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2016 (1) TMI 239 - ITAT CHENNAI

2016 (1) TMI 239 - ITAT CHENNAI - TMI - Assessing income from letting out of property - under the head ‘income from house property’ OR ‘income from business or profession’ - Held that:- For the assessment year 2001-02, the ITAT in its order decided the issue in favour of the Revenue by following the decision of the Hon’ble Jurisdictional High Court in the case of CIT v. Chennai Properties and Investments [2015 (5) TMI 46 - SUPREME COURT]. The very same decision of the Hon’ble Jurisdictional High .....

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The Assessing Officer disallowed the expenses to the tune of ₹ 1,30,649/- by invoking section 14A r.w.r. 8D. By taking into consideration of the facts and circumstances of the present case and keeping in view of the above decision of the Hon’ble Delhi High Court in case of Joint Investments Pvt. Ltd. v. CIT [2015 (3) TMI 155 - DELHI HIGH COURT], we are of the opinion that the Assessing Officer is not justified in making excessive disallowance. Therefore, we restrict the disallowance made .....

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r of Income Tax (Appeals) 3, Chennai, dated 04.02.2015 relevant to the assessment year 2011-12. 2. Brief facts of the case are that assessee is engaged in the business of letting out of properties and filed its return of income for the year under consideration. The Assessing Officer has completed the assessment under section 143(3) of the Income Tax Act, 1961 [ Act in short] by assessing income from letting out of property under the head income from house property as against income from business .....

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and I.T.A. Nos. 387 & 388/Mds/2006 dated 22.09.2006, decided the issue in favour of the Revenue by following the decision of the Hon ble Jurisdictional High Court in the case of CIT v. Chennai Properties and Investments 266 ITR 685. The very same decision of the Hon ble Jurisdictional High Court has been reverted by the Hon ble Supreme Court in the case of Chennai Properties and Investments Ltd. v. CIT 373 ITR 673 and therefore, the ld. Counsel for the assessee has prayed that the same may .....

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the decision of the Hon ble Jurisdictional High Court in the case of CIT v. Chennai Properties and Investments (supra) decided the appeal against the assessee. Accordingly in the assessment year 2008-09 in I.T.A. No. 1464/Mds/2011, the Tribunal by following its decision in assessment year 2001-02, decided the appeal in favour of the Revenue. We find that the very same decision of the Hon ble Jurisdictional High Court has been reverted by the Hon ble Supreme Court in the case of Chennai Properti .....

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Officer has asked the assessee as to why the disallowance should not be made under section 14A r.w.r. 8D. The assessee in his letter dated 12.01.2013 has stated that we have claimed ₹ 34,513/-, the management fee paid to HDFC Asset Management Company Limited towards management of our investment portfolio. As the investment is out of internal accruals, question of invoking section 14A will not arise. However, the Assessing Officer has not accepted the reply given by the assessee and by invo .....

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e than the exempt income in view of the decision in the case of Joint Investments Pvt. Ltd. v. CIT 372 ITR 694 (Delhi). 11. On the other hand, the ld. DR relied on the orders of authorities below. 12. We have heard both sides, perused the materials on record and gone through the orders of authorities below. The assessee has earned exempt dividend income of ₹ 50,611/- and the assessee has not admitted any expenses to earn the above dividend. The Assessing Officer, by invoking section 14A r. .....

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ss derived income from rent, sale of investments, dividend and interest-For AY 2009-10, assessee had reported a loss of specified amount-Assessee declared tax exempt income in the form of dividend to the tune of ₹ 48,90,000-Assessee volunteered ₹ 2,97,440 as attributable u/s14A for the purpose of disallowance-AO on the basis of his own understanding of Rule 8D of the Income Tax Rules disallowed the sum u/s 14A read with Rule 8DAssessee claimed that the entire tax exempt income of  .....

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nt case, firstly it was not disclosed by the AO that the appellant/assessee's claim for attributing ₹ 2,97,440 as a disallowance u/s 14A had to be rejected-Secondly, there appears to have been no scrutiny of the accounts by the AO an aspect which was completely unnoticed by the CIT(A) and the ITAT-Thirdly, an important anomaly which instant court cannot be unmindful of was that whereas the entire tax exempt income was ₹ 48,90,000, the disallowance ultimately directed works out to .....

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