TMI Blog2015 (5) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... The Bonds were available for sale only from 22.01.2007 and the assessee purchased Bonds on 01.02.2007 i.e. within 11 days from the date when the Bonds were available for sale in the market. In our opinion, the decision of the Hon’ble Bombay High Court n the case of CIT, Cent ral-III, Mumbai –vs.- Cello Plast (2012 (8) TMI 527 - BOMBAY HIGH COURT), is clearly applicable in the case of the assessee. The assessee had purchased the Bonds within reasonable period when the Bonds were available for investment. No cont rary decision was brought to our knowledge by the ld. D.R. even though he has vehemently relied on the order of the Assessing Officer. We, therefore, respectfully following the aforesaid decision of the Hon’ble Bombay High Court set aside the order of the ld. CIT(Appeal s) and direct the Assessing Officer to allow exemption to the assessee under section 54EC - Decided in favour of assessee. Addition made on account of the accrued interest on fixed deposits - Held that:- We find substance in the submissions made by the ld. A.R. that the interest income on FDR has been shown by the assessee regularly on the basis of the certificate received from the Banker as is included in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 27.02.2014 for the assessment year 2006-07 on the following grounds of appeal:- (1) For that on the facts and in circumstances of the case, this re-assessment 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 ₹ 11,07,079/- is unwarranted by the facts of the case. (5) For that the ld. ITO erred in adding ₹ 32,570/- as accrued interest income on fixed deposit, and the same is unjustified by the facts of the case. (6) For that the ld. ITO erred in adding ₹ 12,600/- as notional rent and the same is unjustified and unwarranted by the facts of the case. (7) For that the ld. ITO erred in adding ₹ 64,396/- as income from ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on by the ld. A.R. We noted that in that case also, the assessee sold its factory on 22.03.2006 and during the period 22.03.2006 to 01.07.2006 the Bonds were not available on 30.06.2006. CBDT issued the Circular extending the time to invest Bonds upto 31.12.2006, and upto 22.01.2007 the REC Bonds were not available within six months from the date of the sale of the property. In that case time period al so expi red on 21.09.2006. The last date in view of the Circular of the Board for investment in REC Bonds was 31.12.2006 but the Bonds were available between 22.01.2007 to 31.01.2007. The assessee bought the Bonds on 311.01.2007. The Hon ble High Court under these fact s allowed the exemption to the assessee when the matter travelled to the Hon ble High Court. In the present case, we noted that the assessee sold his house property on 15.01.2006 for a considerat ion of ₹ 23,00,000/- while as per the provisions of sect ion 50C, the consideration as per the stamp valuation was ₹ 24,65,600/-. The indexed cost of acquisition of the property came to ₹ 13,57,921/-. The assessee computed the capital gain at ₹ 9,42,079/- but taking the stamp duty valuation under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e 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 ₹ 32,570/-. 9. The next ground relates to the addition of ₹ 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 Assessing Officer was of the view that the rent shown by the assessee is at a lower side. He est imated the same @ ₹ 4,000/- per month amounting to ₹ 36,000/- and after allowing the statutory deduction he made an addition of ₹ 12,600/-. 11. After hearing the rival submissions we noted that the notional rent has merely been estimated by the Assessing Officer without giving any basis and on what basis the rent has been estimated @ ₹ 4,000/- per month. The provision of section 23 lays down how the annual value of the property has to be estimated. None of the relevant provisions has been brought to our k ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of accounting regularly employed by him) in determining the annual value of the property of that previous year in which such taxes are actually paid by him. 14. The assessee before us claims that the property was occasionally let out and part of the property is being occupied by the assessee as weekend destination which means that the property remains vacant for part of the year but the assessee has not given any calculation how he received the rent and during what year the property remains vacant, so that the actual rent received or receivable could have been computed 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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