V.Anantha kumar , Bangalore V. The additional Commissioner of Income Tax Range-2(2), Bangalore

ITA 325/BANG/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7456 (ITAT-BANGALORE)
• Duration Of Justice: 7 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 13-10-2017
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2013-2014
• Appeal Filed On: 14-02-2017
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: L V BHASKARA REDDY
• Assessee Lawyers: C RAMESH
• Keywords: Earning of tax free income
• Section: 14A

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL B BENCH : BANGALORE BEFORE SHRI N.V. VASUDEVAN, JUDICIAL MEMBER AND SHRI JASON P BOAZ, ACCOUNTANT MEMBER ITA NO. 325 & 326 /BANG/201 7 ASSESSMENT YEAR S : 2012 - 13 & 20 1 3 - 1 4 SHRI V. ANANTHA KUMAR, D-1001, MANTRI GREENS, NO. 1, SAMPIGE ROAD, MALLESHWARAM, BANGALORE 560 003. PAN: AFSPK 9224K VS. THE ADDITIONAL COMMISSIONER OF INCOME TAX, RANGE 2(2), BANGALORE. APPELLANT RESPONDENT ASSESSEE BY : SHRI C. RAMESH, CA REVENUE BY : SHRI L.V. BHASKARA REDDY, ADDL. CIT (DR) DATE OF HEARING : 0 6 . 10 .201 7 DATE OF PRONOUNCEMENT : 13 .10 .2017 O R D E R PER BENCH ITA NO. 326/BANG/2017 IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 13.12.2016 OF CIT(A), BANGALORE II, BANGALORE REL ATED TO ASSESSMENT YEAR 2012-13. ITA NO. 325/BANG/2017 IS ALSO AN APPEAL B Y THE ASSESSEE AGAINST ANOTHER ORDER DATED 13.12.2016 OF CIT(A), BANGALORE II, B ANGALORE RELATED TO ASSESSMENT YEAR 2013-14. 2. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THESE A PPEALS, THEY WERE HEARD TOGETHER. WE DEEM IT CONVENIENT TO PASS A COMMON O RDER. ITA NO. 326/BANG/2017(ASSESSMENT YEAR 2012-13):- 3. THE GROUND NO. 1 RAISED BY THE ASSESSEE IS GENER AL IN NATURE AND DOES NOT CALL FOR ANY SPECIFIC ADJUDICATION. IN GROUND NOS. 2 TO 8, THE ASSESSEE HAS PROJECTED ITA NOS. 325 & 326/BANG/2017 PAGE 2 OF 9 HIS GRIEVANCE AGAINST THE ACTION OF THE REVENUE AUT HORITIES IN MAKING A DISALLOWANCE OF RS. 14,57,886/- BY INVOKING THE PROVISIONS OF SE CTION 14A OF THE INCOME TAX ACT, 1961 (ACT). THE ASSESSEE IS AN INDIVIDUAL. HE IS A PROPRIETOR OF M/S. BILIGIRI GRANITES, B.R. HILLS ROAD, CHAMARAJANAGAR. THE ASSESSEE CARR IES ON THE BUSINESS OF EXTRACTION, PROCESSING AND EXPORT OF GRANITE MONUME NTS. THE ASSESSEE WAS ALSO A PARTNER IN A PARTNERSHIP FIRM M/S. KUM INTERNATIONA L. DURING THE PREVIOUS YEAR THE ASSESSEE EARNED SHARE OF PROFIT FROM THE PARTNERSHI P FIRM M/S. KUM INTERNATIONAL OF RS. 40,75,517/-. THIS INCOME WAS EXEMPT FROM TAX U /S. 10(2A) OF THE ACT. IN VIEW OF THE PROVISIONS OF SECTION 14A OF THE ACT, THE AO WA NTED TO DISALLOW EXPENSES WHICH WERE INCURRED IN EARNING INCOME WHICH WAS NOT CHARG EABLE TO TAX, IN THE COMPUTATION OF TOTAL INCOME. THE ASSESSEE HAD FOLLOWING INVEST MENTS IN ITS BALANCE SHEET. 