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2019 (11) TMI 1221 - AT - Income TaxIncome from House Property - addition on account of notional rent of unsold area - taxation of notional rental income relating to the unsold area of the Mall built by the assessee - HELD THAT:- It is evident that the real rental income earned by the assessee out of letting of the unsold flats is taxable under the head “income from house property” and the same is the ratio laid down by the Jurisdictional High Court in the case of CIT vs. Sane & Doshi Enterprises [2015 (4) TMI 882 - BOMBAY HIGH COURT] and others. Therefore, considering the above settled legal proposition on this issue, we are of the opinion that the ground no.1 raised by the assessee is should be allowed in favour of the assessee. Thus, the ground no.1 raised by the assessee is allowed. Disallowance of expenses relating to the “material purchase and labour charges” - AO disallowed the same in view of the bona-fide belief that the expenses are not allowable for the reason of claim of deduction allowed u/s 24 in respect of flats rented out which earned the rental income - HELD THAT:- AO and the CIT(A) did not appreciate the fact that the impugned repair and maintenance expenses relate to the unsold flats which were never rented out. Therefore, these repair and maintenance expenses are not disallowable. Further, AR on the above referred facts and arguments, submitted that the said issue may be remanded to the file of the Assessing Officer for fresh adjudication. The said prayer of the assessee appears to be fair and reasonable. Disallowance u/s 14A needs to be restricted to the total exempt income which is earned during the year and formed part of the total income of the assessee. In this regard, ld. Counsel relied on the various judicial decisions in support of the claim. Denying of deduction claimed u/s 80IB(10) - HELD THAT:- Allowability of the pro-rata deduction u/s 80IB(10) is a decided issue in the own case of the assessee in earlier years. Considering the above settled legal nature of this issue, we find the order of the CIT(A) is fair and reasonable and it does not call for any interference. Thus, the ground is allowed.
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