TaxTMI 
TaxTMI 
2025 (5) TMI 1567
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....ff by way of a common order. ITA No. 6602/MUM/2024 [Assessment Year 2010-2011] 2. We would first take up appeal preferred by the Assessee for the Assessment Year 2010-2011 which is directed against the order, dated 25/10/2024, passed by the CIT(A) whereby appeal preferred by the Assessee against the Penalty Order, dated 02/03/2022, passed under Section 271(1)(c) of the Act levying penalty of INR. 38,232/- was dismissed by the CIT(A). 3. The Assessee has raised following ground of appeal: "1. The appellant submits that the learned Commissioner of Income-tax (Appeals) ["CIT(A)"] erred in confirming levy of penalty of a sum of Rs. 38,232/- under section 271(1)(c) of the Income tax Act, 1961 (hereinafter referred as "the Act") by the Assessing Officer vide his order dated 02.03.2022 passed under section 271(1)(c) of the Act. 2. The appellant submits that the Ld. CIT (A) ought to have deleted the said penalty on a confirmation of notional deemed rent in respect of one property i.e. Flat No. 17B situated at Kalpana, Netaji Subhash Road, Marine Drive, Mumbai 400 002 by the Assessing Officer considering the order of the ITAT in appellant's own case for Assessment....
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....Flat 18'] 52.96 569.85 6,66,809/- 4.2. In appeal, the Commissioner of Income Tax (Appeals) - 54, Mumbai upheld the aforesaid addition vide order, dated 12/09/2016. 4.3. However, in appeal preferred against above order passed by the CIT(A), the Tribunal, vide Common Order dated 01/07/2019 [passed in ITA No.7216/Mum/2016 for the Assessment Year 2010-2011, ITA No.7215/Mum/2016 for the Assessment Year 2011-2012 and ITA No.7217/Mum/2016 for the Assessment Year 2012-2013] granted relief to the Assessee holding as under: "8. We have heard both the counsel and perused the records. Learned counsel referred to the additional ground and also submitted that a decision of ITAT in the case of co-owner Smt. Vidyaben Bhagwan Kotak in respect of the same flats in which she had half shareholding in Flat No. 16 & 18 at Kalpana, in which the ITAT at paragraph 10 of the said order has accepted that these flats are duplex flats used by the assessee having common staircase and hence it was held that they can be considered as one house which is adjacent to each other. This was so held by the ITAT vide order dated 20.9.2017 in ITA No. 7182 to 7186/Mum/2016. 9. Now we note t....
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....see has preferred the present appeal before the Tribunal on the grounds reproduced in paragraph 3 above. 5. We have considered the rival submission from both the sides and have perused the material on record. 6. The addition on the basis of which penalty has been levied pertains to addition of Notional Rental Income made by the Assessing Officer vide Assessment Order, dated 27/09/2021. On perusal of the same it is evident that the during the relevant previous year Assessee claimed to be co-owner of Flat 16 and Flat 18 and complete owner of Flat 17B. Before the Assessing Officer the Assessee had claimed that the three flats constituted a single residential house property which was self- occupied. The aforesaid submission of Assessee was rejected by the Assessing Officer. Flat 16 and Flat 18 were accepted by the Assessing Officer to be constituting a single residential house property which was self occupied by following the decision of the Tribunal in the case of other Co-owner of Flat 16 and Flat 18 (i.e., Smt. Vidyaben Bhagwan Kotak) passed in ITA No.7182/Mum/2016 to ITA No.7186/Mum/2013, for the Assessment Year 2006-2007 to 2010-2011, dated 20/03/2017. However, the Assessing....
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....pecifically observed that the Assessee was entitled to plan its taxation so as to minimize the burden so long as the method is not colourable. During the assessment proceedings conducted under Section 143(3) read with Section 254 of the Act,, vide letter dated 21/09/2021, the Assessee had made following submissions (reproduced in paragraph 6 of the Assessment Order, dated 27/09/2021, before the Assessing Officer: "6. In response to this notice, the assessee vide letter dated 21.09.2021 has submitted as under- "I am in receipt of a notice under section 142(1) of the Income tax Act, 1961 for Assessment Year 2010-11 as the Hon'ble ITAT had set aside the matter to the file of Assessing Officer vide its order dated 01.07.2019. In response to above notice, I have to submit as under: 1. I am the owner of the following immovable properties for the year under consideration (a) 100% share in flat No. 178 situated at Kalpana, 96/B, N. Subhash Road, Marine Drive, Mumbai 400 002. (b) 50% share in Flat No. 16 situated at Kalpana, 96/B, N. Subhash Road, Marine Drive, Mumbai 400002. (c) 1/3rd share in Flat No. 18 situated at Kalpana, 96/B, ....