1. M/S. BILIGIRI GRANITES (P) LTD. (SHARES) RS. 1 7,90,000/- 2. M/S. KUM INTERNATIONALS (FIRM) RS. 51,02,232/- 3. MUTUAL FUND- RS. 10,00,000/- 4. THE AO CALLED UPON THE ASSESSEE TO EXPLAIN AS TO WHY THE ASSESSEE HAS NOT OFFERED ANY DISALLOWANCE OF EXPENSES IN TERMS OF SE CTION 14A OF THE ACT. THE ASSESSEE EXPLAINED BEFORE THE AO THAT THE INVESTMEN TS WHICH ARE LIKELY TO EARN TAX FREE INCOME WERE MADE BY THE ASSESSEE OUT OF HIS OW N FUNDS AND THEREFORE THERE WAS NO INTEREST EXPENDITURE WHICH CAN BE ATTRIBUTED TO EARNING OF EXEMPT INCOME. THE ASSESSEE TOOK A STAND THAT THE ASSESSEE HAD SUF FICIENT CAPITAL OF RS. 11,65,74,134/- AS ON 31.03.2012 WHICH WAS FAR IN EX CESS OF THE INVESTMENTS. IN THE PROFIT & LOSS ACCOUNT OF THE ASSESSEE THERE WAS DEB IT OF INTEREST EXPENDITURE TO THE TUNE OF RS. 66,54,457/-. (NOTE 19 TO THE P & L ACC OUNT GIVES THE BREAK-UP OF FINANCIAL CHARGES DEBITED IN P & L ACCOUNT AND RS.6 6,54,457 OUT OF FINANCE CHARGES DEBITED TO THE PROFIT AND LOSS ACCOUNT IS INTEREST EXPENSES). THE DETAILS OF SECURED LOANS IN RESPECT OF WHICH THE AFORESAID INTEREST EX PENSES WAS INCURRED BY THE ASSESSEE IS GIVEN IN SCHEDULE II TO THE BALANCE SHE ET AND P & L ACCOUNT AS ON 31.03.2012 AND THE SAME IS AS FOLLOWS. 2. SECURED LOANS M/S. CHOLAMANDALAM FINANCE BOLERO 157,905 M/S. CHOLAMANDALAM FINANCE 6,339,170 M/S. CHOLAMANDALAM FINANCE-HUNDAI I 10 79,693 M/S. CHOLAMANDALAM FINANCE-KHIVRAJ TRAILOR 1,758,55 7 ITA NOS. 325 & 326/BANG/2017 PAGE 3 OF 9 M/S. CHOLAMANDALAM FINANCE-NEW TIPPER 625,502 M/S. CHOLAMANDALAM FINANCE-TATA 407 66,421 M/S. CHOLAMANDALAM FINANCE-TATA 207 66,421 M/S. CHOLAMANDALAM FINANCE-TATA 407-NEW 418,669 M/S. CHOLAMANDALAM FINANCE-LPS-4923 901,500 M/S. CHOLAMANDALAM FINANCE-TAYOTA FORTUNER 1,568,17 9 HDFC BANK-GODREJ FORKLIFT 450,888 HDFC BANK-KHIVRAJ TRAILOR 1,841,757 HDFC BANK-EXCAVATOR 4,303,319 HDFC BANK-L G COMPRESSOR 485,507 TATA CAPITAL-EXCAVATOR 4,379,836 UTI BANK 1,157,425 SBM-FCRNB A/C 90490 6,260,532 SBM-64081506935 3,841,853 SBM-64087882279-LOAN 4,545,691 SBM-ADHOC LIMIT-64095319009 9,966,901 SBM-FCNRB-DL 64078705313 6,087,624 SBM LOAN-INR-64090150623 2,419,474 SBM-LC A/C 09234 2,025,928 SBM PRESHIPMENT CREDIT 30,286,213 ---------------------- 90,034,965 ---------------------- 