TaxTMI 
TaxTMI 
2025 (11) TMI 413
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....nt on the Tax Consultants for such type of appellate work, I am satisfied that 'reasonable cause' prevented the assessee to file the appeal within the stipulated time. I therefore adopting justice oriented approach and taking guidance from the judgments of Hon'ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) I condone the delay of 166 days in filing of the instant appeal before this Tribunal and admit the appeal for adjudication. 3. The only issue raised by the assessee is that ld.CIT(A) erred in confirming the addition towards notional rent income at Rs. 44,43,100/- from letting out house property. 4. Facts in brief are that the assessee is an individual and income of Rs. 18,44,610/- declared in the e-return for A.Y. 2018-19 furnished on 26.09.2018. Case selected for Complete Scrutiny for the issue about 'Income from House Property'. Assessee furnished the details called for by ld. Assessing Officer (AO) in the notices issued u/s. 142(1) of the Act. Valid statutory notice also issued u/s. 143(2) of ....
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.... 1. Land and Construction at 1221,B/1, Wrangler, Paranjape Road, Pune, Maharashtra. 2. 6, Vertex Arcade, 1281, Sadashiv Peth, Pune, Maharashtra 3. Shop No.A8, Shree Venkatesh Puram, Ambegaon, Pune 4. Office at Sr.No.1205/1/10, Shivaji nagar, Pune 9. Before me, ld. Counsel for the assessee submitted that since these properties have been used by the partnership firm for business purposes in which the assessee is a partner, therefore, in view of decision of Coordinate Bench, Mumbai in the case of Dhadda Diamonds Pvt. Ltd. Vs. ITO (supra) the addition on notional rent deserves to be deleted. I find that in the decision referred by ld. Counsel for the assessee in the case of Dhadda Diamonds Pvt. Ltd. Vs. ITO (supra) similar issue was raised and the decision was rendered in favour of the assessee by observing as under : "5. I have heard the rival contentions and gone through the facts and circumstances of the case. Before me, the learned Counsel for the assessee first of all drew my attention to the assessee's paper book page 95 wherein a copy of a letter was filed before the Tribunal withdrawing the appeal on the ground that the past unabsorbed....
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....: "Mr. Joshi says that a firm under the Indian Income-tax Act is an assessable entity and, therefore, a distinction must be made between a business carried on by a firm and a business carried on by 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 section 2(6B). Therefore, the contention that section 10(1) cannot apply to a partner in a registered firm is untenable because he does carry on the business although that business happens to be a partnership business, and, therefore, if any profits and gai....
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....in the sense that it was not liable to pay firm tax since it was in 1956 that the Indian I. T. Act, 1922, was amended so as to make the firm liable to pay firm tax. We must frankly admit that we are not impressed by this distinction which is without any difference. The question is : can it be said that the partner is carrying on his business when the business is that of a firm in which he is a partner ? The same question came up for decision before this court again in CIT v. Arun Industries [1966] 61 ITR 241 (Guj) in a slightly different context. It involved a question of interpretation of s. 15C of the Indian I. T. Act, 1922, in its application to a registered firm and arose out of the assessment of a registered firm for the assessment year 1961- 62. The question was whether exemption under s. 15C was available both to the registered firm and to the partners. In that perspective the Division Bench of this court, consisting of J. M. Shelat C.J. and P. N. Bhagwati J. (as they then were), was faced with a problem whether the benefit under s. 15C(1) is also available to a partner in a firm which engages itself in manufacturing or producing articles in the industrial undertaking. The D....
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.... 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 Company and is a partner in a Partnership Firm which carries on business from the same premises which is owned by the assessee. In such circumstances, whether rent from house property is to be assessed u/s 22 of the Act as notional rent or not, the issue has been answered by the Hon'ble Bombay High Court in the case of Shantikumar Narottam Morarji v. CIT [1955] 27 ITR 69. Subsequently, the same has been followed by the Co-ordinate Bench of the Tribunal in the case of Smt. Indira Jain (supra). Respectfully, following the same principle, I am of the view that notional rent u/s 22 of the Act cannot be charged in the given facts and circumstances of t....
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....s that assessee is having 50% ownership. Provisions of section 22 are applicable for this property also. The amount of notional income is shown as Rs. 3000/- only (Net-Rs.2100/-) because the software program does not have facility to show property as well as claim U/S 22 of the IT Act 1961. The estimate of monthly rent of Rs. 85000/- is totally incorrect as well as bad in law. 9) Note No.7:- Office At Sr. No. 1205/1/10, Shivajinagar, Pune is a property owned by assessee jointly with Arch Vikas Achalkar & is having 50% ownership. Copy of index II is already submitted which shows that assessee is having 50% ownership. Assessee is carrying out a profession in partnership under the name and style M/S. A & T Consultants from this place and income of the same firm is shown as business income of the assessee in his IT Return which is earned from this place only. Copy of IT Return of the said firm is attached separately as a supporting proof that this property is being used for business purpose. Section 22 excludes from its charge income from any house property or any portion thereof which is occupied by the owner for the purposes of his business or profession. Also estim....