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2016 (7) TMI 1387 - AT - Income TaxDetermination of ALV of the property - Held that:- CIT (A) has thoroughly discussed the factual aspects and has found that the AO has determined the fair market value on the basis of a vague and general report of the Inspector. There was no credible and reliable evidence before the AO for arriving at the fair market value of the properties. Even, the municipal valuation of the properties was much lower than the actual rent received by the assessee. There was no evidence on record that similarly placed properties like that of the assessee were having higher rental value than that was offered by the assessee. The impugned order of the learned CIT (A) is quite elaborative and is based on a very well reasoning. We do not find any infirmity in his order while deleting the addition made by the AO in respect to the ALV of the properties question. Accordingly, we uphold the same and dismiss these grounds of appeal of the Revenue. Disallowance of expenditure u/s 14A r.w.r. 8D - assessee had claimed the netting of the interest income & expenditure and then to consider the net interest expenditure for disallowance u/s 14A - Held that:- For assessment year 2008-09 wherein the Tribunal, on identical facts and circumstances, as are in the year under consideration, has allowed the netting of interest and has held that the disallowance of interest should be made with reference to the net interest only. The Tribunal upheld the findings of the CIT (A) directing the AO to verify the figures given by the assessee and to take into consideration only net interest if any, for computation of disallowance of expenditure under Rule 8D of the Rules. The Tribunal has further upheld the findings of the learned CIT (A) allowing bifurcation of the expenses between the Head Office and Regional Offices and to re-compute the disallowance on proportionate basis relatable to the Head Office only. It has been further noted by the CIT (A) in the impugned order that the AO has followed the aforesaid decision of the Tribunal while completing the re-opened assessment for assessment year 2007-08 and regular assessment for assessment year 2010-11. The learned CIT (A) accordingly has directed the AO to verify the allocation of the expenses as well as calculation of disallowance u/s 14A of the Act read with Rule 8D of the Rules with the same methodology which has been directed to be adopted in the assessment year 2008-09. Even, similar method has been adopted by the AO for earlier assessment year 2007-08 and subsequent assessment year 2010-11. In view of the above, we do not find any infirmity in the order of the learned CIT (A) in this issue also and the same is accordingly upheld. There is no merit in the appeal of the Revenue.
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