5. THE ASSESSEE ALSO CLAIMED THAT NO OTHER EXPENSES WERE INCURRED TO EARN TAX FREE INCOME AND THEREFORE NO DISALLOWANCE CAN BE MADE U/ S. 14A OF THE ACT. 6. THE AO HOWEVER WAS OF THE VIEW THAT DISALLOWANC E OF INTEREST AND OTHER EXPENSES HAS TO BE MADE IN TERMS OF RULE 8D(2)(II) AND (III) OF THE IT RULES, 1962(RULES). THE AO PROCEEDED TO COMPUTE THE DISAL LOWANCE U/S. 14A OF THE ACT, AS FOLLOWS. A TOTAL AMOUNT OF DIRECT INTEREST / OTHER EXPENSES PE RTAINING TO TAX - EXEMPT INVESTMENTS - B TOTAL AMOUNT OF INDIRECT INTEREST PERTAINING TO TAX -EXEMPT INVESTMENTS RS. 66,54,457 A.Y. 2011 - 12 A.Y. 2012 - 13 AVERAGE C AVERAGE AMOUNT OF TAX EXEMPT INVESTMENTS 7,51,87,232 79,67,232 4,15,77,232 D AVERAGE AMOUNT OF TOTAL ASSETS 20,62,15,264 23,61,96,632 22,12,15,948 E PROPORTIONATE INDIRECT INTEREST TO BE DISALLOWED B X C D 66,50, 457 X 4 ,15,77,232 22,12,15,948 =RS. 12,50,000 F 0.5% OF AVERAGE AMOUNT OF TAX EXEMPT INVESTMENTS RS. 2,07,886 ITA NOS. 325 & 326/BANG/2017 PAGE 4 OF 9 G TOTAL DISALLOWANCE ATTRACTED U/S 14A READ WITH RULE 8D A + E + F RS. 14,57,886 THE ABOVE AMOUNT OF RS. 14,57,886 WAS DISALLOWED U/ S. 14A READ WITH RULE 8D OF THE INCOME TAX ACT. 7. AGGRIEVED BY THE DISALLOWANCE OF EXPENSES U/S.14 A OF THE ACT, THE ASSESSEE FILED APPEAL BEFORE THE CIT(A). THE CIT(A) WAS OF THE VI EW THAT THE DISALLOWANCE MADE BY THE AO U/S. 14A OF THE ACT WAS FULLY JUSTIFIED A ND UPHELD THE ADDITION MADE BY THE AO. AGGRIEVED BY THE ORDER OF CIT(A) THE ASSESSEE HAS RAISED GROUNDS 2 TO 8 BEFORE THE TRIBUNAL. 8. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUNSE L OF THE ASSESSEE AND THE LD. DR. THE LD. COUNSEL FOR THE ASSESSEE DREW OUR ATTE NTION TO THE BALANCE SHEET OF THE ASSESSEE AS ON 31.03.2012 AND POINTED OUT THAT THE OPENING CAPITAL OF THE ASSESSEE WAS A SUM OF RS. 10,58,96,879/- AND THE CLOSING CAP ITAL AS ON 31.3.2013 WAS RS. 11,65,74,134/-. HE SUBMITTED THAT OWN FUNDS WERE M ORE THAN THE INVESTMENTS MADE BY THE ASSESSEE AS FOUND IN THE BALANCE SHEET. THE BENCH RAISED A QUERY AS TO THE YEAR IN WHICH THE INVESTMENTS IN QUESTION WERE MADE . THE LD. COUNSEL SUBMITTED THAT THE INVESTMENTS HAD BEEN MADE THREE YEARS PRIO R TO THE FINANCIAL YEAR 2011-12. THE BENCH RAISED A QUERY AS TO WHETHER THE OWN FUND S WERE SUFFICIENT THE YEAR IN WHICH INVESTMENTS WERE MADE. THE LD. COUNSEL SUBMI TTED THAT THE REQUIRED DETAILS WERE NOT AVAILABLE AND THEREFORE THE ISSUE CAN BE R EMANDED TO THE AO FOR FRESH CONSIDERATION TO ENABLE THE ASSESSEE TO SUBSTANTIAT E AVAILABILITY OF OWN FUNDS WHEN THE INVESTMENTS IN QUESTION HAD BEEN MADE. THE LD. DR DID NOT RAISE ANY SPECIFIC OBJECTION. WE THEREFORE DEEM IT PROPER TO SET ASID E THE ORDER OF CIT(A) ON THIS ISSUE AND REMAND FOR CONSIDERATION BY THE AO THE QUESTION OF DISALLOWANCE OF INTEREST EXPENSES UNDER RULE 8D(2)(II). 