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Mahesh Kumar Sharma,49, Maulana Azad Housing Society Parwana Road,Pitampura, Delhi 34 vs. ITO, Ward-25(1),New Delhi 110002
July, 28th 2012
                                                                    I.T.A. NO. 2874/DEL/2011


                       DELHI BENCH "SMC": NEW DELHI


                            ITA No. 2874/Del/2011
                                A.Y. : 2004-05

Mahesh Kumar Sharma,                              vs.   ITO, Ward-25(1),
49, Maulana Azad Housing Society,                       New Delhi ­ 110002
Parwana Road,
Pitampura, Delhi ­ 34
(PAN : AAUPS9415P)

(Appellant)                                                   (Respondent)

                    Assessee by       :           Sh. Vimal Kumar Grover, CA
                    Department by     :           Dr. B.R.R. Kumar, Sr. D.R.

     This appeal by the Assessee is directed against the order of the
Ld. Commissioner of Income Tax (Appeals)-XXIV, New Delhi                            dated
01.4.2011 pertaining to assessment year 2004-05.

2.   The grounds of appeal read as under:-

              "1.   The order passed by Ld. CIT(A) u/s. 246 is erroneous,
                    wrong, against the law and facts of the case and
                    hence liable to be quashed.

              2.    The Ld. CIT (A) were erred in disposing off the Ground
                    No.   2,6,7,8   and       9    together   not     individually.      In
                    collective disposal the Ld. CIT had forgotten to dispose
                    off the ground raised that the assessee is not the real
                    owner of the property but claiming back his legal
                    ownership as well as possession through legal battle.

                                            I.T.A. NO. 2874/DEL/2011

     The assessee is not the real owner of the property D-
     465, Gali Mandir wali, Village Azadpur, Near Railway
     Lines, Delhi 110033. This concept of real ownership
     has been discussed in detail by Apex Court in CIT v
     Podar Cement (P) Ltd. 226 ITR 625 (SC) 1997.

3.   The Ld. CIT (A) had wrongly relied on Ld. A.O.'s reliance
     on affidavit filed by Assessee before ADJ Delhi for
     holding that the assessee is the owner, despite
     knowing the fact that the A.O. had no other option but
     to rely on Affidavit filed by the assessee before ADJ as
     he had reopened case U/S 147. The Affidavit filed
     before ADJ Delhi is for claiming back the ownership of
     the property. Right nom the assessee has no real

4.   The Ld. CIT (A) and Ld. A.O. did not throw light on the
     point that the assessee the owner of D-465 where as
     the assessee's brother has fraudulently converted the
     property as B-497 and holding registered sale deed in
     his wife's name from father Sh. Zile Singh as well as
     possession of the property. When D-465 does exist
     even as per Ward 25(1) Inspector's report then how
     can it be charged to U/S 22 of the Income Tax Act.
     Again, the Ld. CIT (A) does not put any reliance on
     report demanded from Inspector Ward 25(1). The Ld.
     CIT (A) is erred in re on A.O.'s remand report which is
     just a compilation of reports demanded Inspector,
     Delhi Municipal Corporation, Delhi Jal Board and BSES.

                                                       I.T.A. NO. 2874/DEL/2011

                   Ld. A.O had not concluded any thing from these

3.   In this case, the Assessing Officer on the basis of the information
that the assessee, as per his affidavit filed before the Hon'ble High
Court, as detailed in the impugned order, had stated that he was
receiving   rent     directly   and   or   through   his    father      (now
deceased)/younger brother from the property situated at Azadpur Gali
Mandir, New Delhi, but not showing any income derived from this
property in his return, initiated reassessment proceedings after
recording reasons. In response to the notice u/s. 148 of the Act, the
assessee submitted that the original return filed by him may be treated
as the return filed in response to the notice u/s. 148 of the Act. During
the assessment proceedings, the assessee submitted that he has filed
an affidavit for repossession of the property, as per legal requirement
suggested by the counsel engaged for that case.        The possession of
the property under reference was forcefully taken over by his younger
brother; therefore, that affidavit was filed to claim the repossession of
the property. However, the assessee requested the Assessing Officer
to assess the income from the house property on the notional basis as
per the income tax laws.              Accordingly, the Assessing Officer
assessed income of ` 1,40,000/- from his house          property on the
notional basis by determining annual value of the property at ` 2.00
lakhs on the basis of the inspector's report.

4.   Upon assessee's appeal Ld. Commissioner of Income Tax (A)
observed that Assessing Officer       held the assessee to be the legal
owner. Ld. Commissioner of Income Tax (A) noted that the issue was
sub-judice. However, he proceeded to observe that with due respect

                                                           I.T.A. NO. 2874/DEL/2011

to the jugement of the Hon'ble Court where this issue is sub-judiced,
for adjudication of this    appeal, he found merit in the            Assessing
Officer's finding that assessee is a legal owner as far as income tax is
concerned on the basis of the above mentioned submission of the
assessee and the Assessing Officer's             remand report.               Ld.
Commissioner of Income Tax (A)             further observed that since the
Assessing Officer    has started reassessment proceedings on the basis
of content of the affidavit, therefore, Ld. Commissioner of Income Tax
(A) opined that Assessing Officer has to rely wholly on the content of
the affidavit and not partly as he has no choice to do that after
reopening the assessment.         Ld. Commissioner of Income Tax (A)
further observed that Inspector's Report         did   not consider various
factors determining rent of the property; location, old tenants not
vacating property, dispute of ownership, etc.          Even the comparative
cases were not cited for determining the annual value         by the ITI.     Ld.
Commissioner of Income Tax (A) opined that he was of the considered
view that annual value of the property cannot be more than ` 60,000/-
in the relevant year.      Hence, Ld. Commissioner of Income Tax (A)
held that the assessable income of the          house property therefore,
works out to ` 42,000/- in place of ` 1,40,000/- assessed by the
Assessing Officer.   Accordingly, Assessing Officer was directed to give
relief of ` 98000/- to the assessee.

5.   Against the above order the assessee is in appeal before me.

6.   I have heard the rival contentions in light of the material
produced and precedent relied upon.         I find that Assessing Officer in
this case has held that     assessee is a owner of the property on the
basis of an affidavit filed by the assessee in the Court for repossession

                                                            I.T.A. NO. 2874/DEL/2011

of the property during the year.     There was some dispute of assessee
with his brother and to strengthen his case, on the advise of the legal
counselor assessee filed affidavit before the Court that the property
belonged to him.         The decision of the Court is still pending as the
matter is sub-judice.     Under the circumstances, in my             considered
opinion, Ld. Commissioner of Income Tax (A) misdirected himself when
he observed that for income tax purposes, the assessee is a legal
owner of the property.    In my considered opinion,         the matter is sub-
judice and in light of the above facts and      circumstances of the case,
assessee cannot be said to be a legal owner of the property. Under the
circumstances, I set aside the orders of the authorities below and
decide the issue in favour of the assessee.

7.     In the result, the appeal filed by the assessee stands allowed.
        Order pronounced in the open court on 26/7/2012.

                                                     [SHAMIM YAHYA]
                                                  ACCOUNTANT MEMBER
Date: 26/7/2012
Copy forwarded to: -
1.     Appellant   2.   Respondent   3.   CIT   4.CIT (A)    5.     DR, ITAT
                             TRUE COPY                       By Order,

                                     Assistant Registrar, ITAT, Delhi Benches

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