Tribunal partially allows assessee's appeal, grants part relief to Revenue

The Tribunal partially allowed the assessee's appeal for statistical purposes and partially allowed the Revenue's appeal. The judgment was pronounced on June 23, 2017, in Chennai.

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Issues:
1. Delay in filing appeal by Revenue
2. Disallowance of expenditure repayment claim
3. Disallowance under Section 14A r.w.r. 8D
4. Deletion of depreciation disallowance
5. Assessment of rental income under 'business income'

Delay in filing appeal by Revenue:
The Revenue filed an appeal with a 3-day delay, citing misplacement of files. The Tribunal condoned the delay, allowing the appeal to proceed on merits.

Disallowance of expenditure repayment claim:
The assessee claimed &8377; 19.20 crores as expenditure for loan repayment under a settlement scheme. The AO rejected the claim, stating no business connection between the assessee and the cooperative society. The CIT(A) upheld the decision, finding it a capital field issue. The Tribunal remitted the matter to the AO for further examination due to insufficient evidence.

Disallowance under Section 14A r.w.r. 8D:
The Revenue invoked Section 14A r.w.r. 8D for disallowing &8377; 53,499 related to exempt income investments. The Tribunal confirmed the decision, stating compliance with the Act's provisions.

Deletion of depreciation disallowance:
The AO disallowed &8377; 60,62,124 depreciation for a beverage plant, alleging non-business use. The CIT(A) reversed this based on a Tribunal decision. The Tribunal upheld the CIT(A)'s decision following precedent.

Assessment of rental income under 'business income':
The AO assessed &8377; 46.76 lakh rental income as 'business income' instead of 'income from house property.' The CIT(A) favored the assessee, citing a Tribunal decision and a CBDT circular. The Tribunal differentiated employee and third-party rentals, treating the former as business income and the rest as income from house property.

In conclusion, the Tribunal partially allowed the assessee's appeal for statistical purposes and partially allowed the Revenue's appeal. The judgment was pronounced on June 23, 2017, in Chennai.

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