9. THE LD. COUNSEL FOR THE ASSESSEE ALSO MADE A SU BMISSION THAT THE SECURED LOANS ON WHICH THE INTEREST EXPENSES WAS INCURRED BY THE ASSESSEE WERE TAKEN FOR SPECIFIC PURPOSE OF THE BUSINESS AND HAD BEEN USED FOR THE P URPOSE OF BUSINESS AND THEREFORE NO INTEREST EXPENSES CAN BE DISALLOWED U/ S. 14A OF THE ACT. THE LD. DR HOWEVER POINTED OUT THAT THE ASSESSEE ON HIS OWN IN ONE OF THE SUBMISSIONS MADE BEFORE THE AO SUBMITTED THAT A LOAN AVAILED FROM ST ATE BANK OF MYSORE UNDER A/C. ITA NOS. 325 & 326/BANG/2017 PAGE 5 OF 9 NO. 64081506935 AND PRESHIPMENT CREDIT AVAILED FROM STATE BANK OF MYSORE HAD BEEN DIVERTED FOR MAKING INVESTMENT. THE LD. COUNS EL FOR THE ASSESSEE SUBMITTED THAT PROPER PRESENTATION OF FACTS HAD NOT BEEN MADE BEFORE THE AUTHORITIES AND HE SHOULD BE AFFORDED AN OPPORTUNITY TO EXPLAIN BEFORE THE AO THAT THE LOANS ON WHICH INTEREST EXPENSES WERE INCURRED BY THE ASSESSEE WER E IN FACT USED FOR THE PURPOSE OF BUSINESS AND NOT FOR MAKING INVESTMENTS AND FOR THIS PURPOSE ORDER OF CIT(A) SHOULD BE SET ASIDE AND THE ISSUE REMANDED TO THE A O FOR FRESH CONSIDERATION. WE ACCEPT THE REQUEST OF THE LD. COUNSEL OF THE ASSESS EE AND REMAND FOR CONSIDERATION BY THE AO THE QUESTION OF DISALLOWANCE OF INTEREST UNDER RULE 8D(2)(II) OF THE RULES. 10. AS FAR AS DISALLOWANCE OF EXPENSES UNDER RULE 8D(2)(III) IS CONCERNED, AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE OF THE VIE W THAT CONSIDERING THE QUANTUM OF TAX FREE INCOME EARNED BY THE ASSESSEE AND THE EXPE NDITURE DEBITED IN THE P & L ACCOUNT THE DISALLOWANCE MADE BY THE REVENUE AUTHOR ITIES IS REASONABLE AND DOES NOT CALL FOR ANY INTERFERENCE. ACCORDINGLY GROUND NOS. 2 TO 8 RAISED BY THE ASSESSEE ARE TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPO SES. 11. IN GROUND NO. 9 THE ASSESSEE HAS CHALLENGED THE DETERMINATION OF INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY BY THE AO. THE ASSESSEE IS OWNER OF FLAT NO.1001, MANTRI GREENS, SAMPIGE ROAD, MALLESWARAM, ANGALORE-56003. THE FLAT IS USED FOR THE BUSINESS ACTIVITY OF THE APPELLANT. TH E ASSESSEE IS PROPRIETOR OF M/S. BILIGIRI GRANITES. THE ASSESSEE WAS ALSO A PARTNER IN A FIRM M/S.KUM INTERNATIONAL WHICH IS IN THE BUSINESS OF EXPORT OF GRANITE SLABS AND