2023 (9) TMI 152 - AT - Income Tax

Disallowance u/s 14A r.w.r. 8D - interest paid by the assessee on LIC loan - Investment in partnership firm by the partner out of loan taken from LIC - HELD THAT - CIT(A) relied upon the judgment passed in the case of Vishnu Anant Mahajan 2012 (6) TMI 297 - ITAT, AHMEDABAD and upheld the disallowance made by the Ld. AO as held that it is case of the partner and therefore what is to be examined is whether the share income is excluded from his total income. The answer is obviously in the affirmative and provision contained in section 14A will come into operation and any expenditure incurred in earning the share income will have to be disallowed In the absence of any assistance rendered by the assessee, we do not find any reason to interfere with the order passed by the Ld. CIT(A). Decided against assessee Addition u/s 23(4) - assessee has shown more than one residential properties - assessee is staying at Mumbai being a self-occupied house property, but no rental/deemed rental income has been shown in computation of total income and show cause why the addition on account of deemed rental income should not be made - HELD THAT - The value has been shown by the Ld. AO on the basis of decision passed in the case of Smt. Radha Devi Dalmia 1980 (3) TMI 62 - ALLAHABAD HIGH COURT and already allowed standard deduction of 30% under Section 24(a) - Hence, in the absence of any assistance rendered by the assessee, we do not find any reason to interfere with the order passed by the Ld. AO and upheld by the Ld. CIT(A) impugned before us. Decided against assessee

Summary

Issues involved:
The judgment involves issues related to disallowance under Section 14A in respect of interest paid by the assessee on LIC loan and the addition of deemed rental income under Section 23(4) of the Income Tax Act, 1961.

Disallowance under Section 14A:
The appeal was directed against the order passed by the Ld. Commissioner of Income Tax (Appeals) arising from the assessment order under Section 143(3) of the Income Tax Act for Assessment Year 2016-17. The disallowance under Section 14A related to interest paid by the assessee on LIC loan, which was made out of interest-bearing funds taken as a loan. The assessee contended that the disallowance was incorrect as the income was earned from various sources and not all of it was exempt. The Ld. CIT(A) upheld the disallowance based on a judgment by the Special Bench, ITAT Ahmedabad. With no assistance from the assessee, the Tribunal found no reason to interfere with the order, dismissing the appeal.

Addition of Deemed Rental Income under Section 23(4):
The addition of Rs. 4,95,647 under Section 23(4) was made as the assessee failed to show rental income for multiple residential properties. The assessee's explanations were deemed unacceptable due to lack of supporting documents. The Ld. AO computed the deemed rent at 7% of the property value as per the balance sheet, following the decision of the Allahabad High Court. The Ld. CIT(A) upheld the addition, stating that the valuation was based on the court decision and the standard deduction had already been allowed. The Tribunal, finding no merit in the appeal and no assistance from the assessee, upheld the order, resulting in the dismissal of the appeal.