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2018 (9) TMI 109 - HC - Income TaxDisallowance u/s 14A r.w.r. 8D - Tribunal invalidating the decision of AO who disallowed certain expenditure claimed by the assessee under Section 14A - Held that:- No reason to interfere with the Tribunal’s decision on the same issue in relation to assessment year 2007-08, when Rule 8D of the Income Tax Rules 1962 had not become operational and the Tribunal found on fact that the expenditure already disallowed was sufficient. Apply the block assets concept in respect of certain properties of the assessee - Tribunal opined that block assets concept ought to be applied in terms of Section 32 in case of the assessee - No error in law on the part of the Tribunal in its decision on this point. Determination of annual value of certain property of the assessee, being a firm house near New Delhi - Held that:- The assessing officer had undertaken a valuation exercise to come to his conclusion that the rent disclosed by the assessee is much lower than the market value. He has referred to a website www. 99acres. com. from which he has referred to higher figures of rent. But this Court has consistently held that agreed rent would be the determinant factor for valuation and not the rent revealed from the market search. The authorities on this point are Commissioner of Income Tax Vs. Kishanlal and Sons (Udyog) Pvt. Ltd. [2002 (10) TMI 62 - CALCUTTA HIGH COURT] and Commissioner of Income Tax vs. Indra Co. Ltd. [2003 (12) TMI 25 - CALCUTTA HIGH COURT]. The point urged by the Revenue is thus covered. We decline to admit the appeal of the Revenue on this point also. We admit the appeal on the following point, which in our opinion, involves substantial question of law:- “Whether the assessing officer had properly construed the provisions of Section 14A in rejecting the assessee’s claim of deduction for business expenditure and applying the formula in Rule 8D of the Income Tax, 1962, which decision was ultimately overruled by the Tribunal?"
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