TaxTMI 
TaxTMI 
2013 (7) TMI 253
X X X X Extracts X X X X
X X X X Extracts X X X X
....House Property" on account of enhancement of annual let out value in addition to actual rent received by calculating the notional interest on deposits. 4. Facts in brief:- The assessee, in the present case, is having income under the heads "Income From Interest", "Income From Rent", "Income From Service Charges", and "Income From Other Sources" which includes "Income From Capital Gain" and "Income From Sale of Land". The Assessing Officer, on a perusal of the records, noted that the assessee has credited a rent of Rs. 5.34 lakhs received from two parties namely Harihar Poly Fiber, Kolkata, for sum of Rs. 2.64 lakhs, and M/s. S.L. Mining and Industries Ltd., Kolkata, for Rs. 2.70 lakhs. From these lessees, the assessee has also received interest free security deposit of Rs. 25 lakhs and Rs. 80 lakhs respectively, which aggregated to Rs. 1.05 crores. In response to the show cause notice given by the Assessing Officer as to why in view of interest free deposits, the amount equal to the bank rate interest on term deposit should not be deemed to be a part of the rent received or receivable, it was submitted by the assessee that section 23(1)(a) does not contemplate such assessment of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....including in the case of J.K. Investors (Bombay) Pvt. Ltd do not apply in the appellant's case. In consideration of the relevant facts of the instant case, I find that the A.O. had justifiably concluded that the actual rent charged by the assessee was concessional rent in view of huge interest free deposit of Rs.1,05,00,000/-. From the appellant's submission made before the A.O. as well as during the appellate proceeding, I find that it is not the case of appellant that the interest free deposit was advance rent or security deposit. The substantial amount of deposit when compared with the amount of rent clearly indicates the huge deposit, as has been rightly pointed out by the A.O., was nothing but consideration for reducing the amount of actual rent. The A.O.'s finding therefore that annual rent received being 'concessional rent' was much less than the actual fair market rent at which the properties may be expected to be let out is justified. The appellant has failed to bring any material on record to establish that the rent received by it was more than or equal to the fair market rent or the amount for which the properties may be expected to be let out. As regards the quantum ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....r the purposes of section 22, the annual value of any property shall be deemed to be-- (a) the sum for which the property might reasonably be expected to let from year to year; or (b) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable:" Clause (c) of the aforesaid section will not apply to the facts of the present case as none of the properties in question remained vacant during whole or any part of the previous year. Even clause (a) will also not apply to the facts of the present case as it is applicable in those cases where property has not been let out at all during the entire year and in such a case, it has to be ascertained as to what could be the rent which property might reasonably be accepted to ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssing Officer has disallowed these expenses on the ground that no business activity was carried on by the assessee during the year and, hence, deduction under section 37(1) cannot be allowed. 11. Before the Commissioner (Appeals), the assessee submitted that certain expenses were required to be incurred for maintaining the corporate status. The Commissioner (Appeals) has rejected the assessee's contentions on the ground that the deduction can only be given if the corporate entity was engaged in activity of business and not otherwise. Since the assessee had not carried out any business activity, therefore, these expenses cannot be allowed. 12. Before us, the learned Counsel submitted that except for the expenses which are directly pertaining to the income of house property, the same should be allowed because the assessee has to maintain its corporate status and certain expenses are required. 13. On the other hand, the learned Departmental Representative relied upon the order passed by the Commissioner (Appeals). 14. After carefully considering the rival submissions, findings of the Assessing Officer and the Commissioner (Appeals) and on perusal of the expenses, we find t....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s coming from earlier years, has not been set-off either in this year or has been allowed to be carried forward in the subsequent year. If the assessee had not earned any business income in this year, unabsorbed depreciation from the earlier years has to be allowed to be carried forward to the subsequent years. Since there is no proper finding of the Assessing Officer as to why unabsorbed depreciation of the earlier year has not been allowed to be carried forward in the subsequent years, therefore, this issue also needs to be restore back to the file of the Assessing Officer for examination. Consequently, we set aside the impugned order passed by the Commissioner (Appeals) and restore the issue back to the file of the A.O. to examine the allowability of carried forward of unabsorbed depreciation in the subsequently year and to decide the issue in accordance with law. This ground is, thus, treated as allowed for statistical purposes. 19. In the result, assessee's appeal is partly allowed for statistical purposes. We now take up assessee's appeal in ITA no.3250/Mum./2011, for assessment year 2005-06, vide which, following grounds have been raised. 20. In ground no.1, the dis....