business loss/income from house property

[satinder chadha]

A private ltd company was incorporated in the year 1996 having main objects as consultancy in shares and property, trading in shares, purchasing property and giving it on rent.

Company traded in stocks and from the profit purchased property in the year 2000 which was given on rent in the year 2004 .In the year 2004 company started consultany business and stopped business in shares.Every year there was rent as well as consuting income .But in the year 2008-2009 company didnot have any consultany income but there was expenditure with respect to the consultancy business. Now the ITO  that he will give only 30 % dedution with respect to income from house property and no dedution with respect to expenditure incurred in consultancy as there was no business  income in  it.

 Is it correct ?

 If not can some able expert throw some light on it with reference to decided case law .

Thanks a lot.

AI Summary

Company Challenges Income Tax Officer's Limited Deductions on Rental Income and Disallowed Consultancy Expenses A private limited company, established in 1996, engaged in consultancy, share trading, and property rental. It ceased share trading in 2004, focusing on consultancy and rental income. In 2008-2009, the company had no consultancy income but incurred related expenses. The Income Tax Officer allowed only a 30% deduction on rental income and disallowed consultancy expenses due to the absence of business income. Respondents argued that expenses can be claimed if the business exists, regardless of income, and emphasized that rental income should be considered business income due to the company's objectives.