Rs.1,65,51,632/- (3,94,508 + 1,61,57,124) jis not correct and same cannot be exceed Rs. 94,181/- (5,880 + 88,301) i.e., ALV as determined by municipal corporation when in the present case there are evidences to suggest that the AO23.12.2010.”
Briefly stated relevant facts of the case are that the assessee is an individual and filed the return showing the house property income on account of couple of properties ie., (i) Gala No.311 and (ii) Central Garden Complex. In the return of income, for the purpose of computation of ALV of the properties, assessee relied on the rateable values of these properties. AO completed the assessment u/s 143(3) of the and rejected the computation of ALV of the said properties and held that a percentage of investment in the properties should reflect correct ALV. Accordingly, he quantified the ALVs and the cumulative ALV of the properties was taken at Rs. 1,65,51,632/- (Galas ALV is Rs. 3,94,508/- and Rs.1,61,57,124/- is the ALV of other properties). Otherwise, assessee’s computation in this regard worked out at Rs.94,181/- ie., Galas rateable value is Rs.5,880/- and other properties is Rs.88,301/-. AO relied on the Inspector’s report of comparable cases in this regard. Aggrieved with the same, assessee is in appeal before the first appellate authority.
During the proceedings before the first appellate authority, CIT (A) rejected the AO’s method of computation of ALV of the said two properties and upheld the assessee’s rateable value. For this, CIT(A) relied on various decisions including the judgment of the jurisdictional High Court in the case of Smitaben N Ambani vs. CWT, 323 ITR 104 wherein it was held that rateable value of the properties determined by the Municipal Authorities shall be the yard stick. Aggrieved with the decision of the CIT (A), Revenue is in appeal before the Tribunal by raising the above mentioned grounds.
During the proceedings before us, Ld DR relied on various decisions to state that the ALV as determined by the Municipal Authorities is only one of the factors and same can be ignored if it does not reflect the true ALV. Ld DR relied on the order of the AO.
On the other hand, Ld Counsel for the asssessee heavily relied on the order of the CIT(A) and reiterated the submissions made before the lower authorities.
We have heard both the parties and perused the orders of the Revenue Authorities as well as the relevant material placed before us. On hearing both the parties and on perusal of the orders of the Revenue Authorities, we find that the CIT (A) has rightly relied on the binding judgment of the Hon’ble jurisdictional High Court in the case of Smitaben N Ambani (supra). There are many other decisions from the jurisdictional High Court in the similar lines, the copies of which are placed in the paper book of the asssessee. The Revenue has not demonstrated that the facts of the assessee’s case are covered by the decisions cited in ground no.1 of the present appeal.
Considering the binding nature of the jurisdictional High Court judgment in the case of Smitaben N Ambani (supra), we are of the opinion that the finding of the CIT (A) is an Order and it does not call for any interference on this issue. In any case, the percentage of investment in the impugned properties is no basis for arriving at the ALV of the properties. Accordingly, the grounds raised by the Revenue are dismissed.
