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TMI Blog2016 (10) TMI 532X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordingly, we uphold the same. Resultantly, this ground raised by the assessee stands dismissed. Estimation of income from the guest house - Held that:- CIT(A) has passed a detailed order thereby observed that the assessing officer has resorted to the estimation of income from the guest house as the assessee could not provide any evidence such as account books, registers etc or photograph of the guest house. The CIT(A) has rightly held that in the absence of this the AO should have carried out certain local enquiries before arriving at the amount of addition. Therefore after discussing the entire case, the CIT(A) has rightly come to the conclusion by taking occupancy rate at 50% per annum and charges per day per person per room by taking @ ₹ 150 per day and has worked out the amount in question which comes to ₹ 1,57,500 (150 x 6x 175) as detailed above. No new circumstance has been brought on record before us by the learned DR in order to controvert or rebut the findings recorded by the learned CIT (A) on the basis of the remand report. Moreover, there is no reason for us to deviate from the findings recorded by the learned CIT (A). Therefore, we are of the consider ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . (d) The appellant prays that, the addition of ₹ 1,57,500/- be deleted. Without prejudice, the estimate of income being on higher side it be reduced. 3. (a) On the facts and in the circumstances of the case, the learned CIT(A) erred in making addition uls.l4A of Rs.l,56,763/- and CIT(A) erred in confirming the same, which addition be deleted. (b) The learned assessing officer, failed to appreciate that, the provisions of section 14A are not attracted and the addition made be deleted. The appellant prays that, the addition of Rs.l,56,763/- be deleted. Without prejudice, the addition be reduced. 2. The brief facts of the case are that the return of income declaring total income at ₹ 8,49,990/- was filed on 24.02.2010. The return was processed u/s 143(1) of the Act and later on the case was selected for scrutiny under CASS. After serving statutory notices and seeking reply from the assessee, an order of assessment thereby estimating rateable value of flat at Lonavala at ₹ 36,000/- and also estimated income from guest house at Jamnagar has passed. In addition, the AO in the assessment order has also held that since the assessee has raised loan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7; 3,050/- p.a. Considering the municipal taxes paid at 1j3rd of the total rental income earned during the year the rent that would have been received works out to ₹ 9,150/- and submitted that the Assessing Officer had taken unreasonably high value while estimating the property income. It is seen from the facts on record that the assessee relied only on the municipal taxes paid as basis for estimation of rental income. This .cannot be a measure to estimate ALV of the property, since, for the purpose of valuation of the property tax the assessee ought to have given the monthly/annual rental income from the said property. It is not on record what has been submitted by the assessee to the municipal authorities for property tax valuation. In the absence of this factual information, besides as the assessee is also not keen to produce any other supporting documents, it is held that the ALV estimated by the Assessing Officer cannot be disturbed and, therefore, the same is confirmed. The ground of appeal of the assessee is dismissed. 6.1 After hearing ld. DR present in the court and after perusal of documents as as well as orders passed by lower authorities we found that CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on record but decided the issue on surmises and imagination. In addition to this, the assessee also submitted the electricity bills paid by the assessee in respect of the above mentioned guest house in support of his claim that the occupancy rate of the guest house during the relevant period was not to the extent of 275 days as mentioned by the Assessing Officer. I have considered the facts of the case and details submitted by the assessee and found that neither the Assessing Officer nor the assessee could conclusively prove the stand taken by them. The Assessing Officer has resorted to the estimation of income from the guest house as the assessee could not provide any evidence or photograph of the guest house. In the absence of this the Assessing Officer should have carried out certain local enquiries before arriving at the amount of addition. Similarly, the assessee has not produced any books of accounts which include client/customer register in support of his submissions which would have given the details of the occupancy rate and also amount charged per person per day. In the absence of the complete details based on the facts available on record, such as the guest house situate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .e. the share of profit from the firm which is exempt u/s 10(2A) of the Income Tax Act has been taken into consideration for invoking provisions u/s 14A. The assessee during the year received salary of ₹ 3,62,000/- and profit of ₹ 9,19,303/- from the firm. The assessee claimed interest of ₹ 2,18,485/- as deduction in the computation. The Assessing Officer has calculated the disallowable expenses on account of interest at ₹ 1,56,763/- relatable to earning of exempt income. During the appellate proceedings the assessee submitted that the share of profit from partnership firm should not be considered for the purposes of see. 14A, as the firm is paying tax on total income and as such the profit received by the partner cannot be taxed, as it amounts to double taxation. I have considered the facts of the case and also the submissions made by the assessee. It is seen from the assessment order that the assessee has raised loans and advanced the same to the partnership firm. As far as this fact is concerned neither the Assessing Officer nor the assessee is in dispute (it is not mentioned that the quantum of amount given to the firm by the assessee). The assessee on t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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