TaxTMI 
TaxTMI 
2018 (5) TMI 1320
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....eals) erred in facts and in law by confirming the addition amounting to Rs. 5,41 262/- by assuming the Annual Letting out Values of properties @8% when the said properties were used for the commercial purposes. 2. The learned Commissioner of Income tax (Appeals) also erred in facts and in law by confirming a disallowance of Rs. 1,58,123/- under section 14A of the Act when it should not have been done so as the conditions for. 3. The learned Commissioner of Income tax (Appeals) further erred in facts and in law by stating that rectification order was passed for rectifying the error for computing the tax on short term capital gains @ 30% in place of 15% where no such rectification was made, which could have been considered to direct the....
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....contention of the assessee and determined the ALV at 8% of Rs. 96,65,399/- which was calculated by taking the total cost of the properties Rs. 1,13,42,359/- minus the cost of self occupied flats of Rs. 16,76,960/- and after allowing a deduction of 30% under section 24 of the Act in respect of repairs , the resulting amount Rs. 5,41,262/- was added under the head income from house property. 6. In the appellate proceedings, the Ld. CIT(A) also dismissed the appeal of the assessee by observing and holding as under: "4.4 I have considered the submission of the appellant carefully. It is noted that the appellant and the companies listed as user of the properties are different legal entities. The properties in question are owned by the Appella....
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....lternatively, the Ld. A.R. further contended that though the premises were used by the private limited companies which are distinct from the assessee. The undisputed facts are that the majority stocks in the said companies were held by the assessee and assessee is a promoter director in the said companies. The Ld. A.R. also contended that in absence of any rent receipts, the municipal value has to be treated as annual value of those properties. In defense of his argument, the Ld. A.R. relied on the decision of co-ordinate bench of the Tribunal in the case of Veena D. Munganahalli vs. ITO in ITA No.2516/M/2012 for A.Y. 2009-10 and another decision in the case of Deepak Sanghvi vs. ITO in ITA No.6215/M/2013 for A.Y. 2009-10 wherein it has bee....
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....n the contention of the assessee that where the property is used for the business purpose through the private limited companies promoted by him has to be construed as the assessee is carrying on business for the reason that companies as promoted by the assessee are separate legal entities and assessee can not be said to have carried on business through these entities. In the decision of the Hon'ble Madras High Court in the case of CIT vs. K.M. Jagannathan (supra) in which it has been held that where business is carried on by the firm should be regarded as being carried on by all the partners and no property income should be computed in respect of portion of the property occupied by the firm of which assessee is a partner whereas in the pres....
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....otional expenditure can be appropriated for the purpose of exempt income unless and until there is an actual expenditure in relation to earning of such income. However, the contention of the assessee did not find favour with the AO and he finally applied rule 8D and added a sum of Rs. 1,58,123/-. The order of the AO is also affirmed by the first appellate authority by observing that a significant amount of income was earned by the assessee during the year which is exempt and the AO is justified in applying the rule 8D(2)(iii) to make the disallowance and accordingly upheld the addition of Rs. 1,58,123/-. 13. After hearing the rival submissions of the parties and perusing the material on record, we find that the assessee has earned exempt i....