TMI Blog2015 (2) TMI 1305X X X X Extracts X X X X X X X X Extracts X X X X ..... House Property” and no interference in the order of the CIT(A) on this issue is called for, which is confirmed and the ground of the appeal on this issue is dismissed. Determination of the notional value of the second floor to fifth floor of the building let out to one of the partners of the assessee-firm, who runs a hotel business - HELD THAT:- Allowance of deduction at 10% per higher floor from the bottom ground and first floor of the property, was on the lower side, and that upper second floor to fifth floor not having any hall type construction to suit for commercial use for any departmental stores etc., and construction of building consisted of small rooms only and the claim of the assessee that covered area on the higher floors were less as compared to the ground and first floor of the property, and also considering the undisputed fact that the partner of the assessee-firm, who is running a hotel “Sudarshan Palace” business has advanced deposit of ₹ 1.63 crores to the assessee-firm without charging any interest, we are of the view that the ends of justice shall be met, if the rental value of second floor to fifth floor of the property used for hotel business is deter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... notional income which is very strongly objected by your appellant particularly because under the I.T.Act while computing income from house property either actual rent or municipal value/ALV as per municipal corporation only can be taken. (c) The CIT(A) has also erred in confirming the deemed income ₹ 32,96,882/- adopted by AO which is not computed as per the provisions of law and on facts of the case. 3. The learned counsel for the assessee submitted that grounds of the appeal of the assessee relate to two issues. The first issue is regarding assessing rental value of part of the property, let out by the assessee to M/s.Varine Commercial Pvt. Ltd. ( VCPL for short) and the rental value of other part of the same property let out to one of the partners of the assessee-firm, has been assessed under the head Income from House Property as against the claim of the assessee for assessing the same as Business Income of the assessee. He submitted that building of the assessee-firm consists of ground floor, first floor to fifth floor. The ground floor and first floor were let out by the assessee firm to VCPL , which runs a departmental store therein, and has paid rent of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d that there was no provision of any services to be provided by the assessee to the VCPL or to the partner of the assessee-firm in the upper floor. The CIT(A) has recorded in his appellate order that the value of the building was shown at ₹ 3.86 crores whereas the value of the furniture and fixtures is of ₹ 87,226/- only, which are of insignificant value vis- -vis value of the building. In these facts of the case, we are of the view that in the absence of any facilities or business infrastructure provided by the assessee-firm to its lessee, rental income from let out of premises only was rightly taxed by the department under the head Income from House Property and no interference in the order of the CIT(A) on this issue is called for, which is confirmed and the ground of the appeal on this issue is dismissed. 6. Other issue in the grounds of the appeal of the assessee is regarding determination of the notional value of the second floor to fifth floor of the building let out to one of the partners of the assessee-firm, who runs a hotel business, at ₹ 49.95 lakhs, and after allowing statutory deductions, the net income of ₹ 32,96,882/- was assessed as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... late order passed by the CIT(A) in support of the case of the Revenue. 7. We have considered rival submission and perused the orders of the AO and the CIT(A). We find that the assessee has charged the rent of ₹ 1 lakh only for the second floor to fifth floor of the said property for the entire year from one of its partners, who runs a hotel business therein under the name Sudarshan Palace . No valid reasons could be assigned on behalf of the assessee before us for charging such lower rent for second to fifth floor of the property as compared to rent of ₹ 2.69 lakhs from VCPL per month for two floors. In reply to a specific query from the Bench, no definite figure of the covered area let out to Sudarshan Palace could be filed before us. The CIT(A) has given a finding that it is not the appellant s case that the property was subjected to Rent Control Act or standard rent was got determined. No conclusive evidence could be led on behalf of the assessee to show that the 2nd floor of the asset was in broken condition and not usable for any commercial purpose. We find that the ground floor to first floor of the property was let out to VCPL at ₹ 2.69 lakhs per mo ..... X X X X Extracts X X X X X X X X Extracts X X X X
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