Disputed property spaces remanded for fresh examination, business-occupied properties excluded from rental income calculation

ITAT Delhi ruled on multiple house property and business income issues. Regarding disputed 23 spaces/flats (7511 sq ft) in Jyot Shikar Building without municipal approval, matter was remanded to AO for fresh examination with proper evidence. CIT(A)'s exclusion of properties occupied for business purposes was upheld under section 22. Properties with rent treated as business income were correctly excluded from ALV calculation following precedent assessment years. Five percent annual ALV increase was deleted due to lack of comparable evidence. Section 14A disallowance on dividend income was dismissed as assessee had sufficient own funds per Supreme Court ruling. Advance lease rent deduction claim was remanded for fresh consideration. Delayed PF contribution disallowance was deleted following Delhi HC precedent allowing deduction if deposited before return filing.

---

---

Issues:
1. Appeal against the order of the ld. CIT(A) for Assessment Year 2013-14 and 2014-15.
2. Annual Letting Value [ALV] of unsold flats shown as stock in trade.
3. Non-exclusion of ALV of spaces/flats under litigation/disputes.
4. Addition of notional ALV taking market value.
5. Deletion of addition made under section 14A r.w.r 8D of the Rules.
6. Claim of deduction for advance lease rent money.
7. Deletion of disallowance on account of employee's contribution to PF.
8. Claim of lease rent.

Analysis:

1. The cross-appeals by the assessee and the Revenue were preferred against the order of the ld. CIT(A) for Assessment Year 2013-14 and 2014-15. Common issues were heard together and disposed of for convenience.

2. The issue of ALV of unsold flats as stock in trade was decided against the assessee based on a previous court decision. Ground No. 1 and 1.2 were dismissed.

3. The non-exclusion of ALV of spaces under litigation was restored to the Assessing Officer for fresh examination due to lack of submitted evidence. Ground No. 2 was allowed for statistical purposes.

4. Addition of notional ALV based on market value was dismissed as the ground was not contested seriously by the assessee.

5. The disallowance under section 14A r.w.r 8D of the Rules was deleted by the ld. CIT(A) based on the assessee having sufficient own funds, which was upheld.

6. The claim for advance lease rent money was allowed by the ld. CIT(A) but was restored to the Assessing Officer for fresh examination as it was raised for the first time before the ld. CIT(A).

7. The disallowance on account of employee's contribution to PF was deleted by the ld. CIT(A) as the amount was deposited before filing the return of income, following a relevant court decision.

8. The claim of lease rent was allowed for statistical purposes based on previous findings. The appeals were partly allowed for statistical purposes.

This detailed analysis covers the various issues raised in the judgment, providing a comprehensive overview of the legal proceedings and outcomes.

---