2021 (12) TMI 542 - AT - Income Tax

Income from house property - determination of ALV of the property - HELD THAT - As after considering the ALV of ₹ 35,000/- per month which was the benchmark value for FY 2009-10 after the order of the CIT(A) and after considering the incremental rise in rent. We find, the CIT(A) upheld the action of the AO, the reasons of which have already been reproduced in the preceding para - as submission of the ld. Counsel for the assessee that certain additional evidences have not been considered either by the AO or by the CIT(A) which have subsequently come to light and which have a bearing on the facts of the case - we find there is nothing on record to suggest as to what is the fate of the case after the ld. CIT(A) upheld the issue of annual letting value (ALV) of the property during FY 2009-10 by reducing the same to ₹ 35,000/- as against ₹ 40,000/- determined by the AO. Thus finality of such order could not be explained by either side. Further, the fate of the case for AY 2012-13 and prior to that are also not available before us and the ld. Counsel for the assessee could not throw any light on the same. We deem it proper to restore the issue to the file of the AO with a direction to adjudicate the issue afresh and after giving due opportunity of hearing to the assessee. He shall verify the record for the past years and also the various evidences filed by the assessee which were not considered by the CIT(A) as well as the AO and decide the issues as per fact and law - The grounds raised by the assessee are accordingly allowed for statistical purposes.

Summary

Issues:
- Addition of notional rent for assessment years 2013-14 and 2014-15
- Disallowance of car expenses for assessment years 2013-14 and 2014-15

Analysis:

Issue 1: Addition of Notional Rent
The appellant challenged the addition of notional rent for both assessment years, arguing that the property in question was not let out due to legal constraints. The Assessing Officer (AO) determined the annual letting value (ALV) based on previous assessments and rental increase. The Commissioner of Income Tax (Appeals) upheld the AO's decision, rejecting the appellant's contentions regarding the property's letability. The appellant further submitted additional evidence, which was not considered. The Tribunal found discrepancies in the handling of the case by both the AO and CIT(A), lacking clarity on the finality of previous decisions. Consequently, the Tribunal remanded the issue to the AO for fresh adjudication, emphasizing the importance of considering all evidence and past records to decide the matter accurately.

Issue 2: Disallowance of Car Expenses
The appellant contested the disallowance of car expenses, citing limited resources and lack of a logbook. The CIT(A) upheld the disallowance, noting the absence of proper documentation. However, the Tribunal's decision to remand the notional rent issue also indirectly impacts the car expenses issue, as a comprehensive review of all evidence and past decisions is mandated. The Tribunal's direction to the AO to re-examine the case ensures a fair assessment of all aspects, including the car expenses disallowance, based on complete information and legal considerations.

In conclusion, the Tribunal's judgment highlights the significance of thorough examination and consideration of all relevant factors in tax assessments, ensuring a just and accurate determination of tax liabilities. The remand of the issues to the AO for fresh adjudication underscores the importance of procedural fairness and adherence to legal principles in tax matters.