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2017 (6) TMI 913 - AT - Income TaxAddition on account of income from house property from a vacant property - notional income - annual value of the property computation - Held that:- When the assessee has already stated that the impugned property is used as a transit house and has also given necessary details of work being done there such as supply, etc of aluminum glazing and ACP, the rejection of this contention of the assessee is not proper. In fact the building is under furnishing itself shows that it is being used and occupied by the assessee for the purpose of the business. Even otherwise there is no evidence that property is let or being used by the assessee for any other purposes. In view of this mere rejection of the submission of the assessee cannot be used to tax the income from the impugned property. Hence, we direct AO to delete the addition on account of notional income u/s 23. Further, it is also stated that property is lying vacant therefore, according to the provisions of section 23(1)(c) it cannot be charged to tax. - Decided in favour of assessee Disallowance on account to interest to partners - Held that:- Where the drawings are deemed to have been made by the partners on day to day basis then respective profits should also have been credited on day to day basis. The ld DR could not point out any contrary decision. In the facts of the present case the opening balance of the partner capital account is ₹ 3457875/-. Profits earned during the year is ₹ 5804796/- and drawings of the partners is ₹ 2864259/- which makes the closing balance of ₹ 6398412/-. From the above figures it is apparent that profits are much higher then the drawings and therefore, the reasoning given by the coordinate bench clearly applies to the facts of the present case. Therefore, on relying on Deval Utensil Factory case [2005 (8) TMI 328 - ITAT PUNE-B ] we direct the ld Assessing Officer to delete the disallowance confirmed by ld CIT(A) on account of excess interest paid to the partners on capital.- Decided in favour of assessee Addition u/s 40A(3) - Held that:- No reason to dislodge the findings of the lower authorities in disallowance of the above, which is clear cut violation of section 40A(3) paid on 24.10.2008 in cash. - Decided against assessee
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