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2019 (8) TMI 445 - AT - Income TaxDetermination of ALV of house property @10% of original cost of property - House property - HELD THAT:- We find that the Tribunal has considered identical issue for AY 2009-10 and after considering relevant facts and also by following the decision in the case of CIT vs. TIP TOP Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT] has restored the issue to the file of the AO for Denavo adjudication in light of findings of the Hon’ble Bombay High Court that the AO is not bound by Municipal reatable Value, but he can proceed to determine ALV of the house property on the basis of market rate prevailing as on the date. Adhoc disallowance of business promotion expenses - AO has disallowed business promotion expenses on the ground that a similar disallowance has been made for AY 2006-07 by considering the fact that the assessee has debited various business promotion expenses which are in personal nature like hotel expenses, entertainment expenses, gifts and restaurant bills and by no stretch of imagination it can be construed to be incurred for business purpose - HELD THAT:- Tribunal has considered identical issue and after considering relevant facts came to the conclusion that considering nature of business of the assessee expenditure incurred towards business promotion is in significant and also it is a customary that the assessee which is in the entertainment business has to incurred certain expenditure for the customers/clients to keep them in good relations - In this view of the matter and consistent with view taken by the Coordinate bench, we direct the AO to delete the additions towards business promotions expenses. Addition u/s 14A - disallowance of expenditure incurred in relation to exempt income - HELD THAT:- This year, the assessee has made out a case with necessary details that its own funds is in excess of investments in shares, therefore, no part of interest bearing funds has been used to make investments in shares consequently, no disallowance could be made in respect of interest expenditure. We direct the AO to delete additions made towards proportionate interest expenditure under Rule 8D(2)(ii) I.T. Rules 1962. In so far as disallowance of expenditure under Rule 8D(2)(iii) @ 0.5% of average value of investments, we find that the Tribunal has sustained additions made by the AO towards other expenses on the ground that no convincing arguments have been made either before lower authorities or before us. Facts remain unchanged. Assessee failed to controvert the findings of facts recorded by the Tribunal is incorrect with any evidences. We are of the considered view that there is no error in the findings of fact recorded by the CIT(A) in respect of disallowance of other expenses being 0.5% of average value of investments and hence, the same is confirmed. - Appeal filed by the assessee is partly allowed for statistical purposes.
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