ITAT partially allows appeal, remits HUF income issue, upholds rent disallowance & interest levy.

The ITAT partially allowed the appeal by deleting the disallowance of accounts writing charges and remitting the issue of HUF income back to the AO for further verification. However, the ITAT upheld the disallowance of rent paid and depreciation claimed on the flat in Mumbai and the levy of interest under the relevant sections.

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Issues Involved:
1. Disallowance of payment of Accounts writing charges under section 40(a)(ia)
2. Addition of HUF income
3. Disallowance of rent paid and depreciation claimed in respect of flat at Mumbai
4. Levy of interest

Analysis:

1. Disallowance of payment of Accounts writing charges under section 40(a)(ia):
The appellant contested the disallowance of accounts writing charges under section 40(a)(ia) amounting to Rs. 48,000 for not deducting TDS under section 194J. The appellant argued that the payment was made to a part-time employee and hence not liable for TDS. The ITAT held that the person receiving the payment was not a professional under section 194J as they were simply feeding details into a computer and not providing professional services. The ITAT directed the AO to delete the addition under section 40(a)(ia) as there was no employer-employee relationship and the payment was not subject to TDS.

2. Addition of HUF income:
The dispute arose from the addition of HUF income in the hands of the appellant. The AO added the profits earned by the HUF to the appellant's income, alleging that both entities were managed by the appellant and operated from the same address. The ITAT found that there was no conclusive evidence to prove that the HUF and the appellant's business were interlinked. The ITAT remitted the issue back to the AO for further verification, instructing the appellant to provide relevant details to establish the independence of both businesses. The ITAT allowed the ground raised by the appellant for statistical purposes.

3. Disallowance of rent paid and depreciation claimed in respect of flat at Mumbai:
The appellant claimed rent paid and depreciation on a flat in Mumbai used by their son for business purposes. The AO determined that the flat was jointly owned by the appellant and their son, with each using it for different purposes. The AO treated the property as deemed let out under section 23(4)(b) of the Act. The ITAT upheld the AO's decision, dismissing the appellant's claim regarding the rent paid and depreciation on the flat.

4. Levy of interest:
The appellant challenged the levy of interest under sections 234A, 234B, and 234C of the Income Tax Act, 1961. The ITAT deemed the issue as consequential and did not require adjudication, thereby upholding the levy of interest.

In conclusion, the ITAT allowed the appeal in part by deleting the disallowance of accounts writing charges and remitting the issue of HUF income back to the AO for further verification. However, the ITAT upheld the disallowance of rent paid and depreciation claimed on the flat in Mumbai and the levy of interest under the relevant sections.

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