Tribunal Upholds CIT(A)'s Deletion of Notional Rental Value Additions for AY 2013-14 and 2014-15

The Tribunal dismissed both appeals for AY 2013-14 and AY 2014-15, upholding the CIT(A)'s deletion of additions based on notional rental values computed by the AO. The Tribunal emphasized the use of Municipal Rateable Value for determining ALV and upheld the treatment of co-owned property as self-occupied. The revenue's appeal was dismissed, and the CIT(A)'s order was upheld.

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Issues Involved:
1. Delay in filing of appeal for AY 2014-15.
2. Deletion of addition of Rs. 19,24,415 being ALV computed by the AO for Flat No. 31B, Maker Tower.
3. Deletion of addition of Rs. 74,65,561 being ALV computed by the AO for Flat No. 171B, Maker Tower.
4. Adoption of 8% of the cost of the flat for computing ALV by the AO.
5. Whether the CIT(A)'s order should be set aside and the AO's order restored.

Detailed Analysis:

1. Delay in Filing of Appeal for AY 2014-15:
The registry noted a 14-day delay in filing the appeal for AY 2014-15. However, the date of communication of the order was correctly noted as 06/08/2018, making the appeal timely. Therefore, the tribunal proceeded to adjudicate the appeal on merits.

2. Deletion of Addition of Rs. 19,24,415 for Flat No. 31B, Maker Tower:
The AO computed the notional rental value of Flat No. 31B, Maker Tower, at Rs. 19,24,415, treating it as non-exempt since the assessee had already claimed another flat as self-occupied. The CIT(A) deleted this addition, relying on the precedent that if a property is not let out, its ALV cannot exceed the standard rent determined or determinable under the Rent Control Act.

3. Deletion of Addition of Rs. 74,65,561 for Flat No. 171B, Maker Tower:
The AO computed the notional rental value of Flat No. 171B, Maker Tower, at Rs. 74,65,561, based on 8% of the property cost. The CIT(A) deleted this addition, following the decision in Pramila H. Sanghvi V/s ITO, where it was held that the ALV should be based on the Municipal Rateable Value if the property is covered under the Rent Control Act.

4. Adoption of 8% of the Cost of the Flat for Computing ALV by the AO:
The AO adopted 8% of the cost of the flat for computing the ALV, which was contested by the assessee. The CIT(A) and Tribunal found that the Municipal Rateable Value should be considered as the fair rental value, supported by various judicial pronouncements and Hon'ble Bombay High Court decisions. The Tribunal upheld that the property under co-ownership was encumbered and could not be expected to be let out at fair market value, thus treating it as self-occupied.

5. Whether the CIT(A)'s Order Should be Set Aside and the AO's Order Restored:
The Tribunal found no infirmity in the CIT(A)'s order, which was based on consistent judicial precedents and logical reasoning. The revenue's appeal was dismissed, and the CIT(A)'s order was upheld.

Conclusion:
Both appeals for AY 2013-14 and AY 2014-15 were dismissed, affirming the CIT(A)'s deletion of additions based on notional rental values computed by the AO. The Tribunal emphasized the use of Municipal Rateable Value for determining ALV and upheld the treatment of co-owned property as self-occupied.

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