TaxTMI 
TaxTMI 
2013 (10) TMI 785
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....Rs. 87,163 Office expenditure Rs. 13,794 Legal expenses Rs. 92,500 Vehicle maintenance Rs. 1,725 Salaries Rs. 54,000 3. The Assessing Officer did not consider the expenditure claimed in the income and expenditure account for deduction in the absence of business income. Aggrieved, the assessee is in appeal before the CIT(A). Before the CIT(A) the assessee had offered income from business at Rs. 7,85,742/-. On verification of the receipts offered in the P&L account, the Assessing officer noticed that the assessee had no business activity in reality. She found that the assessee had disclosed interest income of Rs. 13,87,536/-, other misc. income of Rs.3,338/- and car hire charges of Rs. 15,000/-, which, as per her, were income from other sources. She noted that the assessee had claimed expenses towards interest paid on loan, car, insurance, office & legal expenses etc., besides depreciation of Rs. 2,40,266/- on Car. She opined that money lending was not the business of the assessee even if he had earned interest income. As per her, an account had been drawn by the assessee to give it the look of business income, with a view to claim personal expenses and depreciation in respe....
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....he other items were also included in the income and expenditure account. 7. The representative submitted that the assessee had claimed the following items as business expenditure. Bank charges Rs. 231 Interest paid on loan Rs.1,30,453 Car Insurance paid Rs. 87,163 Office expenditure Rs. 13,794 Legal expenses Rs. 92,500 Vehicle maintenance Rs. 1,725 Salaries Rs. 54,000 It was submitted that the other expenses shown in the income and expenditure account were added by the assessee himself as inadmissible items in the computation of income. He submitted that on a scrutiny of income and expenditure account, the assessing officer concluded that the assessee was not carrying any business of money lending. She also noticed some discrepancies in respect of purchase of car and its utilization in business. Accordingly, she treated the receipts of interest etc. as income form other sources, ignoring the other receipts and expenses shown the income and expenditure account. 8. The representative argued that the assessee is in the business of money lending since 1996, as is evident from the fact that he had made a mortgage loan of Rs. 10 lakhs to Krishna construction in 1996, as ....
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....ssee on 30.03.2007 and was delivered by him to the lessee company for their business purpose. The representative averred that the assessee had earned lease rent of Rs. 15,000/- towards the same, which was offered as business income. He argued that merely because the car was leased to a group company, the same could not have been considered as colourable transaction, without bringing on record any documentary evidence in this regard. He averred that since the registered office of the company is situated in the house owned by the assessee's wife, there was no question of any rent to be charged by the assessee. The assessee maintained that the car was used for business purpose and therefore, income from the same had been offered for taxation, entitling the assessee to claim depreciation as well as other related expenditure on car as business expenditure . 11. The CIT(A) held that merely because certain loans were advanced to some persons/companies, it cannot be said that the assessee is engaged in the business of money lending on regular basis and further the assessee has not been able to substantiate its claim by submitting any other evidence such as registration for carrying out mo....
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....ever carried out any business of money lending. Before the Hon'ble Andhra Pradesh High Court, assessee, in his own case, i.e., S.V. Rao vs. Credential Finance Ltd. and ors., has taken a plea that he is not in the business of money lending, but he has financed amount to a company as a special case in his personal capacity, and it is only occasion that he has lent the amount. Copy of High Court order dated 17.02.2006 was submitted. This clearly brings out that the assessee is not in the business of money lending, and that the interest income needs to be assessed as income from other sources." 18. We have heard both the parties. The assessee claims that he has engaged in the money lending business since 1996 based only on the advances given by the assessee to some persons which appear in the balance sheet as loans and advances. The assessee is merely trying to recover the amounts which have got blocked and the assessee has not brought out any subsistence evidence to prove that he is carrying on the money lending business. The assessee has not filed his returns of income in earlier years showing income/loss from money lending business. Further, the department has clearly brought out ....
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.... building was more than 15 years old. (c) There was no maintenance of building (d)There was no drinking water supply (e) Sewerage connection of the building was disconnected (f) There was no car parking space. (g) Lift was not working (h)Drainage and flood water stagnated in cellar for many months due to disconnection of sewerage connection. It was maintained that the above factors scaled down the selling rate of the flat. The learned A.R. argued that the rate adopted by the stamp valuation authority does not reflect the correct market value of the property. He contended that the assessee had requested the Assessing Officer to refer the matter to Valuation Officer determining its market value. The learned A.R. argued that the Assessing Officer arbitrarily invoked the provisions of sub sec.(1) of sec.50C, ignoring the provisions contained in sub section (2) and (3) thereof. 21. After hearing the parties, the learned CIT(A) held as follows: "From the letter dated 13.11.2009 it is seen that the appellant had indeed cited the above reasons for the sale of Chennai flat at a consideration lesser than the government approved rate. However, I am of the opinion that the reasons so ....
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....Short term capital gains/loss at Rs. 1,54,497/ - in the trading account of Kotak PMS Management after including management fee and other charges of Rs. 26,818/-. She noted that since the assessee was offering income under the head short term capital gains, taxable at the special rate under sec. 111 A, the said expenses are not to be allowed. The Assessing officer further noted that the assessee was engaged in trading of shares through portfolio managers. During the year he had admitted net short term capital loss in the trading account maintained with M/s. Unifi Health Management at Rs.37,03,419/- and at Rs.1,54,497/ - from Kotak PMS Management. The assessee had offered gain on open offer of shares from M/ s. Unifi Health Management account at Rs.1,51,545/- excluding expense at Rs.1,02,190/-, which pertained to expenses towards DP charges, service tax, another expenses charged by them towards the entire trade turnover of the assessee of Rs.3,69,88,001/-. Since the assessee had offered income from the said portfolio management accounts under the head 'capital gains', she did not allow the said expenses. 25. During the appellate proceedings before the learned CIT(A), it was submitte....