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TMI Blog2015 (5) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings u/s 147 is arbitrary and bad in law. (2) For that there was no default or failure u/s 139 of the I.T. Act on the part of the assessee as the ld. ITO has to have reason to believe that income has escaped assessment. (3) For that the ld. ITO has no power to reopen the case since no tangible material was placed on record so as to show that there was escapement of income from assessment. (4) For that the ld. ITO erred in disallowing the exemption claimed under section 54EC against capital gain for investment in REC Bond and assessed tax on LTGG of Rs. 11,07,079/- is unwarranted by the facts of the case. (5) For that the ld. ITO erred in adding Rs. 32,570/- as accrued interest income on fixed deposit, and the same is unju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and, therefore, he disallowed the exemption. 5. The assessee went in appeal before the ld. CIT(Appeals), who held that exemption under section 54EC is available only when the specified Bonds are purchased within a period of six months. Since the assessee did not make the purchase within a period of six months from the date of the sale of property, therefore, he sustained the order of the Assessing Officer. 6. We have heard the rival submissions and carefully considered the same along with the orders of the tax authorities. Before us, ld. A.R. vehemently relied on the order of the Hon'ble Bombay High Court in the case of CIT, Cent ral-III, Mumbai -vs.- Cello Plast reported in 24 Taxman.com 111 (Bombay), a copy of which was placed before u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 42,079/- but taking the stamp duty valuation under section 50C the Assessing Officer computed the capital gain at Rs. 11,07,079/-. The assessee could not make any investment in REC Bonds as the Bonds were not available. The Central Board of Direct Taxes vide Ci rcular No. 142/09/2006-TPL dated 30.06.2006 extended the date for making the investment upto 31.12.2006. Therefore, if the date would have made the investment till that date he would have been eligible for the exemption. But we noted after 31.12.2006 till 21.07.2007 the REC Bonds were not available in the market for purchase, therefore, the assessee could not make the investment in Bonds. The Bonds were available for sale only from 22.01.2007 and the assessee purchased Bonds on 01.02 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... regularly on the basis of the certificate received from the Banker as is included in the TDS. Similarly during the impugned year also, the interest has been shown by the assessee in accordance with the calculation given by the Banker. Since the assessee is regularly following the same method of accounting, we, therefore, do not find any legality in the method of accounting followed by the assessee. Accordingly we delete the interest amounting to Rs. 32,570/-. 9. The next ground relates to the addition of Rs. 12,600/- as notional rent. 10. The fact s relating to this addition are that the assessee offered notional rent for two properties, namely at Gariahat Road and Tara Road. For Gariahat Road the rent was shown for nine months. The Asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd as shown by the assessee amounting to Rs. 64,396/-. 13. We have heard the rival submissions and carefully considered the same along with the orders of the tax authorities. Ld. A.R. before us, even though vehemently contended for allowing deduct ion, but could not convince us how the annual value of the property will get reduced. It is not a case where the assessee has claimed vacancy allowance. Sect ion 22 of the Income Tax Act clearly stipulates that the income from the house property shall be chargeable under the head "income from house property" on the basis of annual value. The provision of section 23 lays down how the annual value has to be determined. Section 23 lays down three basis and on the basis of which the annual value has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with the provisions of sec tion 23(1)(c) of the Act. In our opinion, the onus is on the assessee. In case, he want s to claim that the property was not let out during the whole of the year. Since the assessee has not given any detail s neither before the authorities below nor before us, we, therefore, do not find any illegality or infi rmity in the annual value being taken by the Assessing Officer on the basis of the rent which the assessee received during the assessment year 2004-05 amounting to Rs. 1,86,000/-. We, therefore, confi rm the addition made by the Assessing Officer.
15. In the result, the appeal filed by the assessee is partly allowed as indicated above.
Order pronounced in the open Court on 06t h May, 2015. X X X X Extracts X X X X X X X X Extracts X X X X
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