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TMI Blog2019 (11) TMI 545X X X X Extracts X X X X X X X X Extracts X X X X ..... ich he determines the annual rental value for the said flat at ₹ 7,20,000/-. In our opinion, the Assessing Officer rightly ignored the valuation determined by the municipal authority in the year 1994. - I.T.A No.1807/Kol/2016 (Assessment Year: 2011-12) - - - Dated:- 1-10-2019 - Shri P. M. Jagtap, Vice President And Shri S.S. Viswanethra Ravi, Judicial Member For the Appellant: Shri Amit Saraj, FCA For the Respondent: Shri Nicolas Murmu, Addl. CIT, DR ORDER Shri S.S. Viswanethra Ravi, JM: This appeal by the assessee against the order dated 01.06.2016 passed by the Commissioner of Income Tax (Appeals)-10, Kolkata [ CIT(A) ] for Assessment Year 2011-12. 2. The only issue is to be decided as to whether the CIT(A) is justified in restricting the addition to an extent of ₹ 2,13,216/- on account of notional rental value in the facts and circumstances of the case. 3. Brief facts emanating on the record relating to the issue on hand are that the assessee is an individual and derives income from salary non-speculative business and income from other s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the case, it is to be seen whether the Ld AO is allowed to adopt any other rate when the assessee has been able to offer the Municipal value of the House Property. However, in this case, it is seen that the Municipal Value offered was for the point of purchase during 1994, almost sixteen years prior to the subject A.Y 2011-12. Neither the ld. A.O nor the Ld. AR have said anything in the matter, whether the Municipal Value had been revised since, a very possible requirement in determining the reasonable rent at the relevant point in time. Further, I am unable to agree with the argument of the Ld A.R that the appellant's issue is covered by the decision of the Hon'ble Calcutta High Court in case of CIT vs. Satya Co. Ltd reported in [1997] 140 CTR Cal 569, wherein it was held by the Hon'ble High Court that when municipal valuation of the premises in question was made available and such valuation was not disputed by the revenue, then the same should be adopted as the annual letting value of the property. Firstly, I find that the Municipal Value offered was for a very old point of time, and secondly I find that the matter was disputed by the Assessing Officer in clear te ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (Cal), CIT v. Hemraj Mahabir Prasad Ltd. reported in [2005] 148 taxman 623(Cal.), in the case of CIT vs. Satya Co. Ltd. reported in [1994] 75 taxman 193 (Cal.), in the case of Dr. Balkrishna R. Naik v. JCIT of Mumbai Bench of ITAT reported in [2005] 1 SOT 177 (Mum.), in the case of Dr. Balkrishna R. Naik v. ITO of Mumbai Bench of ITAT in ITA No.3632/Mum/2011, in the case of CIT v. Smt. Prabhabati Bansali of High Court of Calcutta reported in [1982] 9 taxman 244 (Calcutta). 6. The ld. DR., Shri Nicolas Murmu, vehemently opposed the order of CIT(A) and relied on the order of Assessing Officer. 7. Heard both parties and persued the material available on record. We find that as rightly pointed out by the ld. A.O the value certificate was relied by the assessee has been determined by the Municipal authority w.e.f. 01.10.1994. The Assessing Officer having taking into consideration the area in which the property is located, did not accept the valuation determined by the Municipal Authority and determined the issue by taking information by relevant websites and deputing one of his inspectors. The Hon ble High Court of Delhi in the case of CIT vs. Moni Kumar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emed to be expected reasonable rent or rent received / receivable. The assessee has taken Flat L 32, Mumbai as self occupied property. The assessee has submitted a written submission on 06.03.2013 and furnished Kolkata Municipal Corporation tax bill where the annual valuation of the Flat 2C, situated at 12/2A/2B/2C at Ballygunge Park Road has declared ₹ 64,800/-. The assessee has mentioned in his reply that annual value as determined by Municipal Authority shall be yardstick. In favour of his reply he has quoted some case laws. The reply of the assessee is considered but not acceptable. The Municipal Corporation issued two types of valuation, one for owner and another for rental. Rental municipal valuation rate of that period may be taken for notional rental income. The assessee has submitted the ownership municipal value of ₹ 64,80/- (which is very less) shown as per property tax bill issued by Kolkata Municipal Corporation in which date of effect was 01.10.1994 which is not relevant to current assessment year. Also the tax bill submitted by the assessee is ownership valuation rate instead of rental valuation rate. As per purchase ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , it would be subject to the condition that the annual value fixed bears a close proximity with the assessment year in question in respect of which the assessment is to be made under the Income Tax laws. If there is a change in circumstances because of passage of time, viz., the annual value was fixed by the Municipal Authorities much earlier in point of time on the basis of rent than received, this may not provide a safe yardstick if in the Assessment Year in question when assessment is to be made under Income Tax Act. In a given situation, the Hon ble High Court of Delhi was pleased to hold that the Assessing Officer can ignore the municipal valuation for determining annual letting value if he finds that the same is not based on relevant material for determining the fair rent in the market and there is sufficient material on record for taking a different valuation. The relevant portion of which is reproduced hereinbelow: 16. Since the provisions of fixation of annual rent under the Delhi Municipal Corporation Act are pari materia of Section 23 of the Act, we are inclined to accept the aforesaid view of the Calcutta High Court in Satya Co. Ltd. (supra) that in suc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... if he finds that the same is not based on relevant material for determining the fair rent in the market and there is sufficient material on record for taking a different valuation. In the present case as discussed above, the assessee relied on the valuation as determined by the Municipal authority way back in 1994 and in our opinion the said valuation is not at all relevant nor is a base to determine the valuation of the property relating to the assessment year under consideration i.e. F.Y 2010-11 (A.Y 2011-12). Accordingly the Assessing Officer did not accept such valuation and proceeded to elicit information from relevant websites and deputing his Inspector basing on which he determines the annual rental value for the said flat at ₹ 7,20,000/-. In our opinion, the Assessing Officer rightly ignored the valuation determined by the municipal authority in the year 1994. Thus the ratio laid down by the Full Bench of Hon ble High Court of Delhi is applicable in the facts and circumstances of the case. In view of the same, we set aside the order of the CIT(A) and restore the order of Assessing Officer. Ground Nos.1 2 raised by the assessee are dismissed. 10. In t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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