9911796707
TMI Blog2022 (1) TMI 290X X X X Extracts X X X X X X X X Extracts X X X X ..... ining to property No.101B and 101C after credit for excess property tax of ₹ 20,40,956/-. AO got confused for the reason that three properties were given on rent to one tenant out of which 1 property is owned by a Private Limited Company and two properties are owned by the assessee jointly along with his brother. The assessee has claimed only 50% share of property tax which pertains to properties owned by assessee and his brother. The Assessing Officer has incorrectly computed that assessee should be entitled to deduction only of ₹ 15,16,568/-. In facts assessee is correctly eligible to claim deduction of house tax of ₹ 20,40,956/- . In view of this there is no excess deduction claimed and allowed to assessee. AO has wrongly construed Rent agreement and confused him as rent agreement was with one common tenant for three premises owned by two different owners, one of the property is jointly owned by the assessee with 50 % share. CIT (A) also confirmed the action of the ld AO without giving any reason but merely upholding views of ld AO confirmed the order of assessment. - ITA No. 429/Mum/2020 - - - Dated:- 6-1-2022 - SRI VIKAS AWASTHY, JM AND SRI PRASHANT MA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee in the assessment proceedings and the appellate proceedings on assumptions and presumptions without appreciating that the assessee did not receive any rent from the lessee for the month of March, 2009. 7. The Ld. CIT (A) erred in law and on facts in confirming the disallowance made by the assessing officer of Rs. as excess municipal taxes claimed on conjectures and surmises without appreciating the submissions of the assessee in the assessment proceedings as well the appellate proceedings and the evidences furnished by the assessee. 8. The Ld. CIT (A) erred in law and on facts in upholding the disallowance of municipal taxes of ₹ 8,77,820/- stating that the assessee had not furnished the property agreements though the ownership was never doubted and there were two properties jointly owned by the assessee with his brother which were given on rent and the municipal taxes for the said properties having 50% share of the assessee was claimed by the assessee for which necessary evidences were furnished. Thus, the disallowance should be deleted. 03. Fact of the case shows that assessee is an individual derived income from house property. He filed his re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d the addition of ₹ 4,96,125/- on account of escapement of rent and addition on account of excess municipal taxes claimed of ₹ 8,77,820/-. Aggrieved with that assessee is in appeal before us. 07. The learned AR submitted a paper book containing 92 pages adverting ground No. 2. He submitted that reopening of the assessment is illegal and deserves to be quashed. He referred to the reasons recorded and submitted that the assessment under section 143(3) of the Act for Assessment Year 2009-10 has already been concluded. The reason clearly shows that there is no tangible material found into the possession of the Assessing Officer for reopening of assessment. Reading the reasons recorded, he submitted that the Assessing Officer has reopened assessment on perusal of the same material which is available before him at the time of original assessment. He further referred to reply dated 17.10.2011 submitted before the Assessing Officer which is placed at page No. 14 of the Paper Book. By this letter, assessee has submitted the complete details of rental income and all agreement with the tenants. Therefore, he submitted that Assessing Officer has passed the assessment order after ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rned assessing officer has taken the total house property tax payable with respect to all these three premises. He submitted that Assessing Officer has considered the property tax for office No. 101A also which was owned by other party i.e. Excelsior private limited and not by assessee. He submitted that income from rent is of only for office number 101B and 101C which is owned by the assessee along with his brother and therefore assessee is also eligible for deduction of municipal taxes only with respect to that property i.e. office number 101C and 101B. He submitted that ratio of 32.17 % calculated by the ld AO is on incorrect facts. He submitted that assessee has correctly claimed the above deduction. He extensively referred the bills of property taxes, copy of invoices for all the three properties along with ledger accounts. The learned assessing officer has held that as the share in the rental income is 32.17% of the assessee, assessee is also eligible for deduction of house tax paid for all the three properties in that proportion. Thus he submitted that the rent agreement does not provide that assessee is entitled to the rate of 32.17% of the total rent received of both the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eamble that property number 101A is owned by excelsior travels private limited and property number 101B and 101C by assessee along with his brother. The rental agreement as per clause 3 provides that the assessee is entitled for the monthly rent of ₹ 7,08,750/- + service tax. Thus from the above facts it is apparent that the observations of learned assessing officer that all three properties were rented out for a monthly rent of Rs. 2,203,000 and assessee received ₹ 708750/- , therefore , assessee received 32.17% of the total rent is incorrect. This is just an arithmetical calculation made by ld AO that is incorrect. In fact, assessee received his share of Rent, which is ₹ 708750/- per month of property no 101 B and 101C @ 50 % . The learned assessing officer further noted incorrectly that the total rent receivable from the above mentioned property is Rs. 8,505,000 [ 708750 * 12] however the assessee has declared total rental income of only Rs. 77,96,250/- from the property. During the course of assessment proceedings assessee has submitted the copy of the rent account, the Ledger of the tenant. It is apparent that opening balance of ₹ 28,35,000 of securi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings, we do not have any hesitation in holding that the assumption of jurisdiction by the Assessing Officer under section148 of the Act is not in proper. Accordingly, we quash the reassessment proceedings. 13. On the merits, it is apparent that assessee has received rent only for 11 months and for one month, property of assessee was vacant. There is no under assessment in case of rental income offered by the assessee. 14. With respect to the claim of deduction of the property tax it is apparent that assessee has claimed the 50% of property tax pertaining to property No.101B and 101C after credit for excess property tax of ₹ 20,40,956/-. The learned Assessing Officer got confused for the reason that three properties were given on rent to one tenant out of which 1 property is owned by a Private Limited Company and two properties are owned by the assessee jointly along with his brother. The assessee has claimed only 50% share of property tax which pertains to properties owned by assessee and his brother. The Assessing Officer has incorrectly computed that assessee should be entitled to deduction only of ₹ 15,16,568/-. In facts assessee is correctly eligible to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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