Sunil Chopra, New Delhi vs Department Of Income Tax

I.T.A. No. 339/DEL/2013 A.Y. : 2007-08 ACIT, CIRCLE 33(1), VS. SH. SUNIL CHOPRA, NEW DELHI D-10, MAIN VIKAS MARG, TH ROOM NO. 1505, 15 FLOOR, DR. LAXMI NAGAR, SHYAMA PRASAD MUKHERJEE, NEW DELHI - 110 092 CIVIC CENTRE, (PAN: ABAPC4200F) NEW DELHI (APPELLANT) (RESPONDENT)

Department by : Sh. B.R.R. KUMAR, Sr. DR Assessee by : Sh. Ashwani Taneja, Advocate

Date of Hearing : 04-03-2015 Date of Order : 05-03-2015

ORDER

PER GEORGE GEORGE K : JM

This Appeal at the instance of the Department is directed

against the Order of the Ld. CIT(A) dated 26.10.2012. The relevant

assessment year is 2007-08.

2. The effective grounds raised by the Department reads as

follows:-

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"1. On the facts and in the circumstances of the case, the CIT(A) has erred in law and on facts in restricting to Rs. 6,30,000/- out of total addition of Rs. 21,00,000/-

made by the Assessing Officer on account of notional rent from farm house.

2. On the facts and in the circumstances of the case, the CIT(A) has erred in law in admitting additional evidence in violation of Rule 46A of the I.T. Rule, 1961.

3. The order of the CIT(A) is erroneous and is not tenable on facts and in law.

4. The appellant craves leave to add, alter or amend any / all of the grounds of appeal before or during the course of the hearing of the appeal.

3. The assessee is an individual, filed his return of income on

31.10.2007 declaring total income of Rs. 33,08,170/-. The

assessment u/s. 143(3) of the I.T. Act was completed on 31.12.2009

fixing the total income at Rs. 55,77,570/-. The AO had made the

addition of Rs. 21,00,000/-, considering the same from "income from

house property" i.e. Farm House situated at Jonapur Village,

Mehrauli, New Delhi.

4. The brief facts in respect to the addition are as follows:-

"The Assessing Officer in the course of assessment proceedings noticed that assessee was the owner of a Farm House in Mehrauli, New Delhi and had not shown any income under the head "income from house property" i.e. from Farm House. Accordingly, AO issued 2 ITA NO.339/Del/2013

show cause notice to the assessee as to why notional income from Farm House should not be taken @Rs. 3.5 lakhs per month, on the basis of the enquiries got conducted by him through the Inspector of the Ward. The assessee filed objections stating therein that the Farm House is an agricultural property and the same is not registered in his name. As regards value of Rs. 3.5 lakhs is concerned, it was submitted that the prevailing rent in the area is not more than Rs. 50,000/- per month and he had enclosed few quotations from the Real Estate Brokers operating in the aforesaid area. The AO, however, rejected the objections raised by the Assessee and fixed the rates @Rs.2.5 lakhs per month and accordingly added a sum of Rs. 21 lakhs as "income from house property" i.e. from Farm House."

5. The assessee being aggrieved with the order of the Assessing

Officer, preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A)

rejected the assessee's contention stating that it is not liable to be

assessed under the head "income from house property" on the

aforesaid Farm House, since it is an agricultural property. Ld. CIT(A)

also rejected the assessee's contention that the above-said property

is not registered in the name of the assessee. Ld. CIT(A), however,

accepted the additional evidences with reference to the valuation of

the property being Annual Letting Value (ALV) fixed by the Municipal

Corporation as on 1.12.2005. The Ld. CIT(A) in the course of

appellate proceedings had called for the Remand Report from the

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Assessing Officer and on receipt of the same, accepted the notional

rent @ Rs. 75,000/- per month, being the ALV fixed by the Municipal

Corporation.

6. The Revenue being aggrieved is in Appeal before us.

7. Ld. Departmental Representative relied on the assessment

order.

8. Ld. Counsel of the Assessee on the other hand reiterated the

submissions made before the Income Tax Authorities and relied

upon the order of the impugned finding of the Ld. CIT(A).

9. We have heard the rival submissions and perused the material

on record. We find that the Assessing Officer while fixing the

notional rent value at Rs. 2.5 lakhs per month from the Farm House

has not given the basis for arriving at the figure. Though, he stated

that it is on the basis of the enquiry got conducted by the Inspector

of the Ward. The Report of the Inspector was not put to the

assessee for his rebuttal. The value of Rs. 75,000/- per month as

fixed by the Ld. CIT(A) is based on the ALV fixed by the Municipal

Corporation as on 1.12.2005, which is very much reasonable and

justified. Therefore, we are of the view that the Ld. CIT(A) was

justified in estimating the notional rent of Rs. 75,000/- per month of

the aforesaid Farm House, which is based on the ALV fixed by the

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Municipal Corporation. Hence, the Ground No. 1 raised by the

Revenue is rejected.

10. With reference to Ground NO. 2 is concerned, the Ld. CIT(A)

has admitted the additional evidences giving the following reasons:-

"I have considered the averments made by the AO but I do not agree with the argument of the AO, as if any evidence could not be filed though it was gathered by the Assessee only when the addition was made by the AO, and is relevant to decide any ground of appeal, and more particularly that specific evidence was not asked by the AO during the course of assessment proceedings, the evidence gathered even after the date of assessment should have been admitted in the interest of natural justice to be awarded. In view of these reasons, the additional evidences filed by the appellant are admitted."

10.1 In this case the additional evidences have been admitted by

the Ld. CIT(A) in the interest of natural justice and equity. The

additional evidences admitted on record is nothing, but the ALV

fixed by the Municipal Corporation, which is an accurate valuation

fixed by the Joint Assessor and Collector of MCD, Delhi. After

admitting the additional evidences, the Ld. CIT(A) had called for the

Remand Report from the AO. The AO in his Remand Report has not

per se faulted the ALV fixed by the Municipal Corporation, therefore,

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we see no reason to interfere with the Order of the Ld. CIT(A) in

admitting the additional evidences. Hence, the ground No. 2 raised

by the Revenue is rejected.

11. In the result, the Appeal filed by the Revenue stands

dismissed.

Order pronounced in the Open Court on 05/3/2015.

Sd/- Sd/-

[G.D. AGRAWAL ] [GEORGE GEORGE K.] VICE PRESIDENT JUDICIAL MEMBER

Date 05/3/2015 "SRBHATNAGAR" Copy forwarded to: - 1. Appellant -

2. Respondent - 3. CIT 4. CIT (A) 5. DR, ITAT

TRUE COPY By Order,

Assistant Registrar, ITAT, Delhi Benches

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