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2014 (7) TMI 510 - AT - Income TaxEnhancement of fair rental value – Let out property u/s 23(1)(a) of the Act - The rent shown to be received by the assessee is supported by the evidence in the shape of lease deeds, copy of which was duly filed before AO and is forming part of the paper book - The rent shown to have been received by the assessee is mentioned in the lease deed - assessee has been able to show that the ratable value in respect of Malabar Hill flat was less than the actual rent received by the assessee and according to the facts of the present case the annual ratable value of Malabar Hill flat is much less than the actual rent received by the assessee - any addition to actual rent will be contrary to the provisions of the Act. - No addition can be made in respect of Malabar Hill Flat In respect of Andheri Flat - if the AO is able to bring on record the evidence that annual ratable value of the Andheri flat is more than the actual rent received by the assessee, then he will be entitled to take annual ratable value in place of actual rent received by the assessee – Decided in favour of Assessee. Disallowance of interest – Held that:- Assessee could not establish nexus between the interest bearing funds and interest free advances - Relying upon CIT vs. Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - HIGH COURT BOMBAY] - if there were funds available both interest free and over draft and/or loans taken, then a presumption would arise that investment would be out of interest free funds generated or available with the company, if interest free funds were sufficient to meet the investment - Revenue was not able to point out that how the shareholder funds was utilized for the purpose of fixed assets as profit and loss account and balance sheet would not show whether the shareholder funds have been utilized for investment – Decided in favour of Assessee. Capital gain on sale of flat – LTCG or STCG – period of holding - from the date of allotment or from the date of last payment of installments - Held that:- As it has been held in CIT vs. Jindas Panchand Gandhi [2005 (9) TMI 69 - GUJARAT High Court] that the assessee will be considered to be owner of the flat on the date of allotment - facts are supported by documentary evidence filed by the assessee with the letter in the shape of possession letter, details of payments made and sale deed - the gain was assessable as long term capital gain - It could not be assessed as short term capital gain simply on the basis of so called offer by the assessee - Even the writing in the letter dated 6/12/2010 would not suggest that it was offered by the assessee - AO has insisted the assessee to write such words – Decided in favour of Assessee.
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