TaxTMI 
TaxTMI 
2011 (11) TMI 512
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....ouse at Rs.2,52,000/-. 2. That on the facts and in the circumstances of the case and in law, both the lower authorities erred in arriving at the conclusion that the appellant owns 3 flats which in fact are only 2 flats and the value of the 2 flats appear in the balance sheet which has been treated as the third flat by the lower authorities." 3. Facts of the case in brief are that during the course of assessment proceedings the A.O. noted that the assessee is owning 3 ownership flats. One flat premises of Rs.21,24,855/- is appearing in the balance sheet and two ownership flats being flat No. 601and 602 in Gaurav Plaza. In the absence of specific choice of the assessee the A.O. treated the flat premises other than Gaurav Plaza....
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....r it is revealed that the builder had made separate agreement for separate flats in respect of other buyers in the building but in the case of the assessee, only one agreement was made for flat No. 601 and 602. Further, the assessee has also made alteration for keeping only one entrance for both the flats. In view of the above, it can be concluded that assessee has two flats in Gaurav Plaza and therefore should have offered deemed rent for taxation in respect of one flat. 3.2 The ld. CIT(A) confronted the assessee with the remand report obtained from the A.O. The assessee submitted that the builder has entered into one single agreement for flat No. 601 and 602 which was given to the assessee in lieu of the old tenanted premises bein....
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....he Ward Inspector who inspected the premises also confirmed that the assessee has made alteration and there is only one entrance for both the flats. Referring to the decision of the Tribunal in the case of Prem Prakash Bhutani vs. ACIT reported in [2007]110 TTJ 440 (Del) he submitted that in the said case the assessee who acquired three flats out of capital gain and used them for residence of his family was entitled to exemption u/s. 54 in respect of all the three flats. He submitted that since the assessee in the instant case has occupied both the flats having common entrance and common kitchen, therefore, there should not be any addition on account of notional rent. So far as the finding of the A.O. that the assessee is owning three flats....
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.... be considered as single one in our opinion is un-called after the report of the Ward Inspector communicated to the CIT(A) by the A.O. in the remand report. We, therefore, hold that the assessee, who is the owner of flat No. 601 and 602 at Gaurav Plaza has occupied both the flats as a single unit for the purpose of residence of his family members and therefore no notional rent can be brought to tax. In this view of the matter we set aside the order of the ld. CIT(A) and grounds of appeal No. 1 and 2 by the assessee are allowed. 7. Ground of appeal No. 3 by the assessee reads as under:- " The learned CIT(A) on the facts and in the circumstances of the case wrongly confirmed the disallowance of 30% of rent amounting to Rs.3,77....
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....oming to any conclusion. We, therefore, restore the matter to the file of the A.O. with a direction to adjudicate the issue afresh keeping in mind the decision of Hon'ble Supreme Court in the case of Shambhu Investment reported in 263 ITR 143. We hold and direct accordingly. This ground by the assessee is accordingly allowed for statistical purpose. 8. Ground No. 4 by the assessee reads as under:- "That the learned CIT(A) wrongly confirmed the addition of Rs.1,38,334/- as interest paid to the bank for the loan of Rs.25,00,000/- taken for flat No. 601/602 towards construction i.e. tiling of floor and walls." 8.1 Facts of the case in brief are that the assessee claimed interest on housing loan to the extent of Rs.1,38,334/-. ....
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.... respect of house property from where the appellant has received rental income of Rs.377000/- from 22 persons and claimed as income from other sources. In view of this the Assessing Officer has disallowed the loan. The remand report of the Assessing Officer is silent on this issue and I find that the appellant is now during the appellate proceedings stated that the loan of Rs.25 lacs was taken from Oriental Bank of Commerce for flooring and electrical fittings of flat purchased in Gaurav Plaza. No documentary evidence to substantiate this statement has been submitted. I also find that the appellant has changed her statement from what was given during the course of assessment proceedings without explanation. In view of this, I am not incline....