The Mumbai Bench of the Income Tax Appellate Tribunal (ITAT) held that 30% standard deduction is allowable on annual let out value of house property owned by Moraj Group Co-Founder Priya Mohan Gurnani.
A batch of seven appeals were filed by the assessee Ms Priya Mohan Gurnani [Assessee/ Appellant], Director and Co-Founder of Moraj Group for assessment year 2010-11 to 2016-17 involving certain common issues emanating from the same search.
Both the parties submitted that appeals involve common grounds, identical facts and circumstances for all those years. Therefore, the authorized representative argued all the matters raising similar contentions, the departmental representative also defended the orders of
the lower authorities raising similar arguments for all these years.
Therefore, the appeals were disposed of by this common order.
The Assessee was represented by CA Pradip Kapasi and Revenue by Manoj kumar Sinha, Senior Department Representative.
Facts show that an appellant is an individual assessed to income tax. She derives income from salary, house property, business and income from other sources by maintaining regular books of accounts.
Search and seizure action under Section 132 of the Income Tax Act was carried on 4/2/2016. Therefore the assessment for assessment year 2010-11 to 2014-15 were carried out by issuing a notice under Section 153A of the Income Tax Act and for assessment year 2015-16 and 2016-17 carried out under Section 153A read with Section 143(3) of the Income Tax Act.
On the first claim with respect to the standard rent or rateable value should be taken to arrive at the annual let out value of the property, the CIT – A had held that that appellant is owner of flat
number 13 and flat number 14 of model House operating housing society, Sion, Mumbai.
It was also submitted that, in the further alternative without prejudice, the annual value should have been restricted to lower of the standard rent or municipal value, which should have further been reduced by the municipal tax paid and by standard deduction under Section 24 at the rate of 30% of adjusted Annual Let out Value and the appellant further submits that no material of whatsoever nature was found and/or seized during the course of search under Section 132 of the act in the hands of your appellant and that the addition of ₹227,625/– deemed income from house property made in the order were in respect of the items and issues that were settled in the original assessment and therefore were not the subject matter of the special assessment under Section 153A of the Income Tax Act.
With respect to the deduction of Municipal taxes, there is no requirement for reducing the income of the assessee where the assessing officer has estimated the percentage of the cost of the equity as rate of return on the investment.
In fact, the deduction of municipal taxes is inbuilt in the taxability of 5% estimated by the assessing officer.
“With respect to granting deduction of 30% we find that such deduction is available u/s 24 (a) of the Act. This deduction is unqualified and assessee is eligible for the same. No reasons are shown to us why the assessee is the same”, tribunal bench of Shri Prashant Maharishi, Accountant Member and Kavitha Rajagopal, Judicial Member observed.
The Tribunal Bench thus directed the Assessing Officer to grant deduction of 30% of annual value to the assessee in terms of provision of section 24 (a) of the Act.
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