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2022 (11) TMI 273 - AT - Income TaxValidity of order passed by CIT-A - Whether CIT(A) had not given opportunity of hearing to the assessee , which was violation of principal of Natural Justice? - HELD THAT:- On perusal of the order of the Ld.CIT(A) it is observed that the assessee’s submission has been reproduced by the Ld.CIT(A). The Ld.CIT(A) had considered the submission of the assessee before deciding the case. Assessee was granted opportunity by the Ld.CIT(A). Thus, there was no violation of natural justice. Hence, the ground number 1 of the assessee is dismissed. Addition u/s 14A r.w.r. 8D -.AR submitted that there was no exempt income earned by the assessee during the year hence there cannot be any disallowance u/s 14A - HELD THAT:- As relying on Kohinoor Project (P.) Ltd. [2020 (1) TMI 1161 - BOMBAY HIGH COURT] and Kumar Properties and Real Estate (P.) Ltd. [2021 (4) TMI 1163 - ITAT PUNE] it is held that since there was no exempt income earned during the year, no disallowance u/s 14A is called for. Accordingly Ground No.2 of the Assessee is allowed. Deemed dividend u/s 2(22)(e) - assessee has received Loan - AR submitted that the Assessee is not shareholder in Trenton Investment Company Pvt Ltd but Trenton Investment Company Pvt. Ltd is holding 99% share in the assessee company - HELD THAT:- In the case before us, the Trenton Investment Company Pvt. Ltd is 99% shareholder in the Assessee Company. The Trenton Investment Company Pvt. Ltd has given loan of Rs.1,00,00,000/- to the assessee company. Thus, the loan has been given by share holder. Therefore, provisions of Section 2(22)(e) will not be applicable to the impugned loan by Trenton Investment Company Pvt. ltd.- AO is directed to delete the said addition. Loan from Kimplas Piping System Ltd - The facts of the present case explains that Provisions of Section 2(22)(e) are attracted for the loan of Rs.Rs.11,12,387/- from Kimplas Piping System Ltd to the assessee. Therefore, respectfully following the ITAT Mumbai bench decision , we hold that the AO has rightly treated loan received from Kimplas Piping System Ltd as deemed dividend. Accordingly, impugned addition is upheld. Therefore, the Ground No.3 is partly allowed as discussed in earlier paras. Correct head of Income - Rental Income - Income from House Property or Income from other Sources - assessee had given the premises on rent along with furniture, fixtures, car parking - AO treated the said income as Income from other sources on the ground that the rent was not just for the premises but for furniture fixtures hence it was composite rent - HELD THAT:- In this case for earlier AY 2013-14 and AY 2014-15, the assessee had shown the rent as Income from House Property and department had accepted it in the order u/s 143(3). Thus, for the same premises, for earlier year department accepted it as Income from House Property. No valid reason given by the AO for changing the head of Income from Income from House Property to Income from other Sources. We are aware that the principle of Res Judicate does not apply to the income tax proceedings but principle of consistency needs to be followed when facts are same. Once Income tax department had accepted the income as Income from House property for two years, on the same facts for the same source of income, there is no reason to deviate from earlier stand. In these facts and circumstances of the case, we are of the opinion that the assessee has rightly offered the rent as Income from House property. Hence, the AO is directed to treat it as Income from house Property. As far as the difference in amount of rent offered for taxation and the amount of rent as per 26AS, the AO is directed to verify the documents and reconcile. Calculating Book Profit u/s.115JB - Addition of undisclosed rent - HELD THAT:- As relying on Forever Diamonds Pvt. Ltd [2015 (8) TMI 772 - BOMBAY HIGH COURT] it is held that the addition made by AO to Book Profit u/s.115JB is not maintainable. Hence, AO is directed to delete it. Thus, Ground No.5 of the assessee is allowed.
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