Income Tax Appellate Tribunal - Jaipur
Shri Anil Kumar Tak, Jaipur vs Income Tax Officer, Ward-1-3, Jaipur on 31 May, 2018
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IN THE INCOME TAX APPELLATE TRIBUNAL,
JAIPUR BENCHES, JAIPUR
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BEFORE: SHRI VIJAY PAL RAO, JM & SHRI BHAGCHAND, AM
vk;dj vihy la-@ITA No. 695/JP/2017
fu/kZkj.k o"kZ@Assessment Year: 2013-14
Shri Anil Kumar Tak cuke The ITO
358,Near Mangla Mata Temple Vs. Ward- 1(3)
Mangla Marg, Brahmpuri, Jaipur Jaipur
LFkk;h ys[kk la-@thvkbZvkj la-@PAN/GIR No.: AANPT 4888 Q
vihykFkhZ@Appellant izR;FkhZ@Respondent
fu/kZkfjrh dh vksj ls@Assessee by: Shri P.C. Parwal, CA
jktLo dh vksj ls@ Revenue by:Smt. Poonam Rai, DCIT - DR
lquokbZ dh rkjh[k@ Date of Hearing : 28/05/2018
?kks"k.kk dh rkjh[k@ Date of Pronouncement : 31/05/2018
vkns'k@ ORDER
PER BHAGCHAND, AM
This appeal filed by the assessee emanates from the order of the ld. CIT(A)-1, Jaipur dated 12-07-2017 for the Assessment Year 2013-14 raising therein following grounds of appeal.
(1) The ld. CIT(A) has erred on facts and in law in Confirming the disallowance of Rs. 17,07,294/- made by the assessee u/s 54F (1.1) The ld. CIT(A) has erred in holding that the assessee was the owner of two houses as on the date of transfer of original asset on 25.05.2012 by not accepting the contention of the assessee that before this date, assessee had gifted one of the house property to his son, Anshul Tak vide gift deed dated 10.04.2012 and thus, on the date of transfer of the original asset, ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur assessee was the owner of only one house property and that in the property gifted by the assessee, he had only ½ share and thus, not the complete owner of the property.
(2) The ld. CIT(A) has erred in confirming the addition of Rs. 84,000/- made by AO by estimating the rental income receivable from shop in Ganpati Plaza at Rs. 1,20,000/- instead of Rs. 60,000/- as estimated by the assessee 2.1 Apropos Ground No. 1 and 1.1 of the assessee, the facts as emerges from the order of the ld. CIT(A) are as under:-
''3.1.2 Determination:
(i) The brief facts of the case are that during the year under consideration, the appellant has sold two plots of land and has claimed exemption amounting to Rs. 17,07,294/- u/s 54F of the Act out of the capital gain on the sale of these two plots. The AO has disallowed the exemption claimed by the appellant u/s 54F of the Act by observing that :
• The appellant was owing two residential houses on the date of sale of the plots and • The unregistered gift deed dated 10.04.2012 wherein the appellant has gifted his share in the residential house property situated at 3550, Bariyo Ki Gali, Handipura, Jaipur to his son Anshul Tak was nothing but an afterthought.
(ii) During the appellate proceedings, it was the contention of the appellant that registration of the gift deed in not required and the transfer was complete as the donee has taken the possession of the house property under consideration on 10.04.2012 i.e. the date of execution of gift deed. It was further stated that on the date of transfer of the asset, it was having only one residential house property and the other residential house property was jointly owned by him with his son and thus the provisions of section 54F of the Act are clearly applicable in its case.
