Tribunal remands rent expenditure disallowance issue back to Assessing Officer for further review.

The Tribunal remanded the issue of disallowance of expenditure on accumulated service tax on rent to the Assessing Officer for further examination. The disallowance of rent paid amount to Ms. Manju Gosai was also remanded for the assessee to prove the oral tenancy and business use of the premises. The appeal was partly allowed for statistical purposes as the Assessing Officer was directed to reexamine the issue based on the submissions and documents provided by the assessee.

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Issues Involved:
1. Disallowance of expenditure on accumulated service tax on rent
2. Disallowance of rent paid amount

Summary:

Issue 1: Disallowance of expenditure on accumulated service tax on rent
The assessee filed an appeal against the order of the ld. Commissioner of Income Tax (Appeals) for the assessment year 2014-15. The appeal raised grounds related to the disallowance of expenditure on accumulated service tax on rent and disallowance of rent paid amount. The assessee claimed that the service tax on renting of property was levied by the legislature, and subsequent amendments made the liability applicable retrospectively. The assessee argued that the disallowance made by the Revenue authorities should be quashed. However, the CIT (Appeals) upheld the disallowance stating that the liability of service tax on rent was not of the appellant but of the property owner as per the lease deeds. The Tribunal remanded the issue to the Assessing Officer for further examination based on the submissions and documents provided by the assessee.

Issue 2: Disallowance of rent paid amount
Regarding the disallowance of rent paid to Ms. Manju Gosai, the Assessing Officer and the CIT (Appeals) rejected the claim due to the absence of a written lease agreement and lack of proof that the premises were used for business purposes. The assessee contended that there was an initial lease deed dated 01.02.2009, which was later renewed orally. The Tribunal decided to remand the matter to the Assessing Officer for the assessee to prove the oral tenancy and the usage of the premises for business purposes. The Assessing Officer was directed to reexamine the issue after providing an opportunity for the assessee to be heard. As a result, the appeal by the assessee was partly allowed for statistical purposes.

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