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....made in respect of one of the Flat No. 18 for the Assessment Years from 2006-07 to 2009-10 as per Annexure 3. 4. Certificate dated 25.05.2018 issued by the Kalpak Co-operative housing Society Ltd., Kalpana certifying that Flat No. 16& Flat No. 178 are one single unit and the same have been recorded in the society as flat no. 16 as per Annexure 4. 5. Certificate dated 06.07.2018 issued by the Kalpak Co-operative housing Society Ltd., Kalpana certifying That Flat No. 16& 18 situated at 5th and 6th floors respectively and are used as duplex flats having a common staircase attached to both floors inside the said premises and therefore adjacent to each other as per Annexure 5." 9. We have perused the decision of the Tribunal, in the case of the Assessee for the Assessment Year 2013-2014 [in ITA No.5245/Mum/2019, dated 17/02/2021], and we find that the Tribunal had accepted the contention of the Assessee that Flat 16, Flat 18 and Flat 17B constituted as a single unit. The relevant extract of the decision of the Paragraph read as under: "2 The only issue to be decided in this appeal is with regard to determination of rental income for flat Nos. 16,18 and 17B ....
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.... of letters from Kalpak Co-operative Housing society Ltd., which states that flat Nos. 16 & 17 are one single unit and that flat Nos. 16 & 18 are used as duplex flats and are connected from inside. The ld. CIT(A) observed that however, the fact remains that all three are bought and registered as three separate units. The ld. CIT(A) also observed that the assessee herself has given the prevailing market rate of the property at Rs.60/- per sq.ft and offered the notional income at Rs. 9,96,760/- in A.Y.2014-15. The ld. CIT(A) observed that flat No.16 and flat No. 18 are two separate units in which the assessee has half undivided share and 1/3rd share respectively and that flat No.17B alone could be treated as self-occupied property. With these observations, he upheld the action of the ld. AO. However, the ld. CIT(A) gave directions to the ld. AO to verify the records and if proof of municipal payment is produced by the assessee, the assessee be given deduction thereon in accordance with the provisions of the Act from the notional rental income. 3. At the outset, we find that there is no dispute that assessee is having three properties namely 1/3 share in flat No.18, half shar....
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....on of the lower authorities. Respectfully following the decision of this Tribunal in assessee's own case and also in the case of assessee's mother-in-law referred to supra, we direct the ld. AO to delete the addition on account of notional rental income in the hands of the assessee. Accordingly, the ground Nos. 1-4 raised by the assessee are allowed." (Emphasis supplied) 10. During the course of hearing the Learned Departmental Representative had questioned the bonafide of claim made by the Assessee on the ground that Certificate, dated 25/05/2018 and 06/07/2018, were issued by the Kalpak Co-operative Housing Society Ltd. after the date of passing the assessment order for the relevant assessment year. We find that while adjudicating appeal for the year 2013-2014 (where Assessment Order under Section 143(3) of the Act was passed on 29/01/2016 - a date prior to the issuance of the aforesaid certificates), the Tribunal had taken into consideration the aforesaid certificates issued by the Kalpak Co-operative Housing Society Ltd. and had arrived at conclusion that all the three flats i.e. Flat 16, Flat 17B and Flat 18 constituted a single unit. The aforesaid finding of fact r....
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.... of income. The relevant extract of the aforesaid penalty order reads as under: "2.1. In the light................... xx xx If the assessee really was of the view that all the three flats are one single unit (as held by the ITAT in his own case for the AY 2013-14), he ought to have contested the assessment in appellate forum. By not contesting the assessment, he has deemed to have accepted the finding that Flat No. 17B is a separate independent unit. When on identical issue he has contested for other assessment years, he should have followed the same for the assessment year under consideration too However, by not doing so, he has indirectly accepted/consented with the findings arrived by the AO in his reassessment order that Flat No.17B is a separate independent unit. Therefore the addition made by the AO in treating the Flat No.17B as a separate unit is justified and the addition made by the AO clearly satisfies the fact that the assessee has concealed his particulars of income by not disclosing the rental income/deemed rental income in re....