(iii) I have duly considered the submissions of the appellant, assessment order and the material placed on record. It is claimed that a gift deed was executed by the appellant in favour of his son Anshul Tak on 10.04.2012 and the possession of the same was also given on the same date and thus the transfer was complete in view of the provisions of section 2(47)(v) of the Act. It is noted that as per provisions of section 2(47)(v) of the Act, 'transfer' includes any 2 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur transaction involving the allowing of the possession of any immovable property to be taken or retained in part performance of a contract of the nature referred to in section 53A of the Transfer of Property Act, 1882 (4 of 1882). It would be appropriate to reproduce hereunder the provisions of section 53A of the transfer of property Act as under:
"53A. Part performance.--Where any person contracts to transfer for consideration any immoveable property by writing signed by him or on his behalf from which the terms necessary to constitute the transfer can be ascertained with reasonable certainty, and the transferee has, in part performance of the contract, taken possession of the property or any part thereof, or the transferee, being already in possession, continues in possession in part performance of the contract and has done some act in furtherance of the contract, and the transferee has performed or is willing to perform his part of the contract, then, notwithstanding that 2[***] where there is an instrument of transfer, that the transfer has not been completed in the manner prescribed therefore by the law for the time being in force, the transferor or any person claiming under him shall be debarred from enforcing against the transferee and persons claiming under him any right in respect of the property of which the transferee has taken or continued in possession, other than a right expressly provided by the terms of the contract: Provided that nothing in this section shall affect the rights of a transferee for consideration who has no notice of the contract or of the part performance thereof."
(iv) Thus, it is evident that section 53A of the Transfer of Property Act requires payment of part consideration for transfer of a property whereas in the case of gift, there cannot be any consideration and thus section 2(47)(v) of the Act is not applicable in the instant case under consideration. Further, it is noted that the fresh gift deed was executed on 14.03.2016 which was registered on the same date. It is to be noted that if a valid gift of immovable property was made on 10.04.2012, what was the need of executing a fresh gift deed on 14.03.2016. It appears that till 14.03.2016, the appellant was having all the rights in the immovable property. Regarding the claim of the appellant that possession of the property was also given to the done on 10.04.2012, it is to be noted that the donee is already owner of undivided 1 /2 share of the said property as the same was purchased by the donee on 03.10.2011.
(v) The contention of the appellant that it has debited the gifted property in its capital account and has shown the same in its return of income has also been examined very carefully. It is trite law that entries 3 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur in the books of accounts do not determine the nature of transaction and the substance of the transaction should prevail over its form. It may be mentioned that in the absence of a registered gift deed, the appellant was the owner of the gifted property for all practical purposes. The gift deed dated 10.04.2012 is not enforceable in a court of law in absence of its registration. The moot question is that on the basis of the gift deed dated 10.04.2012 whether the donee can dispose off the gifted property and to my mind, the answer is certainly 'No'.
(vi) The second contention of the appellant was that it was the joint owner of the said property and thus was not having more than one house on the date of transfer and thus the provisions of section 54F of the Act are applicable. It may be mentioned that vide two separate sale deeds dated 03.10.2011, the appellant and his son Mr. Anshul Tak has purchased 50% each of the undivided share in the house property 3550, Bariyo ki Gali, Chokdi Ramchandra Ji, Jaipur from two different sellers. Thus, the appellant was clearly having two separate residential house properties on the date of transfer of the asset i.e. one at house No. 358, Mangal Marg, Brahampuri, Jaipur and the second at house No. 3550, Bariyon ki Gali, Handipura, Chokdi Ram Chandraji, Jaipur It may be mentioned that the similar issue was before the Hon'ble High Court of Karnataka in the case of CIT Vs M J Siwani [2014] 46 taxmann.com 170 (Karnataka), wherein it was held that:
