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2018 (8) TMI 1620 - AT - Income TaxEstimation of the annual value of the property - Addition under the head ‘Income from House Property’- Held that:- There is no allegation, much less any positive material with the Assessing Officer, to say that the assessee has suppressed the real position by declaring rent from the sister concern @ ₹ 7,500/- per month. On the contrary, what we find is that without arriving at such satisfaction, AO has proceeded to ascertain the going rate of the rentals in the vicinity of assessee’s property. AO has straightaway based his estimation on the rates found on his inquiry without establishing the similarity of the arrangement. As pointed out by the learned representative with regard to the rental arrangement of Galaxy Aviation, the same is incomparable with assessee’s arrangement because of the timing difference. The arrangement of Galaxy Aviation is of the year 2012 whereas assessee’s arrangement is of 2007. No justification for the action of the Assessing Officer in disregarding the actual rent declared by the assessee for the purpose of arriving at the annual value of the property to be taxed u/s 22 of the Act. As a consequence, we set-aside the order of CIT(A) and restore the matter back to the file of the Assessing Officer who shall recompute the income assessable under the head ‘Income from House Property’ in terms of our aforesaid directions. Thus, on this aspect, assessee succeeds. Disallowance of expenses - additional ground - Held that:- Once the income declared from rental income has been assessed under the head ‘Income from House Property’, the income under the head ‘Income from Business’ has to be separately assessed. While assessing the income from business, the entire expenditure claimed have been disallowed, an aspect which was sustained by the CIT(A) also. It is pointed out that though assessee does not have an active business activity, but expenses which are necessary for existence of the company as such are required to be allowed. The said Ground was omitted to be raised at the time of filing of appeal and is now being raised as an Additional Ground of appeal. On the issue of Additional Ground, we deem it fit and proper to direct the Assessing Officer to consider the same on merits and allow such expenses as are permissible and required for maintenance of a corporate entity as such. Thus, on this aspect, assessee succeeds for statistical purposes.
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