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M/s. Rayalla Corporation (P) Ltd. Versus The Deputy Commissioner of Income Tax Company Circle 5 (1) Chennai

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)46 - SUPREME COURT]. The very same decision of the Hon’ble Jurisdictional High Court has been reverted by the Hon’ble Supre .....

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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)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 by the Assessing Officer to the extent of exempt income .....

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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 or profession . 3. The assessee carried the matter in .....

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6, 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 be followed and the order of the ld. CIT(A) may be reve .....

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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 Properties and Investments Ltd. v. CIT (supra). Therefore, resp .....

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ce 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 invoking section 14A r.w.r. 8D, disallowed an amount of  .....

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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.w.r. 8D made disallowance of ₹ 1,30,649/- and the .....

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end 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 ₹ 48,90,000 was lower than the disallowance-CIT(A) a .....

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e 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 nearly 110 percent of that sum, that is ₹ 52,56, .....

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