"Section 54F provides capital gain arising from transfer of any long term capital asset not being residential house. In view thereof, the provisions contained in section 54F as has been rightly held by the Assessing Officer and the Appellate Authority, were attracted. Under this provision, the assessee should not be in possession of a residential house on the date on which the transaction resulting in long term capital gains takes place. On the date of transaction, that is, the sale of undivided shares in the landed property the assessees were having two residential houses having one half share each therein. It is in this backdrop, the Assessing Officer as well as the Appellate Authority refused to grant any benefit either under section 54 or under section 54F of the Act in respect of capital gains income derived by the assessees. [Para 25.4] The Tribunal, however, reversed the findings of fact recorded by the authorities below holding that 'a residential house' means complete residential house and would not include shared interest in a residential house. In other words, where the properties are owned by more than one person it cannot be said that any one of them is the owner of the property. Such property, as observed by the Tribunal, continued to be of co-owners and that such joint 4 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur ownership is different from absolute ownership. Such interpretation is made by the Tribunal in the light of the language employed in section 54F of the Act, wherein, the expression 'a residential house' is used. The Tribunal also placed reliance upon the judgment of the Supreme Court to take such view in Seth Banarsi Doss Gupta v. CIT [1987]166 ITR 783/32 Taxman 112A. In this case, the Supreme Court observed that a fractional ownership was not sufficient for claiming even fractional depreciation under section 32 of the Act with effect from 1-4-1997 by ° using the expression 'owned wholly or partly'. [Para 25.5] Section 54F provides that if the assessee has a residential house he cannot seek the benefit of long term capital gain. Under this provision, merely because, the words residential house are preceded by article 'a' would not exclude a house shared with any other person. Even if the residential house is shared by an assessee, his right and ownership in the house, to whatever extent, is exclusive and nobody can take away his right in the house without due process of law. In other words, co-owner is the owner of a house in which he has share and that his right, title and interest is exclusive to the extent of his share and that he is the owner of the entire undivided house till it is partitioned. The analogy applied by the Tribunal based on the judgment of the Supreme Court in Banarsi Doss Gupta (supra), wherein, the Supreme Court considered the provisions contained in section 32 of the Act, would not apply to the facts of the present case. The right of a person, may be one half, in the residential house cannot be taken away without due process of law or it continues till there is a partition of such residential house. Thus, the view expressed by the Tribunal on this issue cannot be accepted. Thus, the order passed by revenue authorities rejecting assessee's claim was to be restored. [Para 26]"(emphasis supplied) It may further be mentioned that the SLP filed by the appellant in the above referred case was dismissed by the Hon'ble Apex Court reported in [2015] 53 taxmann.com 318 (SC)
(vii) Therefore, in view of the facts and circumstances of the case and the above judicial pronouncements, the contention of the appellant that it was not having more than one residential house as one of the house was a joint property has no weight and deserves to be rejected.'' 5 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur 2.2 During the course of hearing, the ld.AR of the assessee prayed that the ld. CIT(A) has erred in confirming the disallowance of Rs.
17,07,294/- made by the assessee u/s 54F of the Act and further erred in holding that the assessee was the owner of two houses as on the date of transfer of original asset on 25-05-2012. The ld.AR of the assessee also submitted that the assessee was the owner of only one house property and that in the property gifted by the assessee, the assessee had only ½ share and thus the assessee was not the complete owner of the property. The ld.AR of the assessee filed the following written submission as to the grounds of appeal no. 1 and 1.1.
1. From the facts stated above it can be noted that the only dispute in this ground is whether on the date of purchase of the new house at Devi Nagar, New Sanganer Road, Jaipur, assessee was the owner of two houses or one house.
2. It is submitted that before the date of purchase of new house, assessee out of his two house property owned by him, gifted the house property no. 3550 situated at Bariyon ki Gali, Handipura, Jaipur to his son Ansul Tak vide gift deed dt. 10.04.2012 executed on stamp paper and duly notarised (PB 22-26). The assessee has only ½ share in this house, the remaining ½ share being of his son Sh. Ansul Tak. From the gift deed it can be noted that assessee has transferred all his rights and interest of his ½ share in the said property to the donee. Thus, the donee became the complete owner of the entire house with the right to use the said property for his own residence or to sale the property or to transfer the property. The donee has the right to appear as the owner of the property in all Government offices like Jaipur Nagar Nigam, JVVNL, etc. The possession of the property has been handed over to Ansul Tak on 10.04.2012 who has accepted the gifted house property. The donee has shown the property in his balance sheet (PB 27). Thus, there is a transfer of gifted property by the assessee to his son in terms of section 2(47) 6 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur of the Act. The gift deed is also registered subsequently vide registry dated 14.03.2016 (PB 28-37).
