9911796707
|
Home
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2024 (2) TMI 526 - AT - Income TaxIncome from house property - determination of annual letting value (ALV) of the of the vacant portion of the property situated at 2 nd , 3 rd and 4 th floors of the premises of the assessee - HELD THAT - Admittedly, the assessee is the owner of Nithin Complex, which is a commercial property, consisting of the ground and four floors, having the total vacant area of 24000 sft and out of the said 24000 sft, 9000 sft was let out by the assessee and the remaining area of 15,000 sft was lying vacant during the year under consideration. Out of the said 15000 sft, 12000 sft was on the 3rd and 4th floors wherein 3000 sft was on the first floor and 2nd floor. In our opinion, the area which was situated on the 1st and 2nd floors being situated on the same floor, the adjoining floors are required to fetch the similar rent which are being received by the assessee on the adjoining properties situated at ground, 1st and 2nd floors. In our view, the ALV of 3000 sft of the area lying vacant on 1 st and 2 nd floors are required to be determined by applying the rate of Rs. 38/- per sft. Remaining area of 12000 sft situated at 3 rd and 4 th floors of the property - As seen Municipal Rental Value (MRV) as claimed by the assessee was in the range of Rs. 5/- per sft whereas assessee has let out the portion to the Girls hostel @ Rs. 10/- per sft and the AO has claimed ALV @ Rs. 38/- per sft. Properties situated on 3rd and 4th floors of the property will definitely fetch less rent when compared with ground and 1st floors of the property because 3rd and 4th floors are not connected with lift and the occupants have to climb three stairs to reach the point and even the 3rd and 4th floors of the property are not in use for so many years and are lying vacant for many years and therefore, the ALV taken by the AO and confirmed by the CIT(A) are, in our view, was on the higher side and are required to be estimated. Since the property of the assessee is situated in a remote area of Anantapuram, it cannot be possible for the Assessing Officer to find out comparable premises which is situated at 3rd and 4th floors - we have to estimate the ALV taking the question of the lettable value as taken by the municipal rental value of the Girls hostel and also the rent which was fetched by the assessee from the ground and 1st floor. Having observed the above, it came to our notice that the ld.CIT(A) had noted that the assessee was asked to furnish the rejoinder to the comments of the Assessing Officer. However, the assessee has not given any reply to the rejoinder and only submitted that the appeal for A.Y. 2012-13 is pending for adjudication, raising the identical issue before the Tribunal and fixed for hearing on 25.07.2023. In our view, once the appeal of the assessee for A.Y. 2012-13 has been dismissed by the Tribunal for the reasons mentioned therein, we do not find any reason to give relief to the assessee on the grounds raised before us. In case, the Tribunal while hearing the M.A. filed by the assessee, recalls the order then the assessee may file the application to recall the present order on this issue. In view of the above, the grounds raised by the assessee are dismissed. Unexplained cash deposits u/s 68 - Onus to prove - HELD THAT - AO made addition the in the hands of the assessee for the cash deposited in her account. However, in the appellate proceedings and in the remand report, it was admitted by the Assessing Officer that the assessee had withdrawn the amount from the firm, and deposited the said amount in her bank account. Thus, the assessee was able to demonstrate the availability of cash and the source thereof. AO has not doubted the availability of the cash or its source. Therefore, in our view, no addition can be made in the hands of the assessee, more particularly, when the assessee has withdrawn the amount from the partnership firm in which she was a partner and deposited the withdrawn amount on the same date in her bank account. Assessee was able to discharge her onus. - Decided in favour of assessee.
Issues Involved:
1. Opportunity to file a rejoinder to the remand report. 2. Addition towards annual value of vacant portions of house property. 3. Deduction towards vacancy allowance. 4. Reasonable expected rent for vacant portions. 5. Municipal Rentable Value as ALV of vacant portions. 6. Treatment of hire charges from leasing Plant & Machinery. 7. Disallowance of depreciation on Plant & Machinery. 8. Addition of unexplained cash credits. Summary: 1. Opportunity to File a Rejoinder: The assessee contended that the Commissioner of Income Tax (Appeals) ("Ld.CIT(A)") did not provide an opportunity to file a rejoinder to the remand report submitted by the Assessing Officer. The Tribunal did not make a specific ruling on this procedural issue. 2. Addition Towards Annual Value of Vacant Portions: The Ld.CIT(A) confirmed an addition of Rs. 68,70,717/- made by the Assessing Officer towards the annual value of the vacant portions of the house property, which was consequently confirmed under the head 'Income from house property' at Rs. 48,09,502/-. The Tribunal upheld the Ld.CIT(A)'s decision, noting that the assessee failed to provide sufficient evidence to counter the Assessing Officer's valuation. 3. Deduction Towards Vacancy Allowance: The assessee argued that the addition was made without considering the deduction towards vacancy allowance as per Section 23(1)(c) of the Income Tax Act. The Tribunal found that the assessee did not qualify for this deduction as the property was not let out during the relevant period. 4. Reasonable Expected Rent for Vacant Portions: The Tribunal observed that the ALV should be based on Municipal Rentable Value (MRV) or comparable lettable value. The Tribunal noted that the properties on the 3rd and 4th floors would fetch less rent compared to lower floors and estimated the ALV accordingly. 5. Municipal Rentable Value as ALV: The Tribunal agreed with the assessee's contention that MRV should be considered for determining the ALV of the vacant portions. However, due to the lack of comparable properties, the Tribunal estimated the ALV based on the rent fetched by the lower floors and the MRV provided. 6. Treatment of Hire Charges from Leasing Plant & Machinery: The assessee withdrew grounds related to the treatment of hire charges from leasing Plant & Machinery as income from house property instead of business income, and the Tribunal dismissed these grounds as not pressed. 7. Disallowance of Depreciation on Plant & Machinery: Similarly, the assessee withdrew the ground related to the disallowance of depreciation on Plant & Machinery, and the Tribunal dismissed this ground as not pressed. 8. Addition of Unexplained Cash Credits: The Tribunal found that the assessee had adequately demonstrated the source of cash deposits amounting to Rs. 32,00,000/- in her bank account, which were withdrawn from M/s. Nithin Sai Constructions, where she was a partner. The Tribunal ruled that the addition made by the Assessing Officer as unexplained cash credits under Section 68 was not justified and allowed this ground in favor of the assessee. Conclusion: The appeal was partly allowed, with the Tribunal upholding the additions related to the annual value of vacant portions but allowing the ground related to unexplained cash credits. The Tribunal's decision was pronounced on 18th January, 2024.
|
