TMI Blog2015 (11) TMI 1272X X X X Extracts X X X X X X X X Extracts X X X X ..... been caused to the Revenue as the Revenue has got the due taxes although the same has been paid by the partnership firm MCS and the case of MCS was also processed by the Revenue under scrutiny u/s 143(2) read with Section 143(3) of the Act where by the assessing officer of the MCS has duly mentioned about the inclusion of afore-stated income from capital gain of ₹ 80 lacs earned by MCS in the total assessed income of MCS for assessment year 2009-10. Accordingly, we delete the addition of ₹ 76,57,948/- as made by the assessing officer and as confirmed by CIT(A). We order accordingly. Estimation of annual rental value of house property on notional basis by treating a single combined unit as two distinct properties - Held that:- We have observed that the assessee is the owner of two adjoining flats which are used for residential purposes, the assessee is entitled for exemption u/s 23 of the Act with respect to one flat while the second flat shall be chargeable to tax as per provisions of section 23 of the Act. We have also observed that the assessing officer has brought to tax income from house property on ad- hoc basis without bringing on record any cogent evidence as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24.11.2009, declaring a total income of ₹ 41,04,689/-. The case was selected in scrutiny in CASS. The assessee is having salary income and income from house property and income from other sources. During the course of assessment proceedings, the assessee was asked to explain why he has not reflected the capital gain arising from sale of property. The assessee explained that the agricultural land being Gut no 405 in Village Bhukum , Taluka Mulshi , District Pune, Maharashtra was sold which is owned by the partnership firm Marine Container Services (hereinafter called MCS )of which the assessee is partner and since the said agricultural land cannot be held in the name of the partnership firm as partnership firm is not separate legal entity, the same is registered in the name of the assessee being partner of the MCS on behalf of MCS although the MCS is owner of the said agricultural land and the agricultural land is duly appearing in the books of accounts of the said MCS. The assessee submitted that the purchase consideration for purchase of this agricultural land was paid out of the funds of the MCS. The assessee submitted that he executed both purchase and sale documents wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tual owner of the land and also is the seller. 5. Appellant has argued that land was acquired by the firm and payments were made by the firm, Marine Container Service. It is claimed that it appears in the Balance Sheet of the firm. From the perusal of details I find there is no separate listing of the alleged land and there is no conclusive proof that it was acquired and held by the firm M/s. Marine Container Services. 6. The Assessing Officer has also pointed out that the so called long term capital gain was not disclosed by the firm, M/s. Marine Container Services in its original return of income filed on 26.9.2009. After the scrutiny proceedings initiated in the hands of the appellant a revised return of the firm was filed on 8.11.2011 disclosing this capital gain. Hence I find that there was no disclosure of capital gain even in the hands of the firm, M/s. Marine Container Services. 7. The Assessing Officer has rightly pointed out that there was no evidence of any authorization by the firm authorizing the partner to buy or sell land in its name. It cannot be independent activity of a single member or partner. The CIT(A) held that the said long term capita ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t prejudice because all the due taxes relating to income arising as capital gain from the sale of the said agricultural land have been duly paid to the Revenue although by the firm, MCS. 6. The Ld. DR relied upon the orders of authorities below. 7. We have considered the rival submissions and carefully perused the relevant material on record. We have observed that the said agricultural land was although registered in the name of the assessee but the same was owned by the partnership firm MCS , the assessee being partner of MCS . The sale proceed of the said land was duly deposited in the bank account of the firm,MCS and the due taxes on capital gain arising from the sale of the said agricultural land being Gut no 405 in Village Bhukum , Taluka Mulshi , District Pune, Maharashtra have been duly paid to Revenue albeit by the partnership firm M/s Marine Container Services although it was technically registered in the name of the assessee. Thus, in nut shell, the assessee has brought on record cogent material to substantiate his contentions that the capital gain arising thereof from sale of the said agricultural land is chargeable to tax in the hands of the partnership firm MCS a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the other property, however, the income being annual lettable value has to be brought to tax as per section 23 of the Act under the head Income from House Property . Hence, the assessing officer brought the notional rent to tax at the rate of ₹ 15,000 per month and brought to tax ₹ 1,80,000/- as income from house property. The assessing officer , however, allowed the benefit of statutory deduction for repair and maintenance u/s 24 of the Act and also of the interest of ₹ 1,50,000.00 paid to the bank for borrowing for acquisition of flat. 10. Aggrieved the assessee carried the matter in appeal before CIT(A) and reiterated its submissions. The CIT(A) held that the assessee can treat only one flat as self occupied out of the two flats as per provisions of Section 23 of the Act and the assessing officer has rightly brought to tax by treating the second flat as deemed to be let out. 11. Aggrieved by the order of CIT(A), the assessee is in appeal before us. 12. The assessee reiterated its submissions and contended that these are two adjoining flats and they are self occupied for residential purposes . The assessee contended that the authorities below have ..... X X X X Extracts X X X X X X X X Extracts X X X X
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