8. In the result, appeal of the Revenue is dismissed.
During assessment proceedings, it was observed by the ld. Assessing Officer that the assessee has declared net annual value of office premises no.311 at creative Industrial Centre and flats at Central Garden Complex, as per municipal rateable value at Rs.8,48,545/- and the same were shown as vacant. The ld. Assessing Officer invoked the provisions of section 23(1)(a) of the Act on the premise that the annual value of the property deemed to be the sum for which the property might reasonably be expected to let out from year to year, therefore, the municipal valuation is not binding upon the Department for determining the reasonable rent, by following the decision in ITO vs Makrupa Chemicals Pvt. Ltd. 108 ITD 95 (Bom.). The ld. Assessing Officer hold that the rateable value adopted by the assessee, as per municipal laws, is not reasonable within the meaning of section 23(1)(a) of the Act. Without going into much deliberation, we find that in the aforesaid case of the assessee itself, the Tribunal, for A.Y. 2009-10, the appeal of the Revenue was dismissed, affirming the stand of the ld. Commissioner of Income Tax (Appeals). In such a situation, one fact is oozing out that unless and until contrary facts are brought on record, no other decision is expected to be taken. It is also noted that while coming to the conclusion, event the ld. First Appellate Authority relied upon the binding decision of Hon’ble jurisdictional High Court in the case of Samitaben N Ambani vs CWT (323 ITR 104) (Bom.). Before us, also, the Revenue has not demonstrated that the facts of the case of the assessee are covered by the aforesaid decision. Even otherwise, the judicial principle says that consistency has to be maintained. Our view find supports from the ratio laid down in following decisions:- i. Parshuram Pottery Works Ltd. vs ITO 106 ITR 1 (SC) ii. Security Printers 264 ITR 276(Del.) iii. CIT vs Neo Polypack Pvt. Ltd. 245 ITR 492 (Del.) iv. CWT vs Allied Finance Pvt. Ltd. 289 ITR 318 (Del.) v. Berger Paints India Ltd. vs CIT 266 ITR 99 (SC) vi. DCIT vs United Vanaspati (275 ITR 124) (AT)(Chandigarh ITAT) vii. Union of India vs Kumudini N. Dalal 249 ITR 219 (SC) viii. Union of India vs Satish Pannalal Shah 249 ITR 221 ix. B.F.Varghese vs State of Kerala 72 ITR 726 (Ker.) x. CIT vs Narendra Doshi 254 ITR 606 (SC) xi. CIT vs Shivsagar Estate 257 ITR 59 (SC) xii. Pradip Ramanlal Seth vs UOI 204 ITR 866 (Guj.) xiii. Radhaswamy Satsang vs CIT 193 ITR 321 (SC) xiv. Aggarwal warehousing & Leasing Ltd. 257 ITR 235 (MP) The sum and substance of the aforesaid judicial pronouncements is that on the basis of principle of judicial discipline, consistency has to be followed and once in a particular year, if any view is taken, in the absence of any contrary material, no contrary view is to be taken as finality to the litigation is also a principle which has to be followed. Before us, no contrary facts or any adverse material was brought on record by the Revenue, therefore, we find merit in the argument of the ld. counsel for the assessee, because, in the aforesaid order dated 26/11/2014, the Tribunal on identical facts, dismissed the appeal of the Revenue, affirming the stand of the ld. First Appellate Authority. It is also noted that in the cases of Shri Satyapal Jain (husband of the assessee) for A.Y. 2006-07 (ITA No.2719/Mum/2013 identically for A.Y. 2007-08 (ITA No.2718/Mum/2013) ) order dated 26/11/2015, Harsh Jain (Nephew of the assessee) (ITA No.2710/Mum/2013) order dated 17/07/2015, A.Y. 2009-10, Anand Jain (Brother-in-law of the assessee) (ITA No.2709/Mum/2013) order dated 17/04/2015 and Ramiti Devi Jain (Mother-in-law) for A.Ys. 2005-06 and 2006-07 (ITA Nos. 3268 and 3269/Mum/2011) order dated 25/04/2012 held that the amount is to be taxed u/s 23(1)(a) of the Act and would be rateable at municipal value. In view of this uncontroverted position, appeal of the assessee is allowed.
3. In the appeal of the Revenue ( Department has challenged the valuation by saying that the yardstick followed by Hon’ble jurisdiction High Court in 323 ITR 104 (supra) can be ignored, in view of the decision in ITO vs Spearhead Properties Pvt. ltd. 46 SOT 208, in Tivoli Investment and Trading Company Pvt. Ltd. vs ACIT 130 ITR 521 and in ITO vs Hansa Motors Works. 46 SOT 160. Without going into much deliberation, we have already deliberated upon the issue in the foregoing paras of the order (in the appeal of the assessee), therefore, on the same reasoning, we find no merit in the appeal of the Revenue.
Finally, the appeal of the assessee is allowed and that of the Revenue is dismissed.
This Order was pronounced in the open court in the presence of ld. representatives from both sides at the conclusion of the hearing on 03/02/2016.