3. It is a settled law that when the possession of the property has been handed over either orally or through any document, the transfer took place even though the document is registered at a later date. For this purpose reliance is placed on the following cases:-
Smt. Sajida Begum Vs. ITO (2015) 43 CCH 501 (Bang.) (Trib.) The facts of this case is that the assessee sold the vacant site for a consideration of Rs.65,65,000/- and purchased another vacant site for a sum of Rs.42,75,000/- and deposited balance capital gain in Capital Gains Account Scheme with Syndicate Bank, with view to claim exemption of entire capital gain on sale of vacant site by investing entire sale consideration received on another site and constructing residential house thereon. AO referred to provisions of section 54F and observed that under proviso to section 54F, exemption would not be allowed if assessee owned more than one residential house other than new asset on date of transfer of original asset. AO held that assessee was owner of more than one residential house on date of transfer of vacant site and hence, claim of exemption u/s 54F was not allowable. It was held that oral gift submitted by assessee could not be disregarded by revenue authorities. Stand taken by revenue was that document of gift of immovable property required registration in view of provisions of section 123 of the Transfer of Property Act r.w. section 17 of the Registration act, 1908 is not correct position in law. As far as gift in question was concerned, requirements of valid gift as per Mohammedan Law were duly satisfied in as much as there had been declaration of gift by donor and acceptance of gift by donee and delivery of possession. Delivery in this case would only be constructive. Gift in question satisfied all requirements of law and had to be held as valid in law. Since gifts were held to be valid, assessee could not be regarded as owner of property No.222 and 228 of Kadirenahalli Village. He would be owner of only one property viz., No.518, 5th Floor, Malaprabha, Koramangala, Bangalore. Therefore, the restriction in the proviso to section 54F(1) of the Act are not attracted in the case of assessee.
CIT Vs. Smt. S. Parvathavarthini Ammal (1996) 219 ITR 661 (Kerala) (HC) In this case, assessee executed gift deeds on 20th Nov., 1978 gifting certain shares in a company to her grandchildren and the transfer forms were submitted to the company on 26th Nov., 1978 and on 1st Dec., 1978. Shares were, however, registered in the donees' names on 25th Oct., 1980 because of some doubt regarding transfer of shares to minors. Tribunal as well as first appellate authority accepted the evidence of execution of gift deed as well as 7 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur genuineness thereof. On these facts, it was held that for a valid transfer (gift), a registered deed is not a must. Gift could be effective if the delivery or the subject-matter of the gift is understandable and thus, transfer of shares took place on the date of execution of transfer forms. In the present case also, since the possession of the property has been handed over to Ansul Tak vide gift deed dt. 10.04.2012, transfer of property took place on said date even though the gift deed was registered at a later date.
4. Supreme Court in case of Sh. Sanjeev La Etc. Vs. CIT 365 ITR 389 which is with reference to the provision of section 2(47) of the Act where the Hon'ble Court held as under:-
"Provisions of s 2(47) shows that when any right in respect of any capital asset is extinguished and that right is transferred to someone, it would amount to transfer of a capital asset--Intention of Legislature by virtue of s 54 is to give him relief in matter of payment of tax on long term capital gain-- Where a person gets some excess amount upon transfer of his old residential premises and thereafter purchases or constructs a new premises within time stipulated u/s 54, Legislature does not want him to be burdened with tax on the long term capital gain and therefore, relief has been given to him in respect of paying income tax on long term capital gain--Purposive interpretation should be given to provisions of Act while considering a claim for exemption from tax--In instant case sale deed could not be executed because of reasons beyond control of appellants, i.e. pendency of litigation and same was registered only on 24.9.2004 after dismissal of suit--In view of the definition of term "transfer", it can be said that some right in respect of capital asset in question had been transferred in favour of vendee--Therefore, some right which appellants had, in respect of capital asset in question, had been extinguished because after execution of the agreement to sell it was not open to appellants to sell property to someone else in accordance with law--A right in personam had been created in favour of the vendee, in whose favour agreement to sell had been executed and who had also paid Rs.15 lakhs by way of earnest money--In view of peculiar facts of case and considering definition of term 'transfer" as defined u/s 2(47), appellants were entitled to relief u/s 54 in respect of long term capital gain which they had earned in pursuance of transfer of their residential property and used for purchase of a new asset/residential house".
Therefore, on execution of the gift deed duly notarised coupled with handling over the possession of the property to the donee, the assessee remains owner of only one house property on the date of sale of the plot and therefore, it is entitled to deduction u/s 54F on purchase of another house property.
