Tribunal upholds business expenses & income treatment, dismisses Revenue's appeal.

The Tribunal dismissed the Revenue's appeal challenging the disallowance of business expenses and income treatment on sub lease of land, as well as the disallowance of interest on borrowed capital utilized for property construction. The Tribunal upheld the Ld.CIT(A)'s decision, allowing the claimed expenses and treating the income under business income. It was determined that the assessee had commenced business activity earlier, and there were no contradictory facts presented by the Revenue for the current year. Therefore, the Tribunal dismissed all grounds of the appeal on September 15, 2014.

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Issues:
1. Disallowance of business expenses and income treatment on sub lease of land.
2. Disallowance of interest on borrowed capital utilized for property construction.

Issue 1: Disallowance of business expenses and income treatment on sub lease of land:
The Revenue challenged the Ld.CIT(A)'s decision regarding the income on sub lease of land and maintenance income under business income, along with the allowance of various expenses claimed by the assessee. The AO disallowed the business loss claimed by the assessee due to the absence of business activity and held that the expenses should be capitalized. However, the Ld.CIT(A) considered the assessee's business for the development of a Biotechnology Park as already set up and commenced. The Ld.CIT(A) directed the AO to assess the sub lease income and maintenance income under business income and allowed the claimed expenses. The Tribunal, based on previous orders, upheld the Ld.CIT(A)'s decision, stating that the assessee had commenced business activity earlier, and there were no contradictory facts presented by the Revenue for the current year. As a result, Grounds No. 1 and 2 were dismissed.

Issue 2: Disallowance of interest on borrowed capital utilized for property construction:
The Revenue contested the Ld.CIT(A)'s deletion of the addition made by the AO concerning interest on borrowed capital used for property construction. The Ld.CIT(A, following a previous order for A.Y. 2008-09, ruled in favor of the assessee. The Tribunal also confirmed this decision, stating that if interest is paid for acquiring or constructing assets used to earn taxable income, the claim for interest expenditure should be allowed. Since the Tribunal upheld the Ld.CIT(A)'s decision for A.Y. 2008-09, there was no reason to interfere with the current decision. Consequently, Ground No. 3 was dismissed. In conclusion, the appeal filed by the Revenue was dismissed by the Tribunal on September 15, 2014.

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