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TMI Blog2018 (5) TMI 1320X X X X Extracts X X X X X X X X Extracts X X X X ..... essee the ALV can not be assessed by applying 8% on the investment value but has to be assessed on the basis of Annual Rateable Value by MC. Considering all we restore the issue to the file of AO to decide that ALV on the basis of Annual Rateable Value by MC. The ground is allowed for statistical purposes. Disallowance u/s 14A - apportionment of expenditure - Held that:- In this case, the AO has made disallowance by applying the provision of rule 8D(iii) towards administration expenses which is not correct and has to be deleted as assessee has not incurred any expenses. The case of the assessee is squarely covered by the decision of the co-ordinate bench of the Tribunal in the case of Justice Sam P. Bharucha vs. ACIT (2012 (12) TMI 409 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot have been done so as the conditions for. 3. The learned Commissioner of Income tax (Appeals) further erred in facts and in law by stating that rectification order was passed for rectifying the error for computing the tax on short term capital gains @ 30% in place of 15% where no such rectification was made, which could have been considered to direct the assessing officer to do so. 4. The appellant craves to add, alter, amplify, modify and vary the grounds of appeal. 3. We would like to mention at the outset that the Ld. Counsel of the assessee did not press ground No.3 during the course of hearing and accordingly the same is dismissed as not pressed. 4. The issue raised in ground No.1 is against the confirmation of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der the head income from house property. 6. In the appellate proceedings, the Ld. CIT(A) also dismissed the appeal of the assessee by observing and holding as under: 4.4 I have considered the submission of the appellant carefully. It is noted that the appellant and the companies listed as user of the properties are different legal entities. The properties in question are owned by the Appellant. The same has not been transferred to the companies in lieu of share capital. The transaction between the share holders and the company is between two different legal entities. The business of the Companies in which the appellant is shareholder promoters is not the business of the appellant. I therefore find no merit in the contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in absence of any rent receipts, the municipal value has to be treated as annual value of those properties. In defense of his argument, the Ld. A.R. relied on the decision of co-ordinate bench of the Tribunal in the case of Veena D. Munganahalli vs. ITO in ITA No.2516/M/2012 for A.Y. 2009-10 and another decision in the case of Deepak Sanghvi vs. ITO in ITA No.6215/M/2013 for A.Y. 2009-10 wherein it has been held that ALV of the property should be determined as per municipal valuation where there is no rent receipt. The Ld. A.R. submitted that this ratio is squarely applicable to the case of the assessee as in this case also the assessee is carrying on the business through his companies and the premises were not let out. 9. The Ld. D.R., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... business through these entities. In the decision of the Hon ble Madras High Court in the case of CIT vs. K.M. Jagannathan (supra) in which it has been held that where business is carried on by the firm should be regarded as being carried on by all the partners and no property income should be computed in respect of portion of the property occupied by the firm of which assessee is a partner whereas in the present case the business is carried on by the private companies and therefore distinguishable. However, alternative contention of the assessee has merit that in absence of any rent receipt by the assessee the ALV can not be assessed by applying 8% on the investment value but has to be assessed on the basis of Annual Rateable Value by MC. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... also affirmed by the first appellate authority by observing that a significant amount of income was earned by the assessee during the year which is exempt and the AO is justified in applying the rule 8D(2)(iii) to make the disallowance and accordingly upheld the addition of ₹ 1,58,123/-. 13. After hearing the rival submissions of the parties and perusing the material on record, we find that the assessee has earned exempt income by way of long term capital gain on sale of shares, profit from partnership concern, interest on PPF and dividend aggregating to ₹ 72,72,849/-. However, after perusal of statement of total income which was filed during the course of hearing, we observe that the assessee has not incurred and claimed any ..... X X X X Extracts X X X X X X X X Extracts X X X X
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