5. Otherwise also, the proviso to sec.54F is not attracted in the present case for the reason that in order to attract proviso to clause (a)(i) of 8 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur sec. 54F, the assessee should own more than one residential house, other than the new asset, on the date of transfer of the original asset. In order to attract the proviso, the assessee should be the exclusive owner of the residential property and the entire property should be residential property. Where assessee is joint owner of a property, the same should not be considered for the purpose of considering whether the assessee was having more than one house on the date of transfer of the original asset for allowing deduction u/s 54F. For this reliance is placed on the following cases:-
Dr. P. K. Vasanti Rangarajan vs. CIT (2012) 209 Taxman 628/75 DTR 0056 (Mad.)(HC) The facts and finding is as under:-
The assessee was an individual, a doctor by profession. The assessee owned a property along with her husband in equal proportion. The said property consisted of a clinic on the ground floor and a residential portion on the first floor. The assessee and her husband had shown 50% share with reference to the clinic and the residential portion in their respective returns. The assessee entered into an agreement for joint development of constructions of 8 apartments in another property owned by her individually. As per the terms of joint development agreement, the assessee had retained for herself, undivided share to extent of 50 percent and the balance of 50 percent was to be conveyed by the assessee in favor of the developer. The consideration for parting with 50 percent of the undivided share consisted of four flats as well as the sum of Rs. 10 lakhs payable by the developer.
In the returns filed, the assessee claimed exemption of Sec. 54F. The said claim was rejected. The Commissioner (Appeals) affirmed the order of Assessing Officer. On appeal, the Tribunal affirmed the order of Commissioner (Appeals). On appeal to the High Court it was held-
A reading of the provisions contained in Sec. 54F (1), as it stood at the relevant point of time, shows that exemption from payment of tax on the capital gains arising on the transfer of any long-term capital asset not being a residential house is available to an assessee being a Hindu Undivided Family or an individual, if the long-term capital gain is invested in purchasing a residential house or constructing the residential house within the time stipulated therein. Provision to Sec. 54 F (1) states that the exemption contemplated under Sec.54F(1) would not be available where an assessee owns a residential house as on the date of the transfer and that the income from the residential house is chargeable under the head 'Income from House Property'.9 ITA No.695/JP/2017
Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur The facts reveal that as joint owners of the property, the assessee and her husband had shown 50 percent share with reference to the clinic and the residential portion in their respective returns. Thus, it is clear that as on the date of the transfer, the assessee did not own a residential house in her name only, the income from which was chargeable under the head "income from house property", to bring into operation, the proviso to Sec.54F of the IT Act. The rejection of the claim for exemption would arise if only the property stands in the name of the assessee, namely, individual or HUF. Given the fact that the assessee had not owned the property in her name only to the exclusion of anybody else including the husband, but in joint name with her husband, unless and until there are materials to show that the assessee is the exclusive owner of the residential property, the bar of the proviso cannot be applied to the facts herein. Apart from that, 50 percent ownership is with reference to the clinic situated in the ground floor. As such, the entire property is not an exclusive residential property. Hence, the joint ownership of the property would not stand in the way of claiming exemption under Sec. 54F.
As far as the present case is concerned, the purchase of the property was by the individual in her own name and the property held by her as on the date of transfer, stood in the joint names of the assessee and her husband. A reading of Sec.54F of clearly points out that the holding of the residential house as on the date of transfer has relevance of the status of the assessee as an individual or HUF. On the admitted fact that the assessee herein, as an individual, does not any property in the status of an individual as on the date of transfer, the assessee's appeal is allowed."
CIT Vs. Kapil Nagpal (2016) 381 ITR 351 (Del.) (HC) Assessee filed its return claiming deduction u/s 54F. AO denied exemption on ground that assessee already owned two residential properties. It was held that at time of sale of asset, assessee was only a co-owner holding 15% share in one residential property apart from owing another residential house. Further, said house was purchased within time allowed u/s 54F. Thus, assessee duly satisfied conditions prescribed u/s 54F and his claim of deduction is to be allowed.
6. The Ld. CIT(A) has wrongly held that section 2(47)(v) is not applicable as in case of gift there is no consideration. This observation is erroneous as section 2(47)(v) nowhere provides so. In fact in case of a gift there is a transfer u/s 2(47) and therefore, for the purpose of capital gain taxation u/s 47(iii), it is not regarded as transfer. Further, the observation of the Ld. CIT(A) that in the absence of registered gift deed, the assessee was the owner of the gifted property for all practical purpose as the gift deed dt. 10.04.2012 is not enforceable in the court of law is also without any basis. Again the decision of Karnataka High Court in case of CIT vs. M.J. Siwani 10 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur holding that even if a residential house is shared by the assessee, he would be the owner of the undivided house till it was partitioned is not applicable in the facts of the present case in as much as this decision is on different facts and has not taken into consideration the decision of Madras High Court in 209 Taxman 318 and Delhi High Court in 381 ITR 351. Therefore, even in case there are two views, the view in favour of the assessee should be adopted as held by Supreme Court in case of CIT Vs. Vatika Township Pvt. Ltd. 109 DTR 33.
