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TMI Blog2015 (9) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... material is brought on record to controvert the transaction. Further as brought on record by the learned counsel, the department itself in the subsequent year has accepted the rent received from husband as chargeable to tax under the head income from house property. Thus, on the facts of the case, the assessee’s income from letting out the property is to be taxed under the head “income from house property” - Decided in favour of assessee. Disallowance made u/s 14A read with Rule 8D - Held that:- Assessee has shown income under the head salary, income from house property, capital gains and interest income, which is mainly from saving bank account and FDR. From the perusal of the P&L Account, it is seen that assessee has debited ₹ 1, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner of a house property who has filed her return of income at an income of ₹ 1,39,38,925/-. Such a return of income also included income from house property computed at ₹ 12,65,575/- on a gross rent of ₹ 18,25,000/-. On the verification of the details of rent, the AO noted that assessee has received the rent from her husband in respect of the property which was also occupied by the assessee herself. He observed that the assessee has received rent from her husband in respect of self occupied property and therefore, there is no relationship of lessor and lessee. Accordingly, he held that the rental income received by her cannot be taxed under the head income from house property and accordingly, the claim of municipal taxes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e wife. Thus, when the assessee was residing with her husband, then she was under a conjugal right and the responsibility of maintenance is with the husband, which also includes providing residence. Otherwise also, there is no prohibition under the Act that wife cannot charge rent from her husband. Here in this case the property is owned by the assessee and the assessee has all the rights to let out her property to any person including her husband. Learned counsel further brought to our notice that in the subsequent assessment year i.e. A.Y. 2010-11, the department has accepted the rent received from the husband as taxable under the head income from house property. Such an acceptance by the department has been made in the order passed under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... siness or profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall be taken to be nil. Section 23 only provides the computation of annual value under certain deeming conditions as the operating part of section 23(1) reads as under: For the purposes of section 22, the annual value of any property shall be deemed to be .......... From the plain reading of Subsection (2) it is evident that the annual value of a property which is a self occupied, then annual value cannot be deemed and shall be taken at Nil. This deeming value at Nil is to be claimed by the assessee. However, if the assessee has let out the self occup ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is brought on record to controvert the transaction. Further as brought on record by the learned counsel, the department itself in the subsequent year has accepted the rent received from husband as chargeable to tax under the head income from house property. Thus, on the facts of the case, the assessee s income from letting out the property is to be taxed under the head income from house property . Accordingly, the ground raised by the assessee is allowed. 8. In Ground no. 4, the assessee has challenged the disallowance made u/s 14A read with Rule 8D. The assessee has earned dividend income of ₹ 13,18,704/- which was claimed as exempt. In the computation of income, the assessee has not offered any disallowance u/s 14A. Accordingly ..... X X X X Extracts X X X X X X X X Extracts X X X X
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