TaxTMI 
TaxTMI 
TaxTMI 
2016 (5) TMI 263
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.... impugned expenditure with the said business. The user of the car for personal purposes could not, in any case, be ruled out. In appeal, the ld. CIT (A) was of the view that the income by way of interest and remuneration to a partner from a partnership firm is rightly assessable as income from other sources u/s. 56. That apart, the expenditure claimed, being on account of professional fees, car repair, car depreciation and interest on car loan (at Rs. 1,07,355/-), had no nexus with the receipt by way of interest and remuneration from the partnership firms. 3. We have heard the parties, and perused the material on record. Without doubt, even as the ld. Authorized Representative (AR), the assessee's counsel, was at pains to emphasize before us, income by way of interest (on capital) and remuneration (against services rendered) to a partner (from a partnership firm) is assessable as business income u/s. 28(v). That being the case, the expenditure, detailed as under, where incurred for business purposes, is liable to be allowed u/s. 37(1) of the Act: Professional fees Rs.5,051 Car repairing charges Rs.25,789 Depreciation on motor car Rs.70,202 Interest on car loan Rs.6,313 T....
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....ses, while using another car (vehicle) for the business purposes of the firms; the assessee stating of his residence being in Santa Cruz (West), Mumbai, while his office is in Santa Cruz (East) (refer para 1(f) of the written submissions dated 01.6.2011 before the ld. CIT(A)/PB pgs. 1-9). In which case, the expenditure on car maintenance would, as other incidental expenditure on car, stand to be incurred by the assessee himself. The question of actual incurring of the maintenance (running) expenditure, and source thereof, though continues. We are conscious that the expenditure on commuting, where claimed by the firm(s) as a part of their business expenditure u/s.37(1), could imply that the firm has extended the said facility to the partner, which though could only be where the car/s is owned by the partnership firms, as distinct from the partner/s. It could also be a case of the same (common) car being used for both, i.e., for commuting to and from work, and for the firm's business, putting the car, thus, to optimum use, besides representing a practical, common-sense approach. It is only in the case of the former, i.e., for commuting, that expenditure would stand to be allowed as a....
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.... In the A.O's view, the assessee had, on account of close nexus between him and the tenant-firms, or otherwise to save on tax, had shown very nominal rental income. On the basis of market inquiries through his Inspector, he estimated Rs. 10,000/- per month and Rs. 7,000/- per month as the minimum rent for the flat and the garages respectively, which he assessed as their annual value u/s. 22. The claim of maintenance charges (Rs.10,096/-) to the housing society/s was also disallowed. In appeal, the assessee, relying on the decision in CIT vs. Shiv Mohan Lal [1993] 202 ITR 60 (All.), claimed that as the house properties under question were being used for the purposes of his business by the assessee-owner, their annual value was not liable to tax u/s. 22. The ld. CIT (A) found the said case law distinguishable in-as-much as in that case the assessee-owner had used the house properties for the purposes of his own business, while in the present case the assessee owner & the company/partnership firms are separate legal entities. The annual value estimated by the A.O. was reasonable. The assessment being confirmed thus, aggrieved, the assessee is in second appeal. 5. We have heard the pa....
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.... 'Y' (say) for the property situate in that area/locality at the relevant time? Rent rates, though based on demand and supply, are also influenced by and dependent on the cost of construction/acquisition of the house property, calculated to yield a reasonable rate. What is the going rate of the relevant properties in the relevant area at the relevant point of time? This, we understand to be the basic question, i.e., the point of difference between the assessee and the Revenue, and which, therefore, needs to be addressed. The assessee's case is completely silent, even up to the stage of the Tribunal, on all these relevant aspects and parameters. Surely, the plea of natural justice cannot be allowed to be used as a ruse. When all the information is available (with the assessee), all that it entails is a comparison between the rate adopted (by the assessee) and that applied (by the A.O.). The adoption of an enhanced rate does not breach the theory of real income inas- much as what the law envisages is the estimation of the annual value, defined as the fair rent that a house property is expected to fetch from year to year (sec. 23). It is only where the actual rent exceeds the fair re....