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2013 (7) TMI 253 - AT - Income TaxIncome From House Property - enhancement of annual let out value - notional interest on deposits - municipal valuation is less than the value of actual rent - Held that:- Clause (c) of the section 23 will not apply here as none of the properties in question remained vacant during whole or any part of the previous year. Even clause (a) will also not apply as it is applicable in those cases where property has not been let out at all during the entire year and in such a case, it has to be ascertained as to what could be the rent which property might reasonably be accepted to be let out from year to year. In the present case, clause (b) would be applicable because the property was let out and rent was received. The Tribunal in Manisha R. Jaisingh (2012 (5) TMI 159 - ITAT MUMBAI) held that if the actual rent received is more than municipal valuation of the property, then the actual rent received or receivable will be taken as annual letting value of the property within the meaning of section 23(1)(b). Also see Moni Kumar Subba (2011 (3) TMI 497 - DELHI HIGH COURT) which came to the conclusion that notional interest cannot form part of the actual rent. In the present case, assessee had submitted that the municipal valuation of both the properties is now available which is less than the value of actual rent received in the interest of justice, this issue needs to be restored back. Disallowance of administrative expenses - Held that:- On perusal of the expenses, as found that it is not clear as to what are the expenses which have been incurred on account of income from house property and what have been incurred for the purpose of maintaining the corporate entity. If the expenses are directly related to earning of income from house property the same will not be allowed as the statute itself provides standard deduction and other deduction under section 24. However, it cannot be denied that certain expenses are required for maintaining a corporate status, which can be allowed from income from other sources under section 57. On a perusal of these expenses, it is seen that it is very difficult to bifurcate such expenses and, therefore, this issue needs to be restored back to the file of the AO. Set-off of carry forward of deprecation against income for the year disallowed - Held that:- While computing the income of the assessee AO has computed the business income at Rs. 82,07,075 and from there has reduced various incomes aggregating to Rs. 82,85,313 which were not forming part of the business income. The unabsorbed carried forward of the depreciation which is coming from earlier years, has not been set-off either in this year or has been allowed to be carried forward in the subsequent year. If the assessee had not earned any business income in this year, unabsorbed depreciation from the earlier years has to be allowed to be carried forward to the subsequent years. Since there is no proper finding of the Assessing Officer as to why unabsorbed depreciation of the earlier year has not been allowed to be carried forward in the subsequent years, therefore, this issue also needs to be restore back to the file of the AO for examination. Assessee's appeals are partly allowed for statistical purposes.
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