MONUMENTS. THE SAID FIRM WAS USING THE PREMISES AS ITS OFFICE. A RENT OF RS.8,00 0/- P.M. WAS RECEIVED FROM M/S.KUM INTERNATIONAL AND SUCH ACTUAL RENT RECEIVED WAS CONSIDERED FOR COMPUTATION OF INCOME UNDER THE HEAD HOUSE PROPERTY. ACCORDING LY THE FOLLOWING COMPUTATION WAS MADE UNDER THE HEAD HOUSE PROPERTY. RENT RECEIVED FROM MANTRI APARTMENTS 96,000 LESS: 30% OF ANNUAL LETTING VALUE 28,800 INTEREST ON LOAN 1,63,372 PRE-CONSTRUCTION PERIOD LOAN RS.6,18,206/- 3RD YEAR 1,23,641 ----------------- 3,15,813 -------------- ITA NOS. 325 & 326/BANG/2017 PAGE 6 OF 9 (-) 2,19,813 --------------- 12. THE ASSESSING OFFICER WAS OF THE VIEW THAT U/S .23 OF THE ACT, ANNUAL VALUE FOR THE PURPOSE OF COMPUTING INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY HAS TO BE RECOMPUTED BY TAKING THE HIGHER OF THE ACTUAL RE NT RECEIVED OR THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO BE LET . THE AO WAS OF THE VIEW THAT THE FLAT IN QUESTION WAS LET OUT TO A FIRM IN WHICH THE ASSESSEE IS A PARTNER AND THEREFORE ACTUAL RENT RECEIVED MAY NOT BE APPROPRIATE YARDSTI CK. THE AO WAS OF THE VIEW THAT EVEN BY ANY CONSERVATIVE ESTIMATE, CONSIDERING THE LOCATION AND OTHER FEATURES OF THE FLAT, IT SHOULD FETCH A RENT OF ATLEAST RS. 30, 000 /- P.M. THE AO ACCORDINGLY ADOPTED THE ALV OF THE PROPERTY AT RS. 3, 60, 000/- AND COM PUTED INCOME FROM HOUSE PROPERTY AS FOLLOWS: ALV OF THE PROPERTY 3,60,000 LESS: 30% OF ANNUAL LETTING VALUE 1,08,000 INTEREST ON LOAN 1,63,372 PRE-CONSTRUCTION PERIOD LOAN RS. 6,18,205/- 3 RD YR 1,23,641 ------------- 3,95,013 ----------------- LOSS FROM THIS SOURCE (-) 35,013 ------------------ ACCORDINGLY THE ASSESSING OFFICER HAS ASSESSED THE LOSS FROM HOUSE PROPERTY AT RS. 35,013/- AS AGAINST THE LOSS CLAIMED BY THE ASSESSE E OF RS.2,19,813/-. THUS THERE WAS DISALLOWANCE OF LOSS OF RS.1,84,800/-. 13. ON APPEAL BY THE ASSESSEE, THE CIT(A) CONFIRME D THE ADDITION WITH THE FOLLOWING FINDING IN PARA 4.3 OF THE ORDER, WHICH IS REPRODUC ED HERE UNDER: - 4.3 AFTER CONSIDERING THE FACTS OF THE CASE, IT IS SEEN THAT THE RENT DECLARED BY THE APPELLANT IS INDEED LOW. THE A O HAS WORKED OUT THE ALV AT A REASONABLE RS.3, 60, 000/- UNDER FACTS OF THE CASE WHICH IS IN ACCORDANCE WITH LAW. THE AC TION OF THE AO IS UPHELD.' 