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2015 (2) TMI 168 - AT - Income TaxIncome from house property - inclusion of notional interest on the interest free security deposit received from the licencee of the house property, for the purpose of computing the ALV of the said property - Held that:- It is a settled proposition of law by virtue of the judgment in the case of J.K. Investors [2000 (6) TMI 9 - BOMBAY High Court] and Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT] that the notional interest should not be included while computing the income from house property under section 23(1)(a) and (b) of the Act. It is also a settled proposition that actual rent received or receivable by the land lord constitutes a reliable evidence to ascertain the properties’ capacity to earn the rent in open market. The forms should be accepted unless the Assessing Officer has contrary evidence to suggest the deflation of rental income by extraneous consideration. Also when the interest income earned by the assessee on the said security deposits deposited with the banks the same is offered to tax, the inclusion of such interest on the said deposits for the purpose of ALV amounts to double taxation. - Decided in favour of the assessee. Deduction representing the maintenance expenses paid to the societies - Held that:- On perusal of the decision of the Tribunal in the case of Aloo Bejan Daver (2011 (4) TMI 1277 - ITAT MUMBAI) we find it is categorically mentioned that the "maintenance charges" are to be deducted from the gross rent to arrive at the ALV of the property. For this proposition, the Tribunal relied on the decision of the Coordinate Bench in the case of Varma Family Trust ( 1983 (10) TMI 79 - ITAT BOMBAY-A) as well as the decision of the ITAT in the case of Sharmilla Tagore vs. JCIT (2004 (6) TMI 591 - ITAT MUMBAI). This order of the Tribunal has referred to the jurisdictional High Court judgment in the case of J.K. Investors (Bombay) Ltd [ 2000 (6) TMI 9 - BOMBAY High Court]. The said judgment of Hon’ble High Court is relevant for exclusion of outgoings, being liabilities of the assessee in view of section 23(1)(b) of the Act. -Decided in faaour of assessee. Applicability of the provisions of section 145A to the unutilized MODVAT - Held that:- The word "inventory" shall include opening stock as well as closing stock. ssue was decided in favour of the assessee and the Assessing Officer was directed by the ITATto recomputed the profits after making adjustments with reference to opening stock, purchases as well as the sales. - Decided in favour of assessee for statistical purposes. Disallowance of lease rentals - Held that:- despite few adjustments to the leased agreement relevant for the AY under consideration, the essential facts relating to the ownership of the vehicle i.e., the ownership remains the lessor and therefore, the lease in question constitutes operating lease. Therefore, the lease rentals paid by the assessee constitutes an allowable expenditure.- Decided in favour of assessee. Disallowance with regard to the employees contribution to PF and ESIC - claim allowed by CIT(A) - Held that:- It is a settled position of the issue that the payments made by the assessee towards PF and ESIC are eligible for deduction if the same have been made on or before the due date of filing of return of income. As well the due date includes the grace period. Undisputed fact is that the assessee made the payments within the said grace period prior to the due date filing of the return of income. Therefore, we find no infirmity in the decision of the CIT (A) in allowing the assessee’s appeal. - Decided against revenue.
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