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TMI Blog2013 (10) TMI 1383X X X X Extracts X X X X X X X X Extracts X X X X ..... see is dismissed. Dis allowance of expenses incurred wholly and exclusively for earning taxable income - Held that:- 70% of the expenditure was disallowed by the AO which appeared to be towards higher side in a situation when one estimate is to be pitted against another estimate; than it is reasonable to adopt a fair estimate. Considering the nature of the business of a tax payer, we therefore direct that 50% of the expenditure is to be allowed and, therefore, the balance 50% shall be disallowed. In this manner, the assessee shall get part relief in respect of disallowance made by the AO. - ITA No. 558/Ahd/2013 - - - Dated:- 11-10-2013 - SHRI MUKUL Kr. SHRAWAT, JUDICIAL MEMBER AND SHRI T. R. MEENA, ACCOUNTANT MEMBER O R D E R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 22 the annual value of any property shall be deemed to such some for which the property might reasonably be expected to let from year to year. Hence, a show cause notice was issued asking the assessee as to why no notional income of the house property was shown by the assessee. In compliance of the show cause notice, the assessee has submitted his explanation as under: I am partner in five partnership firms and we have employed many employees. Out of them few employees are commuting to Surat from other cities of South Gujarat such as Bharuch, Navsari, Billimora etc. May times due to work load pressure or to complete time bound formalities, they are required to perform their duties till late night. In such circumstances when it is not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s 24(a), the Annual Letting Value of the flat which comes to ₹ 42,000/- is added to the total income of the assessee as deemed income from House Property. 4. When the matter was carried before the First Appellate Authority, the assessee has placed reliance on CIT V/s. Rasiklal Balabhai, 119 ITR 303 (Guj). But learned CIT(A) has held that in the case of Prodip Kumar Bothra, 244 CTR 366 (Cal), it was held that the house property income is not taxable only if the property is used for one s own business and not exempt if used for the business of the Firm in which the assessee is a partner. It was concluded by learned CIT(A) that the assessee had not established that the property was used by the staff member, therefore, action of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Act. At this juncture, it is worth to mention that a litigant, especially the learned counsel, who is an expert, is expected to place before the Court all the decisions either in favour or against him. We are constrained to note that this fair approach was not adopted in this case. On the other hand, a decision of Hon ble Calcutta High Court has been cited by learned CIT(A) in the case of Prodip Kumar Bothra (supra), wherein it was held that the exemption in respect of house property cannot be allowed to assessee if the property is used by the partnership firm because in the opinion of the Hon ble High Court the owner of the house property and the occupier of the property must be the same person. The Court has held that having regard to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of CIT V/s. Mustafa Khan, 276 ITR 602, wherein it was held as under: The income from hose property owned by an assessee and used in business carried on by the firm in which the assessee is a partner would qualify for exemption as provided in Section 22 of the Income Tax Act, 1961. There is no relationship of master and servant between a partner who carries on the firm s business and the firm. The firm is not the employer of the partners and similarly the partners are not employees of the firm. The partners are the co-owners in the firm s property. Occupation in terms of section 22 will also include occupation by the owner along with the other persons. Hence a partner owning house property used by the firm for business purposes, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Revenue Authorities is hereby affirmed and this ground of the assessee is dismissed. 7. Ground No.2 is reproduced below: That on facts and in law, the learned CIT(A) has grievously erred in confirming the disallowance of ₹ 1,98,435/- out of expenses incurred wholly and exclusively for earning taxable income. 8. The assessee has claimed commission expenditure of ₹ 2,83,479/- The nature of income of the assessee is financial advisor in the field of mutual fund . The assessee has earned commission income in respect of investments made by the parties. The assessee has also claimed salary to two employees and the AO has inquired the nature of work from those employees. The AO has concluded that most of the expenditure w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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