14. BEFORE US, THE LEARNED COUNSEL FOR THE ASSESSE E SUBMITTED THE ASSESSING OFFICER HAS ESTIMATED THE RENT OF THE FLAT AT RS. 30,000/- P.M. AS AGAINST RENT OF RS.8,000/- ITA NOS. 325 & 326/BANG/2017 PAGE 7 OF 9 P.M. DECLARED AND THEREBY DETERMINED AN ANNUAL VALU E OF RS.3,60,000/- WITHOUT ANY BASIS. WHILE CONCLUDING THE ASSESSMENT THE ASSESSIN G OFFICER HAS JUST STATED THAT, EVEN BY A CONSERVATIVE ESTIMATE THE FLAT SHOULD FET CH A RENT OF ATLEAST RS.30,000/- P.M. HOWEVER, FOR THIS ESTIMATE THERE IS NO BASIS. IT WAS SUBMITTED BY HHIM THAT, THE SIZE OF THE FLAT WAS IN THE RANGE OF 13 SQS. THE E STIMATION OF THE ASSESSING OFFICER IS UNREASONABLY HIGH AND HAS NO BASIS. IT WAS FURTHER SUBMITTED THAT MUNICIPAL AUTHORITIES HAVE DETERMINED MUNICIPAL TAXES AT RS.9 ,163/- PER ANNUM. THEREFORE RENT RECEIVED BY THE ASSESSEE WAS HIGHER AND THAT SHOULD BE THE BASIS OF DETERMINATION OF ALV. 15. THE LEARNED COUNSEL FOR THE ASSESSEE DREW OUT ATTENTION TO THE PROVISIONS OF SEC.23 OF THE ACT WHICH DEFINES ANNUAL VALUE OF PRO PERTY FOR THE PURPOSE OF DETERMINATION OF INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY, AS UNDER: - '23. (1) FOR THE PURPOSES OF SECTION 22, THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR; OR (B) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LET AND THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS IN EXCESS OF THE SUM REFERRED TO IN CLAU SE (A), THE AMOUNT SO RECEIVED OR RECEIVABLE; OR (C). ' 16. HE ALSO DREW OUR ATTENTION TO THE PROVISIONS O F SECTION 22 OF THE ACT WHICH READS AS UNDER: - 'THE ANNUAL VALUE OF PROPERTY CONSISTING OF ANY BUI LDINGS OR LANDS APPURTENANT THERETO OF WHICH THE ASSESSEE IS THE OWNER, OTHER THAN SUCH PORTIONS OF SUCH PROPERTY AS HE MAY OCCUPY FOR THE PURPOSES OF ANY BUSINESS OR PROFESSION CARRIED ON BY HIM THE PROFITS OF WHICH ARE CHARGEABLE TO INCOME TAX, SHALL BE CHARGEABLE TO INCOME TAX UNDER THE HEAD 'INCOME FRO M HOUSE PROPERTY. 17. IT WAS HIS SUBMISSION THAT SINCE THE PROPERTY WAS OCCUPIED BY THE OWNER FOR THE PURPOSE OF HIS OWN BUSINESS, NO INCOME IS CHARGEABL E UNDER THE HEAD INCOME FROM HOUSE PROPERTY. IT WAS HIS SUBMISSION THAT IN THE PRESENT CASE, THE FLAT IN QUESTION ITA NOS. 325 & 326/BANG/2017 PAGE 8 OF 9 WAS OCCUPIED BY THE ASSESSEE FOR THE PURPOSE OF HIS OWN PROPRIETORY BUSINESS M/S.BILIGIRI GRANITES. THEREFORE AS PER THE PROVIS IONS OF THE ACT THERE IS NO INCOME CHARGEABLE TO TAX. HOWEVER, SINCE THE PREMISES WAS BEING USED FOR THE BUSINESS OF THE PARTNERSHIP FIRM M/S.KUM INTERNATIONAL ALSO, A RENT OF RS.8,000/- P.M. WAS COLLECTED AND SUCH RENT OFFERED FOR TAX. 18. WE HAVE HEARD THE SUBMISSIONS OF THE LD. COUNS EL OF THE ASSESSEE AND ARE OF THE VIEW THAT THE ORDER OF CIT(A) ON THIS ISSUE DOE S NOT CALL FOR ANY INTERFERENCE. UNDER THESE PROVISIONS