SHAKEEL AFZAL LADAK,MUMBAI vs. CIT NFAC, DELHI

The fact in brief is that return of income declaring total income of Rs.67,70,930/- was filed on 28.10.2013. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 03.09.2014. During the course of assessment the assessing officer noticed that assessee has shown rent receipt from property to the amount of Rs.20,10,600/- under the head business income. Out of the aforesaid rent receipt after claiming expenditure the assesse has shown profit of Rs.10,40,460/-. However, the A.O has treated the aforesaid receipt as income from house property and after allowing 30% of deduction determined the income from house property at Rs.14,07,420/-. During the course of assessment the A.O has also noticed that assessee has made investment in shares and mutual funds of Rs.90,81,500/-, therefore, determined disallowance u/s 14A r.w.rule 8D to the amount of Rs.45,408/- being the expenditure attributable to earning exempt income.

Aggrieved, the assessee filed the appeal before the ld. CIT(A). The ld. CIT(A) has dismissed the appeal of the assessee reiterating the facts reported by the A.O.

Heard both the sides and perused the material on record. The ld. CIT(A) stated that in spite of issuing repeated notices no detail has been filed by the assessee. In the form of 35 filed before the ld. CIT(A) the assesse has categorically claimed that his case is covered by the decision of ITAT as in the earlier year the similar issue of rent receipt on identical facts was adjudicated in favour of the assessee wherein it is held that rent received is business income. However, the ld. CIT(A)