Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (9) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (9) TMI 66 - AT - Income TaxMode of computation of ALV of House - dis allowing deduction of interest from house property income as the same interest is taxed under the head income from other sources also - Held that:- Assessee was receiving a monthly rent of ₹ 2,20,000/- upto 30.7.1999 & thereafter the assessee received an interest free deposit of ₹ 2.25 crores from the licencee. That assessee’s share in the interest free deposit at ₹ 45 lakhs, was deposited in the Savings Bank account with Standard Chartered bank which was simultaneously transferred to the fixed deposit account with Standard Chartered bank on 4th August, 1999. For the period from 1.8.1999 to 31.3.2000, the assessee received interest income of ₹ 2,70,000/- which has been offered for tax under the head ‘ income from other sources’. Considering these facts the direct nexus has been established by the assessee - the lower authorities have not brought anything on record to establish that the rent & interest free deposit was a sham transaction to circumvent real rent. As decided in Sundeep Exports (P) Ltd. Versus ITO [2011 (2) TMI 316 - ITAT, Mumbai ] ALV adopted by Municipal rateable value should be the determining factor for applying provisions of Sec. 23(1)(a) - Thus the ALV adopted by the municipal authorities should be taken into consideration and the matter is restored back to the file of the AO to verify the Municipal rateable value of the property and if the actual rent received by the assessee is more than the municipal rateable value, then to adopt the actual rent of the ALV of the property. Disallow deduction on interest from house property income - Held that:- As the same interest has been taxed under the head income from other sources also there is a direct nexus of interest received on Fixed deposit vis-à-vis the security deposit, therefore the same interest cannot be considered for computing house property income more so we have also held that ALV has to be determined as per the municipal rateable value or actual rent whichever is higher. Determination of the annual let out value of 7 flates at Sunbeam building - Held that:- Municipal rateable value shall be taken into consideration for determining the ALV comparing it with the actual rent whichever is higher shall be taken it as income under the head income from house property. Applying the same principle, the matter is restored back to the file of the AO directing the AO to verify the municipal rateable value of 7 flats - appeal in favour of assessee for statistical purposes.
|