OF SECTION 23(1)(A)(B) THE H IRE OF THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO BE LET FRO M YEAR TO YEAR OR ACTUAL RENT RECEIVED IS THE BASIS OF DETERMINATION OF ANNUAL VA LUE. IN THE PRESENT CASE IT CANNOT BE DISPUTED THAT THE SUM FOR WHICH THE PROPERTY MIG HT REASONABLY BE EXPECTED TO BE LET FROM YEAR TO YEAR WAS HIGHER THOUGH SUCH VALUE WAS BASED ON AN ESTIMATE BY THE AO WHICH IN OUR VIEW WAS REASONABLE. THE ASSESSEE HAS CLAIMED THAT THE PREMISES WAS ALSO OCCUPIED BY THE ASSESSEE FOR HIS OWN BUSIN ESS. NO DETAILS WHATSOEVER WERE FURNISHED IN THIS REGARD BY THE ASSESSEE AS TO WHAT WAS THE AREA LET OUT AND WHAT WAS OCCUPIED BY THE LESSEE. IN THESE CIRCUMST ANCES WE ARE OF THE VIEW THAT THE CIT(A) WAS JUSTIFIED IN UPHOLDING THE INCOME COMPUT ED BY THE AO UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THIS FINDING IS CONFIN ED TO THE PRESENT AY ONLY AND THE ASSESSEE IS AT LIBERTY TO SHOW CORRECT FACTS AND SE EK APPROPRIATE RELIEF IN ANY OTHER ASSESSMENT YEARS. THE ORDER OF CIT(A) ON THIS ISSU E DOES NOT CALL FOR ANY INTERFERENCE IN THE PRESENT AY. GROUND NO. 9 RAISE D BY THE ASSESSEE IS ACCORDINGLY DISMISSED. 19. IN THE RESULT, THE APPEAL IN ITA NO. 326/BANG/2 017 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. ITA NO. 325/BANG/2017(ASSESSMENT YEAR 2013-14):- 20. THE ISSUES RAISED IN THIS APPEAL ARE IDENTICAL TO THE ISSUES RAISED IN ASSESSMENT YEAR 2012-13. THE PARTIES AGREED THAT THE FACTS AN D CIRCUMSTANCES IN ASSESSMENT YEAR 2013-14 ARE IDENTICAL TO THE FACTS AND CIRCUMS TANCES AS PROVIDED IN ASSESSMENT YEAR 2012-13 AND THEREFORE THE DECISION RENDERED IN ASSESSMENT YEAR 2012-13 WILL EQUALLY APPLY TO ASSESSMENT YEAR 2013- 14 ALSO. WE THEREFORE HOLD THAT ITA NOS. 325 & 326/BANG/2017 PAGE 9 OF 9 THE DISALLOWANCE U/S. 14A OF THE ACT R.W.R. 8D(2)(I I) OF THE RULES BE RECONSIDERED BY THE AO AFRESH AS PER THE DIRECTIONS GIVEN IN ASSESS MENT YEAR 2013-14. WE ALSO CONFIRM THE ORDER OF CIT(A) IN SO FAR AS IT RELATES TO DETERMINATION OF INCOME UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 21. IN THE RESULT, THE APPEAL IN ITA NO. 325/BANG/2 017 IS PARTLY ALLOWED FOR STATISTICAL PURPOSES. PRONOUNCED IN THE OPEN COURT ON THIS 13 TH DAY OF OCTOBER, 2017. SD/- SD/- (JASON P BOAZ) (N.V. VASUDEVAN) ACCOUNTANT MEMBER JUDICIAL MEMBER BANGALORE, DATED, THE 13 TH OCTOBER, 2017. /MS/ COPY TO: 1. APP ELLANT 2. RESPONDENT 3. CIT 4. CIT(A) 5. DR, ITAT, BANGALORE. 6. GUARD FILE BY ORDER SENIOR PRIVATE SECRETARY, INCOME TAX APPELLATE TRIBUNAL, BANGALORE.