TaxTMI 
TaxTMI 
TaxTMI 
2025 (2) TMI 1386
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....d therefore the ALV of the said property was to be taken at 'Rs. Nil" as provided U/sec 23(1)(c )of the Act. 1.2. Without Prejudice, the Id. Commissioner of Income tax (Appeals)erred in adding notional rent U/sec 23(1)(a) of the Act at Rs. 28,23,973/- based on actual rent received from another property of the Appellant ignoring the fact that actual rent received from the said premises in AY 2010-11 was just Rs. 73,524/- p.a. and therefore, the notional rent can not exceed the municipal ratable value of Rs. 1,91,183/-, i.e. the municipal tax of the said premises. 2. Ground No.2: The appellant craves leave to add, amend, alter, modify, delete and/or change all or any of the above grounds on or before the date of hearing" Brief facts of the case are as under: 2. The assessee is a Partnership Firm formed in the year 1984- 85 having income from House Property i.e. Rent from lease of its premises situated at Ground Floor, Shree Amba Shanti Chambers, Opp. Hotel Leela, Andheri Kurla Road, Andheri (East), Mumbai- 400 059. The assessee invested in the said premises on which no depreciation was claimed. The assessee leased out the said premises to Yes Bank....
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....further observed that, the assessee claimed expense of Rs. 8,04,915/- in both 'House Property Schedule and Business and Profession' Schedule in the ITR. Since, during the assessment proceedings, the assessee failed to furnish any documentary evidences in support of its claim, the Ld.AO disallowed the Rs. 8,04,915/-. Thus, making total disallowance of Rs. 32,83,826, the gross rental receipts of Rs. 90,67,952/- were assessed by the AO as Income under the head 'Income from Business & Profession. 2.5. Further, the Ld.AO made addition of Rs. 7,91,06,000/- as unexplained investment u/s 69 of the Act, as the assessee did not explain the source of investment in immovable property. Aggrieved by the order of the Ld.AO the assessee preferred appeal before the Ld.CIT(A). 3. On notional rental income computed in the hands of the assessee, the Ld.CIT(A) observed as under: 7.10 To conclude the discussions made in preceding paragraphs, it is hereby decided that rental proceeds of Rs. 90,67,952/- received by the appellant from Yes bank Ltd. during the year on account of lease of property: Shree Amba Shanti Chambers) is not the business income of the appellant but 'Inc....
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....y reflected in the books of the account of the appellant for the period ended 31.03.2014 and the source of the said investments is also explained. Consequently, the addition of Rs. 7,91,06,000/- made by the A.O. u/s 69 of the Act in the impugned order dated 20.03.2022 treating the above investment as 'unexplained' is hereby deleted. The ground of appeal no. 3 taken up by the appellant is therefore allowed. 8.5 It is pertinent to mention here that the provisions of section 56(2)(vii)(b) as applicable to AY 2014-15 under consideration providing for taxation of the difference between the stamp duty value of the immovable property and actual consideration as income of the purchaser were applicable only to Individual and HUF assessees, and thus not applicable to the appellant being a partnership firm. The provisions were subsequently amended to include all types of assessees only w.e.f. 01.04.2017 u/s 56(2)(x) and hence not applicable to the AY 2014-15 under consideration in this case 3.2. The Ld.CIT(A), in addition to the above observed that assessee has made payments towards property tax in respect of the property in an Anupam society, which was not leased out. Ass....
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....ers', Andheri Kurla Road. The property lax paid by the appellant for the Anupam society building for the FY 2013-14 was Rs. 1,91,183/-. Thus, by applying the same percentage and doing reverse calculation, the gross notional annual rental value of 'Anupam Building, Malad comes out to be Rs. 28,23,973/-. Accordingly, the notional rental Income from House Property (Anupam Building) u/s 23(1)(a) is worked out as under: Notional Rent received from let out of Anupam Building, Malad Rs 28.23,973/- Less Property Tax Paid Rs 1,91,183/- Net Annual Value Rs. 26,32,790/- Less Standard Deduction @30% Rs. 7,89,837/- Income from House Property (Anupam Building): Rs. 18,42,953/- Aggrieved by the order of the Ld.CIT(A) the assessee is in appeal before this Tribunal. 4. The Ld.AR submitted that, the authorities below erred in not considering the fact that the property at 'Anupam' was vacant since AY 2009-10 due to disputes with earlier lease and therefore the ALV of the said property was Rs. NIL as provided U/sec 23(1)(c) of the Act as the same was vacant for the "whole year". He placed reliance on Section 23(1)(c) provides that reads a....
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....spect of Amba Shanti Chambers. It is noted that the assessee had claimed the property taxes paid against the premises as expenditure. 5.2. Further in respect of premises at Anupam society, the assessee had not declared any rental income under the head income from house property but had claimed the property taxes paid as expenditure. 5.3. The Ld.AR argued that even the legislature has recognized the impossibility of letting out the property immediately on completion and, therefore, notified sub section (5) to section 23 and, therefore, the provisions of sections 23 and 24 should be interpreted keeping in mind the subsequent introduction of section 23(5). The Ld.AR also submitted that sections 22 & 23 have to be interpreted reasonably and in a manner that it cause no hardship to the assessee. The Ld.AR therefore submitted that the annual value of the unsold units should be ignored or to be taken as Nil. 6. Admittedly, there is no evidence please don't record by the assessee that the premises and Anupam society was sub judice and therefore it could not have been let out. The documents filed by the assessee in respect of the suit filed with honourable small causes court attain....