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2022 (7) TMI 1139 - AT - Income TaxAddition under the head ‘Income from House Property’ - AR submitted that annual letting value determined by the Assessing Officer is contrary to the provisions of sections 22 and 23 - HELD THAT:- In the present case, it is evident that the lower authorities have determined the annual letting value by applying 8% of capital cost and not considered the provisions of rent control legislation, despite the fact that the aforesaid properties are subjected to the said legislation. Thus, we remand this issue to the file of the Assessing Officer for determination of annual letting value in terms of the applicable rent control legislation. Accordingly, ground no. 2 raised in assessee’s appeal is allowed for statistical purpose. Deduction claimed u/s 54F - joint ownership of the assessee - divergent views of the Courts are available as regards the meaning of the term ‘own’ - HELD THAT:- As respectfully following the decisions passed by the Hon’ble Madras High Court in Dr. Smt. P.K. Vasanthi Rangarajan (2012 (7) TMI 563 - MADRAS HIGH COURT] and Kapil Nagpal [2015 (9) TMI 613 - DELHI HIGH COURT] which view has also been taken by the coordinate bench of Tribunal in Ashok G. Chauhan (2019 (4) TMI 1024 - ITAT MUMBAI] we are of the considered view that joint ownership of the assessee, in the present case, in 2 residential Flats, namely, Flat No. A–408 and B–504 on the date of transfer of original capital asset will not disentitled the assessee from claiming relief under section 54F. As the expression ‘a residential house’ in section 54F, prior to its amendment vide Finance (No. 2) Act, 2014, w.e.f. 01/04/2015, includes more than one residential house purchased/constructed by the assessee, within the prescribed time. In the present case, as the properties were purchased by the assessee pursuant to transfer of long-term capital asset (‘original asset’), the same will fall within the category of ‘a residential house’ (or as referred in the section as ‘new asset’) for the purpose of section 54F of the Act. As the aforesaid properties, fall within the category of ‘new asset’, same cannot be considered as ‘residential house’ for the purpose of proviso to section 54F of the Act, which, as stated earlier, is other than the ‘new asset’. The proviso only carves out exceptional situation in which the provisions of section 54F will not be applicable. Therefore, as the aforesaid properties are not in the nature of ‘residential house’, for the purpose of proviso, none of the conditions as mentioned in proviso are applicable to the present case. Further, as it is not disputed that the aforesaid properties were purchased by the assessee within the prescribed time, therefore, we are of the considered view that assessee is entitled to claim benefit under section 54F of the Act. Accordingly, ground No. 6 raised in assessee’s appeal is allowed. Addition as income from other sources - It is the claim of the assessee as wrongly declared as income under an anticipation of refund of investment in property which was made and cancelled during the year - HELD THAT:- As per the assessee, revised return also could not be filed as the time limit for filing the same was expired. Further, as per the assessee, the aforesaid amount was never realised and the investee with whom the investment was made refused to entertain any claim. It is well established that assessment proceedings before the taxing authority is to assess the correct tax liability and therefore no hypothetical income / profit could be brought to tax. In the present case, addition was made by the Assessing Officer and same was upheld vide impugned order without examining the submission of the assessee. Therefore, we deem it appropriate to remand this issue to the file of Assessing Officer for de novo adjudication after consideration of all the aspects. Accordingly, ground no. 7 raised in assessee’s appeal is allowed for statistical purpose.
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