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2014 (1) TMI 900 - AT - Income TaxDeletion made on notional interest - Interest free security deposit into rental income Unexplained expenditure Held that:- Despite the directions by the CIT(A), the Assessing Officer did not choose to determine the fair/market rental value of the property by making necessary enquiries, the rental income offered by the assessee is to be treated as the fair/market rental income or the Annual Letting Value of the property Relying upon COMMISSIONER OF INCOME TAX, Versus MONI KUMAR SUBBA & Miracle Exporters P. Ltd. [2011 (3) TMI 497 - DELHI HIGH COURT] - the notional interest on the interest free security deposit cannot be taken as determining factor to arrive at the fair rent - The AO did not choose to comply the same and to make enquiries regarding the fair rental value of the property, the assessee cannot be harassed by prolonging the matter further on the issue, especially when, the AO himself has chosen not to make such enquiry - even for the previous year as well as for the subsequent year no objection has been raised by the revenue regarding the Annual Letting Value and the amount of rental income shown by the assessee has been accepted for the said years - There is no evidence on the file that annual rental value of the property was higher during the relevant year than that declared by the assessee the order of the CIT(A) upheld Decided against Revenue. Unexplained expenditure Held that:- Though the CIT(A) has observed that the transactions as noted above were made by the assessee, has deleted the addition made by the AO in this respect - the finding portion of the order of learned CIT(A) is in contradiction to the factual finding - the matter on this issue is restored back to the learned CIT(A) to verify as to whether there was any mistake while giving the factual findings given in this respect and to give his findings afresh on the issue after giving both the parties opportunity of hearing Decided partly in favour of Assessee.
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