TaxTMI 
TaxTMI 
2013 (11) TMI 1317
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....une, 2008 held as under:- "24.3 From the above facts and the case law relied upon both by the revenue and the assessee, it is clear that there was no letting of any machinery, plant or furniture belonging to the assessee. Once this finding of fact is not controverted, then there can be only one conclusion that letting of building which has certain amenities for which no separate charges are being recovered by the assessee would be liable to tax under the "income from house property". Before parting, we would also like to deal with the alternate submission by the counsel of the assessee Mr. Pradeep Dinodia that in case this is taxed as "income from other sources", then deduction of depreciation and annual repairs would still have to be allowed to the assessee. This would, in fact, make the whole exercise of revenue to change the head of income as purely academic as there would be very marginal difference between the allowance of depreciation and repairs and a notional allowance of 20% in the year under revenue. We agree with the assessee's counsel that there is no gain to the revenue in any case by shifting the head of income from one to the other. &....
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....ation for acquisition of which was issued between 13.11.1959 and 02.12.1963. The appellant company has relied upon the decision of the Hon'ble Delhi High Court in the case of DLF United Ltd. v. CIT 161 ITR 714 (Delhi) wherein the Hon'ble Court has held as under: "As the remaining four questions are already covered by the aforementioned decision, we may also note what was decided in the aforementioned reported case. It was held on question No.1, that prior to the acquisition of the land in question and even till the date of the award, the assessee had made no attempt to transfer or alter the character of the agricultural land and, hence, the assessee had not taken steps to develop the land in question in its normal line of business with a view to parcel it out into plots for sites to be utilised for housing and commercial buildings. In other words, the agricultural land purchased originally by the assessee for urbanization or conversion into building plots remained agricultural land till the acquisition and payment of compensation. Hence, the first question was answered in the negative, i.e., the profits were not business profits. The same is the position i....
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....grossly erred in confirming the disallowance of Rs.79,76,437/- in this year and also in not giving directions to exclude it from A.Y. 2005-06 in which the amount recovered subsequently was offered for tax. This has lead to double disallowance." 11. At the time of hearing before us, the learned counsel for the assessee argued this ground of appeal and also submitted the written submission, the relevant portion of which reads as under:- "Ground No.1.1 to 1.3 : Disallowance of Rs.79,76,437/- claimed as bad debts. - The assessee is engaged in the business of real estates for the last many years. The business model of the assessee has been discussed by the AO at page 2 of his order. - A firm namely DLF Real Estate Developers, which was subsequently merged with the assessee, sold a property consisting of floor space measuring about 35866 sq. ft. to M/s RPG Home Finance Pvt.Ltd. in November 1995 for an agreed price of Rs.9.14 crores and as per other terms and conditions, as per copy of agreement enclosed at pages 17 to 43 of the Paper Book. - The said buyer paid part of the amount and defaulted on....
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....e cost price, towards maintenance charges, towards holding charges of the property etc. including interest on delayed payments. The assessee also recovered the amounts in assessment year 2005-06 which were written off by it in assessment year 2003-04. This amount of Rs.79,76,437/- along with other charges received from RPG Home Finance Pvt.Ltd. were accounted for as its income in assessment year 2005-06. This is evidenced by the details filed before the AO/CIT(A) as per PB pages 158 and 159 and also 160 and 161, which is the copy of statement of account of RPG Home Finance Pvt.Ltd. evidencing the receipt of payments. Copy of letter of settlement made between the assessee and the said RPG Home Finance Pvt.Ltd. is also available at PB page 165. - During the course of assessment proceedings as well as appellate proceedings, all these facts were explained to the AO/CIT(A). With regard to the fact that amount has subsequently been recovered by the assessee and accounted for as its income in assessment year 2005-06, the CIT(A) called for a remand report of the A.O. The intention of the CIT(A) to call for such remand report, as were indicated during the course of....
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....s not in dispute. - Disallowance of the sum would amount to double taxation of the sum of Rs.79,76,437/-, one by disallowance in A.Y. 2003-04 and again by taxing the same in A.Y. 2005- 06 on receipt thereof from the buyer. - Therefore, there should not be any reason to disallow the amount when the assessee in its wisdom and as a prudent businessman wrote off in assessment year 2003- 04 on the expectation that even if the ultimate settlement with the buyer takes place in the future, the amount of maintenance charges being the periodical cost of maintenance charges may not be recovered. Further, it is a different matter that this amount along with other charges were also recovered by the assessee and properly accounted for as its income. Therefore, the action of the Assessing Officer, which has been confirmed by the CIT(A) may kindly be set aside and relief may be allowed to the assessee." 12. Learned DR, on the other hand, stated that the deduction claimed by the assessee as a bad debt cannot be allowed and the fact that it was recovered subsequently also shows that it has not become bad. He also submitted that the deduction for expenditure of maintenance cha....
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....s case in confirming the disallowance of Rs.8,38,271/- on account of writing off of balance due from a wholly owned subsidiary set up for the proposed hotel project at DLF City, Gurgaon, which was subsequently abandoned by the company, on wholly illegal, erroneous and untenable grounds. 2.2 That the learned CIT(A) has recorded erroneous facts on this issue and the order of CIT(A) is based on nonexisting and perverse facts. 2.3 That the learned CIT(A) ought to have appreciated that incurring of such expenses through subsidiaries is in the natural course of business of the assessee." 15. We have heard the arguments of both the sides and perused the material placed before us. The learned CIT(A) has sustained the disallowance with the following finding:- "6.1 I have carefully considered the assessment order and the submission made by the ld.AR. As per the assessment order, the appellant company had shown an amount of Rs.8,38,271/- as written off in respect of expenses incurred on proposed hotel at Qutub Enclave. During the assessment proceedings, the appellant explained that the expenses had been incurred on account of marketing survey, professional fee an....