TaxTMI 
TaxTMI 
2016 (10) TMI 9
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....s appeal is regarding disallowance made by the AO u/s 14A read with Rule 8 of the Income Tax Rules, 1962 (hereinafter "the Rule") and set off of carry forward unabsorbed depreciation pertaining to earlier years. The learned Counsel for the assessee stated that he has instructions from the assessee not to press these two issues. Accordingly, both the issues are dismissed as withdrawn. 3. The only surviving issues is as regards to the addition made by the AO and confirmed by the CIT (A) in respect to notional rent added as income from house property u/s 22 of the Act amounting to Rs. 38,48,380/-. 4. Brief facts leading to the above issue are that the assessee Company own six units viz. Unit No.1208, 1203, 1207, 1207A, 1601 and 1601A in the ....
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....der dated 04-10-2012 permitted the withdrawal. The learned Counsel for the assessee further stated that the Assessee Company being a partner in the firm, it is carrying on the business and also carrying on business from the same premises owned by the Assessee Company, there is no need to estimate notional rent. For this argument he took me through the case law of the Hon‟ble Gujarat High Court in the case of CIT Vs Rasiklal Balabhai (1979) 119 ITR 303 (Guj.), wherein the decision of the Hon‟ble Bombay High Court in the case of Shantikumar Narottam Morarji Vs CIT (1955) 27 ITR 69 (Bom) was considered and the same was answered as under:- "7. Broadly, two points would arise for answering the question referred to us, namely, (i) i....
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.... an individual. Although a firm is an assessable entity under the Indian Income-tax Act a firm is not a legal entity. In the eye of the law, a firm is a compendious expression used to indicate that several persons constituting that firm are carrying on a business. But that compendious expression cannot give to the firm a legal entity or a legal existence. In law it is only the partners who exist and who carry on the business. It is equally true that looking to the definition of 'partnership' in section 4 of the Partnership Act, when you have a partnership business, the business is carried on by each of the partners, and the definition of a partnership in the Partnership Act has been incorporated in the Indian Income-tax Act, in sect....
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....er thereof carried on that business. The language used in section 24(2) requires that the business should be continued to be carried on by the individual concerned. The requirements of that section are satisfied when a partner carries on the same business which was carried on previously by him on his sole account. What was urged before us was that the words 'continued to be carried on by him' meant that it was continued to be carried on by him and no other person. There is no warrant for adding the words 'and no other person' having regard to the language used in this sub-section." 9. In view of these two decisions, the first point does not appear to be doubtful at all as to whether a partner of a firm can be said to be c....
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....s itself in manufacturing or producing articles in the industrial undertaking. The Division Bench quoted with approval the passage extracted above from Sitaram Motiram Jain's case [1961] 43 ITR 405 (Guj) and held as under (p. 250): "There is, therefore, nothing in sub-section (6) which should compel us to hold that in the case of a registered firm, the assessee contemplated by sub-section (1) can only be the registered firm and not a partner of the registered firm. Where a registered firm manufactures or produces articles in the industrial undertaking, every partner of the registered firm does so and he would, therefore, be an assessee within the meaning of section 15C, sub-section (1), and would be entitled to claim that no tax is p....
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....carried on business, each partner thereof carried on that business. Following the judgments, we hold that portion of the property used by the partnership firm in which assessee is a partner has to be excluded from the total income. As regard the portion used by the company in which the assessee was share holder and director, the same in our view cannot be considered for exclusion as company has separate and distinct identity and business carried on by the company cannot be considered as business done by share holder or director. Therefore, the portion occupied by the company for its business has to be considered while computing house property". 6. I have considered the issue and noticed the fact that the assessee is a Private Limited Comp....