2017 (9) TMI 1917 - AT - Income Tax

Deemed notional rental income from properties owned - Income from house property - HELD THAT - As found from record that Flat No.16 and 18 at Kalpana Marine drive were duplex flats used by the assessee. Also found that flat no.16 and flat no.18 on 5th and 6th floor respectively having common staircase attached to both the floors inside the said premises and hence it can be considered as one house which is adjacent to each other. Accordingly direct the AO to delete addition made in respect of Flat No.18 for the A.Y.2006-07 to 2009 - From A.Y.2010-11 the assessee has taken Flat No. 8 9 at Kalpana Marine drive as SOP therefore there is no reason to disturb the notional value taken by the AO for Flat No. 16 18 at Kalpana while making addition u/s.22 of the IT Act. Flat No.1 Joothica Co-operative Housing Society Ltd. 22 Naushir Bharucha Road Mumbai 400 007 was claimed to be not in a habitable state and therefore it did not have a ready marketable value. In the interest of justice I restore this issue to the file of AO for verifying factual position and to decide the same afresh as per law. In respect of Flat No.402 West Wind Plot No.170/1 Gandhi Gram Road Juhu Mumbai 400 049 we do not find any infirmity in the order of lower authorities accordingly we confirm the addition made by AO u/s.22. Appeals of the assessee are allowed in part in terms indicated

Summary

Issues:
Appeal against order of CIT(A)-54 for A.Y.2006-07 to 2010-11 regarding deemed notional rental income from properties owned by the assessee.

Analysis:
- The assessee appealed against the addition made on account of deemed notional rental income from properties owned by her for multiple assessment years.
- The AO observed that the assessee had not offered deemed rent from the properties owned by her, except one treated as SOP, leading to a show cause notice being issued.
- The assessee contended that as per Section 23, if a house property has multiple residential units and all are self-occupied, the annual value should be nil as it constitutes one house property.
- The AO rejected the assessee's claim, stating that all residential units should not be considered as one self-occupied property.
- Specific calculations were provided for the income from different properties, including deductions under Section 24 and resulting additions made by the AO.
- The Tribunal found that certain properties constituted one house due to their physical connection and directed the deletion of additions for those properties for specific assessment years.
- The Tribunal ordered a re-verification of the habitable state of a property claimed to be uninhabitable, restoring the issue to the AO.
- The addition made by the AO for another property was confirmed by the Tribunal, finding no issues with the lower authorities' decision.
- The appeals of the assessee were partially allowed, with specific directions for each property, and the order was pronounced in open court on a specified date.