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2020 (12) TMI 863 - AT - Income TaxAddition on account of notional house property income - Signature Villa in UAE owned by the assessee which was kept for self use - CIT(A) while upholding the said addition agreeing with the view of ld. AO to make adhoc increase of 10% over the annual value assessed for the previous assessment year - HELD THAT:- From the perusal of the valuation report, we find that the valuer had categorically mentioned the suo moto value of the subject mentioned property for different parties - Rental value had been consistently showing a declining trend in respect of subject mentioned property at Palm Signature Villa, Dubai. Hence, we hold that there is absolutely no justification for the ld. AO to adopt an adhoc increase on 10% over and above the value assessed in the previous year. Hence, we direct the ld.AO to determine rental income without making any adhoc increase of 10% for the year under consideration. Accordingly, the ground Nos.1-3 raised by the assessee are partly allowed. Disallowance u/s.14A of the Act r.w.r. 8D - Assessee suo moto disallowed expenses - HELD THAT:- We find that the ld. CIT(A) had directed the ld. AO to consider only those investments which had actually yielded exempt income for the purpose of working out the disallowance u/s.14A of the Act r.w.r. 8D(2)(iii) of the rules. This is in consonance with the Special Bench Delhi Tribunal in the case of Vireet Investments [2017 (6) TMI 1124 - ITAT DELHI] - We are in complete agreement with such direction of the ld. CIT(A). We further direct the ld. AO that in any case, the disallowance made u/s.14A of the Act cannot exceed the exempt income earned by the assessee. From the disallowance so computed as per the aforesaid directions, needless to mention that voluntarily disallowance made by the assessee in the sum of ₹ 60,000/- is to be reduced by the ld. AO.
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