In view of above, disallowance confirmed by the Ld. CIT(A) be directed to be deleted.'' 2.3 On the other hand, the ld. DR supported the order of the ld.
CIT(A).
2.4 We have heard the rival contentions and perused the materials available on record. Brief facts of the case are that the assessee filed his return on 01.10.2013 declaring income of Rs.5,83,230/-. During the year he sold his Plot No.C-334 & C-335 situated at Village Macheda, Tehsil-
Ajmer, Jaipur on 25.05.2012 for sales consideration of Rs.21,93,657/-.
After claiming indexed cost at Rs.1,25,612/- and deduction u/s 54F at Rs.17,07,294/- (against investment of Rs.18,10,994/- on purchase of residential house at 301, Devi Nagar, New Sanganer Road, Jaipur), he declared long term capital gain at Rs.3,60,751/-. The AO observed that at the time of sale of plot, assessee was having two residential house (1) House No.358, Mangal Marg, Brahmpuri, Jaipur, (2) House No.3550, Bariyon ki Gali, Handipura, Chokdi Ram Chandraji, Jaipur and thus, 11 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur deduction u/s 54F is not allowable to assessee. The Assessee explained that out of the two houses, House No.3550, Bariyon ki Gali, Handipura, Jaipur was gifted to his son Ansul Tak vide gift deed dt. 10.04.2012 which is duly notarised and executed on stamp paper. The possession of the property has been handed over to the donee and he has accepted the gifted house property. The AO, however, disallowed the deduction u/s 54F by holding that gift deed is not registered and even does not bear the Notary Registration No. This shows that the claim of the assessee is after thought and the gift deed has been prepared on back date. Before the Ld. CIT(A), the assessee submitted that the house at 3550, Bariyon ki Gali, Handipura, Jaipur is jointly owned by the assessee and his son, Anshul.
The assessee gifted his share (1/2) in the property to his son, Anshul vide notarized gift deed dated 10.04.2012 (PB 22-26) who has included this in his books of accounts (PB27). The assessee also submitted a registered gift deed dated 14.03.2016 (PB 28-37). The ld. CIT(A) confirmed the disallowance of claim by giving the following reasons:
(i) Section 53A of the Transfer of Property Act requires payment of part of consideration of a property whereas in the case of gift, there cannot be any consideration and thus, Section 2(47)(v) of the Act is not applicable in the instant case.12 ITA No.695/JP/2017
Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur
(ii) If a valid gift of immovable property was made on 10.04.2012, what was the need of executing a fresh gift deed on 14.03.2016.
(iii) It is a trite law that entries in the books of accounts do not determine the nature of transaction and the substance should prevail over its form.
(iv) In absence of a registered gift deed, the appellant was the owner of the gifted property for all practical purposes. The gift deed dated 10.04.2012 is not enforceable in a court of law.
(v) The other contention of the assessee that he does not have more than one residential house as it was a joint property has no weight and deserves to be rejected as held by the Hon'ble High Court of Karnataka in case of CIT vs. M.J. Siwani (2014) 46 taxmann.com 170 and the SLP filed against this order was dismissed by the Hon'ble Supreme Court (2015) 53 taxmann.com 318.
Looking to the facts and circumstances of the case and the case laws relied on by the ld. CIT(A), we noted that the ld.AR of the assessee could not exactly controvert the findings of the ld. CIT(A) which has been explicitly dealt with on both the issues in question. In this view of the matter, we find no reason to interfere with the order of the ld. CIT(A).
Thus Ground No. 1 and 1.1 of the assessee are dismissed.
3.1 Apropos Ground No. 2 of the assessee, the facts as emerges from the order of the ld. CIT(A) are as under:-
''3.2.1 Determination
(i) The appellant owned a shop on the ground floor of a
major shopping centre at Ganpati Tower, Jaipur. Since the shop was vacant, thus the appellant has not declared any rental income from this shop. The AO has estimated the 13 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur annual value of such shop at Rs. 1,20,000/- and after allowing statutory deduction, assessed the income at Rs. 84,000/-.
