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TMI Blog2024 (2) TMI 526X X X X Extracts X X X X X X X X Extracts X X X X ..... of the vacant portions of the house property and consequently erred in confirming the addition of Rs. 48,09,502/- made under the head 'Income from house property'. 3. That the Ld.CIT(A) erred in not appreciating that the addition of Rs. 48,09,502/- made by the Assessing Officer was without considering the deduction towards vacancy allowance and ignoring the provisions of clause (c) of sub-section (1) of Section 23 of the Act. 4. Without prejudice to the above, that the Ld.CIT(A) erred in not appreciating that the sum of Rs. 68,70,717/- taken by the Assessing Officer towards vacant portions cannot be regarded as the reasonable expected rent as per the provisions of section 23(1)(a) of the Act. 5. Without prejudice to the above grounds, that the Ld.CIT(A) ought to have directed the Assessing Officer to take Municipal Rentable Value as ALV of vacant portions. 6. That the Ld.CIT(A) erred in confirming the action of the Assessing Officer in treating the hire charges of Rs. 1,68,000/- received on leasing of Plant & Machinery as income from house property instead of business income of the appellant. 7. That the Ld.CIT(A) is not justified in confirming the disallowa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a monthly rent. The allowable depreciation @ 15% on the same was claimed as business expenditure but was wrongly stated in the return of income under property instead of business head". When the assessee was asked to furnish the relevant bill for the purchase of the said Plant & Machinery, the assessee in her another letter dt. NIL submitted in this office on 12.12.2019, stated that "during the year Hot mix plant at factory building erected at Krishnareddy palls, Chiyyedu and the same was given on hire to Nitin Sai Constructions where the assessee was a partner and the same has been considered as income and admitted in the returns. Since it was already 8 years old, the concerned bills of the year have been misplaced and efforts are being made to find the same. The above submissions of the assessee were not accepted by the Assessing Officer. Hence the amount of depreciation claimed as deduction on the said property of Rs. 2,58,750/- was disallowed by the Assessing Officer and credit was not allowed in the income from house property. 5.3. Similarly, in the current assessment year also, the assessee has claimed the receipts of Rs. 1,68,000/- purported to have been received on hire o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our attention to Para 3.1 of the assessment order which is to the following effect : "3.1 During the course of assessment for the A.Y. 2016-17, it was verified that the assessee had constructed a building by name Nithin Sai Complex. The total lettable area is 24,000 sq. ft. As per the details submitted, the assessee had not let out the full lettable area. The assessee in the computation has declared rent received for a total of 9,000 sq. ft. let out and admitted in her letter dt. NIL, received in this office on 12.12.2019. that an area of 15,000 sq. ft. is still vacant. As per provisions of section 23, the ALV of property is higher of the following 1. The sum for which the property may reasonably be expected to be let out 2. Where property is actually let, the actual received or receivable 3. If any part of the property is vacant and owing to such vacancy the actual rent received or receivable by the owner is less than the sum referred in 1 and 2 above, the amount so received or receivable. Therefore, the assessee is not eligible to claim any deduction towards amount of rent not realizable either under section 23 or section 24 of the Income Tax Act. As per provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax Vs M/s Ansal Housing Finance Ltd appears to be relevant to the facts of the case. In the instant case, the Hon'ble High Court held that Income Tax on property is levied not on actual receipt basis but on the basis of ALV. ALV is a method to arrive at a figure on the basis of which the impost is to be effectuated. The Assessing Officer has rightly invoked the provisions of sec. 23(1)(a) in arriving at ALV and the contention of the assessee that the ALV of the property has to be taken as NIL as it was vacant is not tenable. With regard to assessee contention that Municipal Rentable Value is to be adopted, the assessee has let out property at First Floor and the rent received from the said property will be the basis for calculating the ALV. If there is no basis for calculating the ALV then any other parameter can be looked at for determining the ALV. Accordingly, the assessee contention to adopt Municipal Rental Value for determining the ALV is not acceptable. Further, the assessee has submitted documents which do not have any evidential value as per the statutory provisions." 8.2. The submissions of the assessee are that the issue is covered in favour of the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent case. Ld. DR further relied on the decision of Hon'ble High Court of Andhra Pradesh Vs. ACIT reported in (2011) 14 taxmann.com 146. 9. We have heard the rival submissions and perused the material on record. Admittedly, the assessee is the owner of Nithin Complex, which is a commercial property, consisting of the ground and four floors, having the total vacant area of 24000 sft and out of the said 24000 sft, 9000 sft was let out by the assessee and the remaining area of 15,000 sft was lying vacant during the year under consideration. Out of the said 15000 sft, 12000 sft was on the 3rd and 4th floors wherein 3000 sft was on the first floor and 2nd floor. In our opinion, the area which was situated on the 1st and 2nd floors being situated on the same floor, the adjoining floors are required to fetch the similar rent which are being received by the assessee on the adjoining properties situated at ground, 1st and 2nd floors. 9.1. In our view, the ALV of 3000 sft of the area lying vacant on 1st and 2nd floors are required to be determined by applying the rate of Rs. 38/- per sft. Having decided the issue with respect to 3000 sft situated on 1st and 2nd floors, now the question requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l of the appeal, the assessee has preferred the MA at page 42 of the paper book and it is stated that the same is pending for adjudication before the Tribunal. In our view, once the appeal of the assessee for A.Y. 2012-13 has been dismissed by the Tribunal for the reasons mentioned therein, we do not find any reason to give relief to the assessee on the grounds raised before us. In case, the Tribunal while hearing the M.A. filed by the assessee, recalls the order dt.17.08.2023, then the assessee may file the application to recall the present order on this issue. In view of the above, the grounds raised by the assessee are dismissed. 10. GROUND NO. 8 With respect to cash deposits of Rs. 32 lakhs, our attention was drawn to para 6.4.2 of the order of ld.CIT(A wherein the ld.CIT(A) has reproduced the remand report of the Assessing Officer, which is to the following effect: "6.4.2 In the Remand Report, the Assessing Officer (NFAC) comments on the above issue, is reproduced hereunder:- "d) Addition of Rs. 32,00,000/- as unexplained cash deposits u/s 68: During the course of assessment proceedings, the AO has noticed that the assessee has made cash deposits to the tune of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see has withdrawn the amounts from the bank account of M/s.Nithin Sai Constructions and had deposited the said amount on the same dates in her bank account. Once the assessee has proved that the cash withdrawn by her was deposited in her bank account on the same day, then it can be said that the assessee has discharged her onus by proving the identity, creditworthiness and source of cash deposits and therefore, no addition can be made in the hands of the assessee. 10.2. Per contra, the ld. DR has submitted that withdrawal of the amount from the bank account of M/s. Nithin Sai Constructions and depositing of the same by the assessee in her bank account on the same dates does not inspire confidence and it is against the human probabilities. 10.3. We have heard the rival submissions and perused the material on record. Admittedly, the Assessing Officer as well as the ld.CIT(A) acknowledged that the cash deposits were withdrawn by the assessee from the bank account of M/s. Nithin Sai Constructions and thereafter, the same were deposited in her bank account on the same dates. 10.4. From the perusal of the remand report of the Assessing Officer which was reproduced by the ld.CIT(A) at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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