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2017 (11) TMI 993 - AT - Income TaxDisallowance u/s 14A r.w.r. 8D(2)(ii) - Held that:- As for the disallowance under Rule 8D(2)(iii), the assessee on her own had disallowed a sum of ₹ 5 lacs in the return of income out of total administrative expenses of ₹ 40,73,576/-. The Ld. AO had not recorded any satisfaction as to how the said disallowance made by the assessee is incorrect having regard to the accounts of the assessee in terms of Section 14A(2) of the Act read with Rule 8D(1) of the Rules. Accordingly, this Tribunal held that the other disallowance under Rule 8D(2)(iii) deleted by the Ld. CIT(A) was in order and dismissed the appeal of the revenue. We find that the aforesaid finding given would squarely apply to the instant appeal also as admittedly the revenue had agitated the disallowance made under Rule 8D(2)(ii) of the Rules in the sum of ₹ 49,31,531/-. Since, this issue had already been decided by this Tribunal in assessee’s case for the assessment year 2010-11 in original assessment proceedings, there is no need to adjudicate the same again in the reassessment proceedings. Hence, the ground no. 1 raised by the Revenue is dismissed. Addition made towards rental income in respect of five shops - determination of income - ownership of shops - assessee pleaded that she is not the owner of the property and hence there could not be any charge of rental income of notional basis under the head income from house property on her - Held that:- In the instant case, the assessee had used these five shops for the purpose of her business in the capacity of sub-licensee. These facts are not in dispute. Hence there is no scope for assessment of rental income on notional basis on fair market value determined by the Inspector of Income Tax. The legislature in its wisdom had contemplated to bring to tax the rental income from properties held as stock in trade on notional basis after one year from the date on which they were acquired, and this amendment is effective only from 01.04.2018. We find similar provision was conspicuously absent previously under the Income Tax Act more particularly, under the head ‘profits and gains of business or profession’ for chargeability of notional income for five shops. Hence, we hold that the Ld. CIT(A) had rightly deleted the addition made towards rental income under the head income from house property in the instant case and accordingly, the ground no. 2 of the revenue is dismissed.
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