TaxTMI 
TaxTMI 
2021 (5) TMI 143
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....ce of school building during the year. 3. Whether on facts and circumstances of the case the learned CIT( A) erred in not deleting the additions of Rs. 1,00 ,00 ,000/- made by the A.O. in respect of interest paid on secured loan, utilized for construction of school building, in respect of which full rental income of Rs. 2,75 ,00, 000/- is included in the computation of taxable income of the assessee. 4. The CIT(A) grossly erred in computing the ALV of the School Building at Rs. 3 ,47 ,77,778/- by applying the rate of 8% on total cost of land and building. Thus enhancing the ALV of the school building, let out by lease agreement for consideration of Rs. 2 .75 crore per annum, and thereby enhancing the taxable income by Rs. 72 ,77,778 /-." 3. Ground No. 1 relates to addition of Rs. 50 ,00, 000/- on account of unexplained cash credit. The AO has observed that during the course of the assessment proceedings, the assessee had shown to receive a loan of Rs. 50 ,00,000 /- as an advance for sale of land at the village Shilatne, Maral, Lonawala, from M/ s Kakade Stone Crushers. The assessee has submitted a confirmation in this regard. Notice u/ s 133(6 ) was issued by t....
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....ng that transaction was through banking channels or account payee instruments; surrounding and corroborative factual details are equally important- held, yes- in respect of issuing shares, Tribunal had notices but not given due credence to surrounding circumstances which included a huge premium equivalent to four times of face value of shares, credit entries in bank accounts before transfer of money to assessee, failure of companies to file details of inventories/ schedule of investments and fact that assessee-company had not charged any premium earlier- It was not known why and for what reasons assessee was not able to produce principal officer or director of shareholder companies- Whether all these aspects were required to be gone into the Tribunal in detail- held, yes [Para 11 to17] [ Matter remanded] IT; Creditworthiness of shareholders and genuineness of transaction in all cases is not established by only showing that transaction is through banking channels or account payee instrument; surrounding and corroborative factual details are equally important." 9. Heard the arguments of both the parties and perused the material available on record. 10. We find that the advance ....
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....Since, this is revenue expense and hence charged to profit and loss account. 15. The ld. DR argued that the assessee is receiving only rental income against which it is claiming standard deduction and interest on borrowings. Further, this expenditure is not administrative expenses as claimed buy it in the profit and loss account, rather it is an architect fees paid for the project of school building for which it has already claimed and allowed statutory deduction. 16. On going through the facts on record, we find that the assessee is receiving rental income against which interest and others statutory deduction are claimed and hence no other deduction on account of maintenance charge or any other nomenclature is not an allowable deduction. Appeal of the assessee on this ground is dismissed. 17. Ground Nos. 3 & 4 relates to disallowance of interest paid on loan raised for construction of the school building and computation of ALV @ 8% of the total of the land and building. 18. At the outset, both the parties agreed that the matter stands covered by the order dated 22.06 .2018 of the Tribunal in ITA No. 6177 /Del/2014 for the assessment year 2010-11 in the assessee' s own ....
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....uld be the reasonable rent that the property under reference might fetch. If the A.O. finds that actual rent received is less than the fair rent/ market rent because of certain reasons, the A.O. can take necessary exercise in that behalf. Hon' ble Delhi High Court in the case of CIT vs. Moni Kumar Subba (supra), in para-20 has given its conclusion, reproduced above, in which, it was observed that willingness of the lessor and lessee shall have to be considered and extraneous considerations should, be avoided. Such annual letting value, however, cannot exceed the standard rent as per Rent Control Legislation applicable to the property. If the standard rent has not been feed by the Rent Controller, then, it is the duty of the A.O. to determine the standard rent as per provisions of Rent Control enactment. The standard rent is upper limit, if the fair rent is less than the standard rent, then, it is the fair rent which shall be taken as annual letting value and not the standard rent. In the present case, the assessee explained all the facts, before A. O. with regard to rent received and that the property was let out earlier and in the case of lessee CVT, it is pleaded before ITAT, Mum....