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2019 (6) TMI 435

..... 377; 4.39 cr. and investment to earn exempt income is only to the tune of ₹ 46 lacs, so, no disallowance need to be made under Rule 8D(2)(ii) of the Rules. For that we rely on the decision of CIT-vs.- Reliance Utilities & Power Ltd. [2009 (1) TMI 4 - BOMBAY HIGH COURT] . Further, in respect of disallowance under Rule 8D(2)(iii) the AO is directed to compute 0.5% on the investment on which the assessee earned dividend income as held by this Tribunal in REI Agro Ltd. [2013 (9) TMI 156 - ITAT KOLKATA] Income from house property - annual letable value of the house property which the assessee stated to have inherited from his mother on which the AO has calculated the annual letable value invoking sec. 22 and 23 - HELD THAT:- No inquiry .....

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..... served by the AO are that at the time of scrutiny, the AO noted that the assessee has made investment in shares and mutual funds and also the assessee has claimed a sum of ₹ 3,54,904/- towards interest paid and ₹ 7,414/- as bank and demat charges. Accordingly, the AO asked the assessee to explain as to why disallowance u/s. 14A of the Income-tax Act, 1961 (hereinafter referred to as the Act ) should not be made in the view of investment which is related to exempt income. In response, the Ld. AR of the assessee replied vide letter dated 19.01.2016 which has been reproduced by the AO at page 2 in his assessment order. And after considering the said reply, the AO observed that the Ld. AR of the assessee has presented an overall vie .....

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..... e., whether any interest expenditure can be attributed to earning of exempt income. It is noted that assessee has deployed own funds to the tune of ₹ 4.39 cr. and investment to earn exempt income is only to the tune of ₹ 46 lacs, so, no disallowance need to be made under Rule 8D(2)(ii) of the Rules. For that we rely on the decision of the Hon ble Bombay High Court in CIT-vs.- Reliance Utilities & Power Ltd. reported in 313 ITR 340 (Bom.). Further, in respect of disallowance under Rule 8D(2)(iii) the AO is directed to compute 0.5% on the investment on which the assessee earned dividend income as held by this Tribunal in REI Agro Ltd. 144 ITD 141. 5. The next issue is with regard to the annual letable value of the house proper .....

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..... mating the annual letable value of the house despite the assessee pointed out this fact to the AO that the house in question is an old house, which is in a dilapidated condition and so it is not habitable and therefore, the question of letting out of the property does not arise. Taking in to consideration the aforesaid facts, in the interest of justice and fair play, I set aside the order of Ld. CIT(A) and restore the matter to the file of AO to verify the contention of the assessee that the house in question is in a dilapidated condition and not habitable. The AO after making enquiries finds the contention of the assessee to be correct then no deemed provision of sec. 22 read with section 23 should be saddled on the assessee. If the conten .....

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