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ITAT dismisses revenue's appeal on notional rent & loan interest, citing CBDT guidelines. Appeal deemed non-maintainable. The ITAT dismissed the revenue's appeal on both issues regarding the addition of notional rent for a farm house and interest paid on a loan. The ITAT ...
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The ITAT dismissed the revenue's appeal on both issues regarding the addition of notional rent for a farm house and interest paid on a loan. The ITAT upheld the CIT(A)'s decision based on the tax effect being below the prescribed limit of Rs. 3 lakhs, citing CBDT guidelines and a Delhi High Court decision. The appeal was deemed non-maintainable and contrary to department policy, leading to the dismissal of the department's appeal. The judgment was delivered on 20th June, 2014.
Issues: 1. Whether the CIT(A) was justified in deleting the addition of Rs. 4,20,000/- made on account of notional rent for a farm house. 2. Whether the CIT(A) was justified in deleting the addition of Rs. 40,000/- made under section 24(b) for interest paid on a loan.
Analysis:
Issue 1: The department appealed against the CIT(A)'s order regarding the addition of notional rent for a farm house. The AR for the assessee argued that the appeal was non-maintainable due to the tax effect being below Rs. 3,00,000, citing CBDT's Instruction No.3/2011. The AR referred to previous orders and a Delhi High Court decision to support dismissal of the appeal. The DR did not dispute the tax effect being below the limit. The ITAT agreed with the AR's contention, citing the CBDT guidelines and the Delhi High Court's decision, and dismissed the department's appeal.
Issue 2: The second issue involved the addition of Rs. 40,000 under section 24(b) for interest paid on a loan. The ITAT's decision to dismiss the department's appeal was based on the tax payable being less than Rs. 3 lakhs, in line with the revised CBDT filing limits. The ITAT referred to the CBDT's circular and the judgment of the Delhi High Court to support the dismissal of the appeal. The ITAT held that the department's appeal was contrary to the department's policy decision and dismissed it in limine.
In conclusion, the ITAT dismissed the revenue's appeal in both issues, emphasizing the applicability of the CBDT guidelines and the Delhi High Court's decision. The judgment was pronounced on 20th June, 2014.
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