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2016 (10) TMI 532 - ITAT MUMBAI

2016 (10) TMI 532 - ITAT MUMBAI - TM - Addition on property income - estimation of ALV - Held that:- CIT(A) has passed a detailed order thereby mentioned that the assessee had relied only on the Municipal taxes paid as basis for estimation of rental value and since the payment of Municipal taxes is not a measure to estimate the ALV of the property therefore the CIT(A) has held that it is not on record as to what had been submitted by the assessee to the Municipal authorities for property tax val .....

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fore, we are of the considered view that the findings recoded by the learned CIT (A) are judicious and are well reasoned. Accordingly, we uphold the same. Resultantly, this ground raised by the assessee stands dismissed. - Estimation of income from the guest house - Held that:- CIT(A) has passed a detailed order thereby observed that the assessing officer has resorted to the estimation of income from the guest house as the assessee could not provide any evidence such as account books, regist .....

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above. No new circumstance has been brought on record before us by the learned DR in order to controvert or rebut the findings recorded by the learned CIT (A) on the basis of the remand report. Moreover, there is no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that the findings recorded by the learned CIT (A) are judicious and are well reasoned. - Addition us/ 14A - Held that:- CIT(A) has passed the detailed order afte .....

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013 - Dated:- 24-8-2016 - SHRI JASON P. BOAZ, AM AND SHRI SANDEEP GOSAIN, JM For The Appellant : None For The Respondent : Shri Sumit Kumar ORDER Per Sandeep Gosain, Judicial Member: The Present Appeal has been filed by the assessee against the order of Commissioner of Income Tax (Appeals)- 24, dated 09.07.2013 on the grounds of appeal mentioned herein below. 1. (a) On the facts and in the circumstances of the case, the learned CIT(A) erred in confirming the addition of ₹ 25.200/- assessed .....

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e, the learned CIT(A) erred in confirming the addition of ₹ 1,57,500/- as income from Vijay Guest House. The appellant prays that, estimate made be deleted. (b) The learned assessing officer and the CIT(A) has estimated income from the Guest House, which is contrary to the facts and evidence on record and hence it should be deleted. (c) The learned CIT(A) erred in observing that, the appellant has not given details and evidence. The learned assessing officer and the CIT(A) erred in estimat .....

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e deleted. (b) The learned assessing officer, failed to appreciate that, the provisions of section 14A are not attracted and the addition made be deleted. The appellant prays that, the addition of Rs.l,56,763/- be deleted. Without prejudice, the addition be reduced. 2. The brief facts of the case are that the return of income declaring total income at ₹ 8,49,990/- was filed on 24.02.2010. The return was processed u/s 143(1) of the Act and later on the case was selected for scrutiny under C .....

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#8377; 9,19,303/- therefore while calculating the said amount has disallowed ₹ 1,56,763/- on account of expenses for earning of exempt income u/s 14A and added the same to the total income. 3. Aggrieved by the order of the AO, assessee filed the appeal before CIT(A) and the CIT(A) after considering the case of the assessee partly allowed the appeal vide order dated 09.07.2013. 4. Aggrieved by the order of CIT(A) the assessee filed the present appeal before us on the grounds mentioned herei .....

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ents. Therefore we have decided to proceed with the hearing of the case ex-parte with the assistance of the ld. DR and the material on record. Ground No.1 6. This ground relates to making of addition of ₹ 25,200/- assessed as property income by estimating income of flat at Lonavala at ₹ 36,000/-. While dealing with the said ground the CIT(A) has passed detailed order the operative para 4.3 is reproduced below: 4.3 Decision:- I have considered the facts of the case and the submissions .....

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uring the appellate proceedings has stated that the property could not be let out during the year and it was lying vacant. He further submitted that the municipal taxes paid on this property were only ₹ 3,050/- p.a. Considering the municipal taxes paid at 1j3rd of the total rental income earned during the year the rent that would have been received works out to ₹ 9,150/- and submitted that the Assessing Officer had taken unreasonably high value while estimating the property income. I .....

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besides as the assessee is also not keen to produce any other supporting documents, it is held that the ALV estimated by the Assessing Officer cannot be disturbed and, therefore, the same is confirmed. The ground of appeal of the assessee is dismissed. 6.1 After hearing ld. DR present in the court and after perusal of documents as as well as orders passed by lower authorities we found that CIT(A) has passed a detailed order thereby mentioned that the assessee had relied only on the Municipal ta .....

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No new circumstance has been brought on record before us by the learned DR in order to controvert or rebut the findings recorded by the learned CIT (A) on the basis of the remand report. Moreover, there is no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the considered view that the findings recoded by the learned CIT (A) are judicious and are well reasoned. Accordingly, we uphold the same. Resultantly, this ground raised by the assessee stands .....

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assessment proceedings, the Assessing Officer called for the details with regard to availability of rooms, location, occupation, rent etc. In response the assessee submitted that the said building was in a dilapidated condition having 6 rooms and ₹ 125/- per day per person was being charged as the tariff. However, the Assessing Officer, as the information submitted by the assessee, in his opinion, was not satisfactory he estimated rent per day per person at ₹ 300/-. He has also take .....

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that the occupancy rate of the guest house during the relevant period was not to the extent of 275 days as mentioned by the Assessing Officer. I have considered the facts of the case and details submitted by the assessee and found that neither the Assessing Officer nor the assessee could conclusively prove the stand taken by them. The Assessing Officer has resorted to the estimation of income from the guest house as the assessee could not provide any evidence or photograph of the guest house. In .....

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in the limits of the city and also nearer to oil refinery of Reliance Industries Ltd., the rent the assessee would have received has to be arrived at. However, the factors such as lesser amount of electricity charges paid, lack of running water facility and the dilapidated condition of the property are also considered for deciding the income which the assessee would have earned from the guest house during the relevant period. For the above reasons mentioned, in my opinion, the occupancy rate ma .....

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ot provide any evidence such as account books, registers etc or photograph of the guest house. The CIT(A) has rightly held that in the absence of this the AO should have carried out certain local enquiries before arriving at the amount of addition. Therefore after discussing the entire case, the CIT(A) has rightly come to the conclusion by taking occupancy rate at 50% per annum and charges per day per person per room by taking @ ₹ 150 per day and has worked out the amount in question which .....

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the same. Resultantly, this ground raised by the assessee stands dismissed. Ground No.3 8. This ground relates to making an addition us/ 14A of ₹ 1,56,763/-. The Ld. CIT(A) has dealt with this issue in para no.6.3 which is reproduced below: 6.3 Decision :- The Assessing Officer in the assessment order has raised a very interesting issue, i.e. the share of profit from the firm which is exempt u/s 10(2A) of the Income Tax Act has been taken into consideration for invoking provisions u/s 14A .....

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. 14A, as the firm is paying tax on total income and as such the profit received by the partner cannot be taxed, as it amounts to double taxation. I have considered the facts of the case and also the submissions made by the assessee. It is seen from the assessment order that the assessee has raised loans and advanced the same to the partnership firm. As far as this fact is concerned neither the Assessing Officer nor the assessee is in dispute (it is not mentioned that the quantum of amount given .....

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the advance/loan was given. There is also no mixing of funds advanced by the assessee to the firm. It has also been observed by the Assessing Officer that for exclusive purpose of investment in firm the aforesaid amounts were advanced. I find that the reasoning given by the Assessing Officer is well founded and correct. Coming to the argument of the assessee that the tax has already been paid by the firm on the profits derived and the balance amount only has been received by the assessee and al .....

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