TaxTMI 
TaxTMI 
2015 (11) TMI 1272
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....by the said firm in its Books of Accounts and Balance Sheet as their asset. c. The sale and capital gains thereof has been disclosed in their income tax return of the said Firm and has been assessed under section 143(3) in the hands of the Firm. 2. On the facts and circumstances of the case and in law the Learned Commissioner of Income Tax (Appeals) erred in treating a single combined house as two distinct properties and thereby taxed the notional income from House Property for a sum of Rs. 1,80,000. The Assessing Officer also made an ad hoc addition of Rs. 1,80,000 as Annual Rental Value which is highly excessive." 2. The facts of the case are that the assessee filed its return of income on 24.11.2009, declaring a total income of Rs. 41,04,689/-. The case was selected in scrutiny in CASS. The assessee is having salary income and income from house property and income from other sources. During the course of assessment proceedings, the assessee was asked to explain why he has not reflected the capital gain arising from sale of property. The assessee explained that the agricultural land being Gut no 405 in Village Bhukum , Taluka Mulshi , District Pune, Maharashtra was....
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....urchaser, firm would have appeared as a confirming party. No such thing has happened. 3. The claim of the appellant that the sale proceeds have been endorsed to the firm will not make any material difference. The proceeds given to the firm will increase the capital balance of. partner. 4. An important thing to observe is that the land sold is an agricultural land. It cannot be acquired by a firm. It can only be acquired by an agriculturist and has to be sold to an agriculturist. When legally, firm cannot acquire the land itself in Maharashtra, it can neither be an owner nor can be a seller. Financing the acquisition will not make the firm owner of the land. Hence appellant is the actual owner of the land and also is the seller. 5. Appellant has argued that land was acquired by the firm and payments were made by the firm, Marine Container Service. It is claimed that it appears in the Balance Sheet of the firm. From the perusal of details I find there is no separate listing of the alleged land and there is no conclusive proof that it was acquired and held by the firm M/s. Marine Container Services. 6. The Assessing Officer has also pointed out that the so called long term....
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.... duly included by MCS. The assessee produced before us the assessment order u/s 143(3) of the Act dated 09th December 2011 passed by The Deputy Commissioner of Income Tax, 12(2), Mumbai in the case of partnership firm MCS whereby there is specific mention of the filing of revised computation of income by MCS to declare capital gain on sale of the said agricultural land of Rs. 80,00,000/- which was not declared by MCS in the original return filed with Revenue but was later declared via revised computation of income filed with Revenue during scrutiny proceedings u/s 143(3) of the Act read with Section 143(2) of the Act. The assessee contended that the Revenue is not prejudice because all the due taxes relating to income arising as capital gain from the sale of the said agricultural land have been duly paid to the Revenue although by the firm, MCS. 6. The Ld. DR relied upon the orders of authorities below. 7. We have considered the rival submissions and carefully perused the relevant material on record. We have observed that the said agricultural land was although registered in the name of the assessee but the same was owned by the partnership firm MCS , the assessee being partn....
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....ing and occupying these two properties which are adjoining flats in the same building . The assessee submitted that the assessee has borrowed the funds from Canara Bank of Rs. 50,00,000/- for purchase of these two flats bearing no. 1502 and another flat bearing no. 1503, situated at 15th floor in the building known as 'Rose', Plot No 10, Kharghar, Navi Mumbai. The assessing officer held that the assessee is entitled for exemption in respect of one house property which is used for his residential purposes whereby annual lettable value shall be determined as Nil under the head 'Income from house property' as per Section 23 of the Act. In respect of the other property, however, the income being annual lettable value has to be brought to tax as per section 23 of the Act under the head 'Income from House Property'. Hence, the assessing officer brought the notional rent to tax at the rate of Rs. 15,000 per month and brought to tax Rs. 1,80,000/- as income from house property. The assessing officer , however, allowed the benefit of statutory deduction for repair and maintenance u/s 24 of the Act and also of the interest of Rs. 1,50,000.00 paid to the bank for borrowing for acquisition of ....