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TMI Blog2013 (10) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... passed u/s. 143(3), dated 21.11.2011 were that the assessee in individual capacity has shown salary income stated to be received from five partnership firms. The assessee has also disclosed income as a financial advisor for investment in mutual fund. The assessee has also received commission from NJ Invest Pvt. Ltd. 2.1 It is noted by the AO that the assessee has a residential flat at Shreenidhi Co-operative Housing Society Ltd, Atlhan Surat. As per AO, the assessee had not shown any "notional income" from the said residential flat. According to AO, the assessee was required to show rental income from the said flat in terms of Section 22 of IT Act which prescribes that the annual value of the property of which the assessee is an owner, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is about 695 sq fts. It is obvious that it was not meant for my residential purpose. In view of what has been stated above, it is evident that there is no need for any addition in respect of the issue mentioned above." 3. The AO was not convinced and held that the assessee was unable to prove that flat was indeed used for the business purpose of the assessee. It was mentioned by the AO that local inquiry was conducted and it was found that nobody was staying in the said flat. The AO has adopted Rs. 5,000/- letting value and the ALV was computed as under:"In view of the above facts, the Annual Letting Value of the flat for the whole year is worked out by adopting Rs. 5,000/- per month as notional income as under: Rs.5,000/- per mont ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of the property in question, the AO has invoked the provisions of IT Act as stated (supra) and determined the annual value of the property. Now, the question is that in a situation when the assessee is claiming that the flat in question was used by the employees of a firm, in which the assessee is a partner, hence, no rental income was charged, then whether it was justifiable on the part of the AO to assess deemed property income in the hands of the assessee. This question was raised in the past and also addressed by several High Courts. As far as the decision of respected jurisdictional High Court is concerned, pronounced in the case of Rasiklal Balabhai, 119 ITR 303, it was held that the annual letting value of the godown owned by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... firm in which the assessee was a partner for the purpose of the firm's business. The Court has held that the notional income from the house property was to be included in the total income of the partner. The decision of Gujarat High Court was dissented. There is a decision of Hon'ble Allahabad High Court, viz., CIT Vs. Shiv Mohan Lal 202 ITR 60 (All.), wherein HUE was the owner of the property and the property was used for the business purpose by partnership firm in which the assessee as a karta was partner. The property was used by the partnership firm. No rent was charged by the assessee HUE. According to Hon'ble Court, the assessee HUE was not the user of the property for its own business. The annual letting value was, therefore, held a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that a latest decision of the Hon'ble High Court is required to be followed to maintain the judicial discipline. We have noted the decision of Hon'ble Calcutta High Court pronounced in the case of Prodip Kumar Bothra, 244 CTR 366 (Calcutta) is dated 15th July, 2011 wherein the decision of the Hon'ble Gujarat High Court pronounced in the case of Rasiklal Balabhai (supra) was dissented from. The Hon'ble Calcutta High Court has followed the decision of Karnataka High Court and several other decisions and thereafter came to the conclusion that the assessee cannot pray for exclusion of the income of the property occupied by a partnership firm. The Hon'ble Court has expressed the view in favour of the Revenue and held that by operation of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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