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2014 (4) TMI 1269 - AT - Income TaxEnhancement of the income taxable under the head income from house property by CIT-A - decision of the Ld.CIT(A) directing the AO to compute the annual value by taking 8.5% of the total investment of the property for the purpose of calculating the income from house property - HELD THAT:- Sub section 2 of section 251 require that Commissioner (Appeals) shall not enhance the assessment or a penalty or reduce the amount of free fund unless the appellant has reasonable opportunity to show cause against such enhancement. In the present case, it is observed that the requirement of the said sub section is not fulfilled by the Ld.CIT(A) by not providing necessary opportunity to the assessee. Therefore, in the interest of justice we are of the opinion that it is just and fair that the case may be re-adjudicated by the Ld.CIT(A) by providing a reasonable opportunity of being heard to the assessee. Accordingly, Grounds No. 1 to 3 are allowed for statistical purpose. Disallowance of 10% of telephone expenses and disallowance of 10% of vehicle expenses - Addition as partly confirmed by the Ld.CIT(A) on the 20% disallowance made by the AO on the said expenses - HELD THAT:- As observed that the said ad hoc disallowances have been made by the AO which has been partly confirmed by the Ld.CIT(A) is on account of involvement of personal use. Considering the entirety of facts, we are of the opinion that the said ad hoc disallowances may be restricted to 5% of the telephone expenses & vehicle expenses, respectively, which would justify the case of the assessee. We direct and order accordingly. Accordingly, Grounds No. 4 and 5 are partly allowed.
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