1984 (7) TMI 188

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....e ITO on 26th March, 1981 was erroneous on two accounts, viz., firstly the ITO has allowed the vacancy allowance claimed by the assessee in respect of house properties at 9, Godown Street and No. 6, Shaffee Md. Road, Madras. In respect of the latter property, the annual value taken by the ITO was also very low and secondly the assessee paid salary of Rs. 12,000 to his wife, Mrs. Cherry Venkatsan which was allowed as deduction without considering the applicability of provisions of s. 64(1)(ii) of the Act. Therefore, the order passed by the ITO was erroneous insofar as it was prejudicial to the interests to the Revenue and, consequently, after observing the principles of natural justice the CIT set aside the order with suitable directions. ....

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....77,618 and the location in good residential-cum-office area. In law, the ITO has to determine the sum for which the property was let our from year to year and as the ITO has not actually determined that sum the order was erroneous and prejudicial to the interests of the Revenue. Similarly, the payment of remuneration to Mrs. Cherry Venkatesan requires to the included under s. 64(1)(ii) of the Act but the ITO failed to consider the same. Hence the order of revision by the CIT. 3. The ld. Counsel for the assessee has been heard at length. According to him, the CIT has no jurisdiction to revise the order passed by the ITO inasmuch as the issue relating to income from property was the subject-matter of appeal before the CIT (A) and, therefor....

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.... claim. Therefore, he strongly urged that the order of the CIT should be set aside and that the ITO be restored. 4. The ld. Departmental Representative, on the other hand, supported the order of the CIT as, according to him, the doctrine of merger did not apply as the issue regarding determination of income from property was withdrawn by the assessee. He relied on several decisions of the Courts to support the order of the CIT. 5. We have only considered the rival contentions. Although the assessee has withdrawn the ground relating to determination of income from house property and the CIT (A) has dismissed the ground as withdrawn by the assessee, nonetheless the effect of the order of the CIT (A) is that the order of the ITO on that ....