TaxTMI 
TaxTMI 
2019 (9) TMI 207
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.... 2. On the given facts, circumstances and judicial pronouncements; Learned Commissioner of Income Tax Appeals erred in not passing any direction as regards property at Vora Apt., Ghatkopar, even though the same was Self Occupied by the assessee. 3. Without prejudice to the above, On the given facts, circumstances and judicial pronouncements; when the order giving effect is passed by the Ld. AO the property at Vora Apartments should be treated as Self Occupies Property and relief to that extent should be given. 4. On the given facts, circumstances and judicial pronouncements; Learned Commissioner of Income Tax Appeals erred in not passing any direction as regards the property at Wanworie, Pune. 5. Without prejudice to the above, On the given facts, circumstances and judicial pronouncements; the property at Wanworie, Pune should be assessed to tax under the head Income from House Property as deemed let out on the basis of the municipal valuation. 6. On the given facts, circumstances and judicial pronouncements; learned Commissioner of Income Tax Appeals erred in directing the Ld. AO to recomputed the unearned income from let out house property ....
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....Rent received, Mahape property as per statement 4,00,000/- Annual value of two flats 7,43,760/- 11,43,760/- Less: Deduction u/s. 24(a) 3,43,128/- 8,00,632/- 2. Deemed dividend under Sec. 2(22)(e) of the Act. Rs. 13,37,681/- 3. Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, the CIT(A) not finding favour with the contentions advanced by the assessee as regards the additions made by the A.O towards 'deemed dividend' under Sec.2(22)(e) of the Act, upheld the same. As regards the addition made by the A.O towards 'Annual Lettable Value' (for short 'ALV') of the properties owned by the assessee, it was noticed by the CIT(A) that the assessee owned three flats and one office premises. It was observed by the CIT(A) that the assessee had in his computation of income offered for tax rental income of Rs. 4,00,000/- only in respect of one of his property viz. Mahape, Navi Mumbai. As regards an another property of the assessee at Clover Regency, Ghatkopar, it was t....
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....and perusing the orders of the lower authorities. The ld. Departmental Representative (for short 'D.R') had relied on the orders of the lower authorities. 5. We shall now advert to the various issues as regards which the order of the CIT(A) has been assailed by the assessee before us. We shall first advert to the claim of the assessee that now when he had filed with the CIT(A) a copy of the "final possession letter", dated 14.01.2011 in respect of his property at Clover Regency, Ghatkopar, which revealed that the said property during the year under consideration viz. A.Y. 2009-10 was under construction, therefore, the CIT(A) was in error in directing the A.O to verify the said factual position. We have given a thoughtful consideration to the said claim of the assessee and are unable to persuade ourselves to subscribe to the same. In our considered view, as the assessee had filed a copy of the "final possession letter" of the aforesaid property for the very first time before the CIT(A), therefore, he had in all fairness directed the A.O to verify the factual position as was claimed by the assessee before him. In fact, we are of a strong conviction that as the aforesaid "final ....
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....to be in order, then the property of the assessee at Vora Apartment, Ghatkopar, which as claimed by the assessee was under his self-occupation during the year shall be worked out as per Sec.23(2)(a) of the Act. However, the A.O while giving effect to our aforesaid directions shall make necessary verification as to whether the aforesaid property viz. Vora Apartment, Ghatkopar, during the year under consideration i.e A.Y. 2009-10 was under the selfoccupation of the assessee, or not. Needless to say, the assessee in the course of the 'set aside' proceedings shall be afforded a sufficient opportunity by the A.O to substantiate his aforesaid claim. The Grounds of appeal Nos. 2 & 3 are allowed for statistical purposes in terms of our aforesaid observations. 7. We shall now advert to the claim of the assessee that the lower authorities had erred in not working out the ALV of his property at Wanworie, Pune, on the basis of the 'municipal valuation'. As is discernible from the orders of the lower authorities, we find, that the A.O without placing on record any supporting material had after estimating the rate of rent in respect of the property under consideration @ Rs. 20/- per sq. ft. w....
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....s on record. We find that it is the claim of the assessee that the property under consideration had during the year remained let out only for a period of 8 months, and thus, for the said reason the rent for the remaining 4 months was not accounted for as a part of his income in the return of income. In our considered view, as the CIT(A) had in all fairness directed the A.O to re-compute the total income from the property at Mahape, Navi Mumbai, as per the facts on record, therefore, no infirmity does emerge from the said direction. Accordingly, not finding favour with the aforesaid claim of the assessee, we uphold the view taken by the CIT(A). The Grounds of appeal Nos. 6 & 7 are dismissed. 9. We shall now advert to the addition of Rs. 13,37,681/- made by the A.O under Sec. 2(22)(e) of the Act. As observed by us hereinabove, the aforesaid addition under Sec.2(22)(e) had been upheld by the CIT(A). Briefly stated, the assessee during the year under consideration owned 22.11% of the total shares of M/s Nishotech Systems Pvt. ltd. (now known as Nishitech System Pvt. Ltd.) and 20% of the total shares of M/s Sanitech Engineers Pvt. ltd. It was observed by the A.O that M/s Nishotech....
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....ring the year under consideration was the 'beneficial owner' of shares (not being shares entitled to a fixed rate of dividend whether with or without a right to participate in profits) holding not less than 10% of the voting power, in both of the aforementioned companies viz. (i) M/s Nishitech Systems Pvt. Ltd.; and (ii) M/s Sanitech Engineers Pvt. Ltd. As per clause (e) of Sec. 2(22) of the Act, any payment by a company not being a company in which the public are substantially interested, of any sum, by way of an advance or loan to a shareholder, being a person who is the beneficial owner of shares (not being shares entitled to a fix rate of dividend whether with or without a right to participate in profits) holding not less than 10% of the voting power, or to any concern in which such shareholder is a member or a partner and in which he has substantial interest or any payment by any such company on behalf, or for the individual benefit, of any such shareholder, to the extent to which the company in either case possesses accumulated profits shall be included within the definition of 'dividend'. As per the "Explanation 3" to Sec. 2(22) of the Act, the term "concern" means a Hindu u....