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2007 (1) TMI 211 - AT - Income TaxDetermination of ALV - let out a commercial space on an annual rent - interest-free security deposit - Income From House Property or Not - HELD THAT:- In the instant case admittedly neither the assessee has given the annual letting value as determined under the provisions of Municipal Corporation Act or NDMC Act or under the Rent Control Act nor the Assessing Officer has determined the same u/s 23(1)(a) of the Act as observed in our order herein above, hence, we set aside the orders of tax authorities below and direct the Assessing Officer to recompute the ALV of the property-in term of section 23(1)(a) of the Act by considering the Municipal Valuation as per the MCD Act/By-Laws or NDMC Act/By-Laws or under Delhi Rent Control Act whichever is applicable in the instant case of the assessee and thereafter in case he finds the ALV of the property so determined to be higher than the actual rent declared by the assessee the rental income should be enhanced accordingly and in case he finds the rent declared by the assessee to be higher than the ALV so determined by the Assessing Officer then he should accept the same and should not make any addition in this regard. In the result the Ground No. 1 of the appeal filed by the assessee stands allowed partly for statistical purpose. Disallowance to personnel and administrative expenses - In the instant case since the assessee has furnished the complete details of expenses incurred by the assessee for the business of the assessee, in our opinion, the tax authorities below were not justified in making the ad hoc proportionate disallowance of these expenses without identifying any such expenditure having been incurred by the assessee for administrative and personnel purposes and more so, when according to the assessee he was simply receiving rent from the tenant, which was deposited in the bank account of the assessee for which it has not incurred any separate expenditure. Thus, the ad hoc proportionate disallowance sustained by the CIT(A) in this regard cannot be upheld and, therefore, the order of CIT(A) in this regard is set aside and Ground No. 2 of the assessee's appeal is allowed. Disallowance of telephone expenses, car expenses/depreciation - HELD THAT:- We hold that the CIT(A) was not justified in upholding the order of Assessing Officer wherein a case of a company he disallowed the expenses claimed by the assessee-company with regard to telephone and car/depreciation treating the same to be of personal nature. Accordingly, the order of CIT(A) in this regard is set aside and the disallowances sustained by the CIT(A) in this regard are deleted. Ground No. 3 of the assessee's appeal is allowed. In the result, the appeal filed by the assessee is partly allowed.
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