(ii) During the appellate proceedings, it was submitted by the appellant that as per section 23 of the Act, annual value is deemed to be the sum for which property might reasonably be expected to let from year to year. The AO has no basis for estimating the letting value of the property at Rs. 1,20,000/-. It was submitted that the annual letting value of the shop should be taken at Rs. 60,000/-.
(iii) I have duly considered the submission of the appellant and the assessment order. It is noticed that the appellant has not provided any basis for estimating the ALV of the shop located at the ground floor of prestigious Ganapati Plaza at Rs. 60,000/-. In fact, during the assessment proceeding, the AO has issued show cause notice to the appellant for taking the ALV at Rs. 1,20,000/- which was not disputed by the appellant before the AO. Therefore, looking to the totality of facts and circumstances of the case, I do not find any reason to interfere with the findings of the AO as recorded in the assessment order. It is therefore, held that the AO was justified in taking the value of the property at Rs. 1,20,000/-. Hence, this ground of appeal is hereby rejected.'' 3.2 During the course of hearing, the ld.AR of the assessee prayed that the ld. CIT(A) has erred in confirming the addition of Rs. 84,000/- made by the AO by estimating the rental income receivable from shop in Ganpati Plaza at Rs. 1,20,000/- instead of Rs. 60,000/- as estimated by the AO for which the ld.AR of the assessee filed the following written submission.
14 ITA No.695/JP/2017Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur ''It is submitted that size of the shop is only 200 sq. ft. Its annual value is not more than Rs.60,000/- The AO without any basis has assumed it at Rs.1,20,000/-. As per section 23 of the Act, annual value is deemed to be the sum for which property might reasonably be expected to be let from year to year. The lower authorities have estimated the annual value at Rs. 1,20,000/- without any basis.'' 3.3 On the other hand, the ld. DR supported the order of the ld.
CIT(A).
3.4 We have heard the rival contentions and perused the materials available on record. Brief facts of the case are that the assessee owned a shop at Ganpati Tower, Jaipur. The shop was lying vacant and therefore, assessee has not declared any rental income from this shop. The AO estimated the annual value of such shop at Rs.1,20,000/- and after allowing the statutory deduction, assessed the income at Rs.1,20,000/-.
The ld. CIT(A) confirmed the addition by holding that the assessee has neither provided any basis for estimating the ALV of the shop at Rs.
60,000/- nor has disputed the show cause notice issued during the assessment proceedings. During the course of hearing before the Bench , the ld.AR of the assessee contended that the size of the shop is only at 200 sq. ft and its annual value is not more than Rs. 60,000/-. However, the lower authorities have estimated the annual value at Rs. 1,20,000/-
without any basis. Looking into the facts, circumstances of the case, it 15 ITA No.695/JP/2017 Shri Anil Kumar Tak vs ITO, Ward- 1(3), Jaipur will be in the interest of equity and justice to restore the issue to the file of the AO to decide it afresh taking into consideration the prevailing rent in the market of the similar size of shop at Ganapati Plaza and allow the relief to the assessee accordingly. Thus the Ground No. 2 of the assessee is allowed for Statistical purposes 4.0 In the result, the appeal of the assessee is partly allowed for Statistical purposes.
Order pronounced in the open Court on 31-05-2018.
Sd/- Sd/- ¼ fot; iky jko ½ ¼HkkxpUn½ (Vijay Pal Rao) (Bhagchand) U;kf;d lnL; /Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:- 31/05/ 2018 *Mishra
vkns'k dh izfrfyfi vxzfs "kr@Copy of the order forwarded to:
1. vihykFkhZ@The Appellant- Shri Anil Kumar Tak, Jaipur
2. izR;FkhZ@ The Respondent- The ITO, Ward- 1(3), Jaipur
3. vk;dj vk;qDr¼vihy½@ CIT(A).
4. vk;dj vk;qDr@ CIT,
5. foHkkxh; izfrfuf/k] vk;dj vihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur
6. xkMZ QkbZy@ Guard File (ITA No. 695/JP/2017) vkns'kkuqlkj@ By order, lgk;d iathdkj@ Assistant. Registrar 16