TaxTMI 
TaxTMI 
2016 (2) TMI 419
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....ces of the case and in law, the learned CIT(A) erred in holding that the rent of Rs. 1,69,29,770/- received from Shoppers' Stop Ltd. and Marine Times was assessee's income from business and not 'Income from House Property' as assessed by the Assessing Officer without appreciating that the assessee was neither engaged in any business activity nor handed over any running business to its tenant but simply received rent from its tenants for the portion of building let out of which assessee was the owner. 2. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing to allow the entire claim of depreciation on building by holding that the rental income was 'Income from Business' and not 'Income from House Properties' as assessed in the assessment order. 3. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing to allow property tax of Rs. 35,91,302/- and interest on borrowed capital of Rs. 2,22,11,463/- under the head 'Business Income' without appreciating that assessee was not engaged in any business activity but had simply let out the House Pr....
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.... in A.Y. 2012-13 has accepted the income from the business centre/ commercial complex as business income of the assessee. The assessee is accordingly eligible to claim depreciation on the asset and other business expenditure. Therefore we do not find any infirmity in the order of the Commissioner of Income Tax (Appeals) [hereinafter referred to as the CIT(A)] in relation to the ground Nos.1 to 3 and the same are accordingly dismissed being covered by the decision of the Tribunal in A.Y. 2003-04. Ground No.4 6. Vide ground No.4, the Revenue has agitated the action of the Ld. CIT(A) in treating the collection of maintenance charges and miscellaneous income under business head. As observed above, since we have already held that the activity of the assessee is a commercial activity of letting of the property and providing services, hence this income has also nexus with the assessee's business activity and the same accordingly is to be assessed as business income of the assessee. We do not find any infirmity in the order of the Ld. CIT(A) in this respect also. 7. Grounds No. 5 & 6 are general in nature and do not require any adjudication. 8. Now we come to the cross objec....
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....in respect of common amenities comes to Rs. 1,088/-. Thus the cost attr ibutable to the area constructed of 8,298 sq. f t X Rs. 1,088/- = Rs. 90,28,224/- only. As against this assessee has charged the entire cost to the work in progress and to cost of sale. Thus the assessee has over stated the cost of sale. The cost of sale is therefore, worked out as under: Direct cost as per details given Rs. 15,13,14,320 Average cost per sq.ft. on area of 12,130 sq. ft. Rs. 12,474 Average cost of common amenities per sq.ft. 1088 Rs. 1,088 Total cost of sale per sq. ft. Rs. 13,562 Cost of Sale of 1282 Sq. ft (104 +1178) x Rs. 13,562 = Rs. 1,73,86,484 5.2 In view of the reasons stated above the book results declared by the assessee in respect of the cost of sales can not be accepted. Hence, the profit & loss of the assessee is modified to the extent stated above. Rs. Sale as per P&L A/c 97,37,000 Less: Cost as worked out above 1,73,86,484 Loss as admissible 76,49,484 The assessee has show a sale consideration of Rs. 97,37,000/- and the cost of sale at Rs. 2,32,98,837/- Thus, there is a loss of Rs. 1....
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....that the assessee during the year had received dividend income of Rs. 1,45,800/-. He, therefore, computed the disallowance as per rule 8D of the Income Tax Rules read with section 14A of the Income Tax Act. Being aggrieved, the assessee has come in appeal before us. 15. We have heard the Ld. Representatives of both the parties and have also gone through the records on this issue. It may be observed that in the case of Godrej & Boyce Manufacturing Co. Ltd. (supra) the Hon'ble Bombay High Court has held that Rule 8D r.w.s. 14A(2) is not arbitrary or unreasonable but can be applied only if the assessee's method is not satisfactory. It has been further held that Rule 8D is not retrospective and applies from A.Y. 2008-09. For the years for which Rule 8D is not applicable and in the event of that the AO is not satisfied with the explanation/working given by the assessee, disallowance under section 14A has to be made on a reasonable basis. Almost similar view has been expressed by Hon'ble Delhi High Court in the case of 'Maxopp Investment Ltd. & Others' vs. CIT (247 ITR 162). 16. It may be further observed that it is not a case where no exempt income was received....
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....the owner. 4. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing the Assessing Officer to allow the entire property tax under the head Business Income' without appreciating that there was no business activity in the year under consideration and the income for the year under consideration was assessed under the head 'Income from House Property'. 5. On the facts and in the circumstances of the case and in law, the learned CIT(A) erred in directing to treat collection for maintenance of Rs. 27,74,676/-, miscellaneous income of Rs. 62,234/-, parking charges of Rs. 20,69,780/-, tea sale vendor Rs. 20,974/- and promotional income of Rs. 5,21,435/- as 'Income from Business' as against Income from Other Sources without appreciating that assessee was not engaged in any business activity but had simply let out the House Property. 6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) erred in deleting the addition made of Rs. 1,82,52,106/- as Long Term Capital Gain holding Movie Times as a business asset hence depreciable asset without appreciating that Movie Times was not....
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....ever, a revised return was filed for A.Y. 2003-04 on 08.04.08 in respect of the said income in response to the notice issued under section 148 by the AO, the aforesaid sale transaction of immovable property was offered to tax in the said revised return of income. Thereafter, no action was taken by the Department and as such the revised return filed by the assessee has been accepted by the Department. 22. The Ld. CIT(A), after considering the submissions and the documents relied upon by the assessee, held that the assessee ceased to be the owner of the said property from February, 2003 therefore there was no question of assessing deemed rental income in the hands of the assessee in this respect. 23. The Ld. D.R. could not point out any defect in the well reasoned finding of the Ld. CIT(A) arrived at after going through the evidences produced by the assessee in this respect. We, therefore, do not find any infirmity in the order of the Ld. CIT(A) in this respect and the same is accordingly upheld. Ground Nos.3, 4 & 5 24. Ground Nos.3, 4 & 5 are identical to the ground No.1 to 3 of the Revenue's appeal for A.Y. 2004-05. In view of our findings given above, we do not find an....
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....e also observed that the revised return filed by the assessee in response to notice under section 148 was lying in the records. He however, further observed that the proceedings initiated under section 147 of the Act for A.Y. 2003-04 were dropped by the AO on account of non availability of reasons recorded for issuance of notice under section 148 of the Act and that the AO had mentioned that the notice under section 148 was wrongly issued for A.Y. 2003-04. Therefore, the reassessment proceedings were not processed/continued in respect of revised return filed by the assessee for A.Y. 2003-04 in response to notice under section 148 of the Act. He therefore observed that the verification and correctness of the assessee's claims i.e. cost of property, sale consideration and working of profit/loss on such sale remained unexamined by the Department in the AY 2003-04. In view of the above, he deemed it fit to consider the sale transaction as assessable in the year under consideration. After holding so, he held that the sold property was a business asset and therefore was a depreciable asset. Consequently, the provisions of section 50 of the Act were applicable as the same being the provis....
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....he Act were dropped, that cannot be a ground to assess the income of the assessee from the said transaction in the year under consideration i.e. A Y 2005-06. Once the Ld. CIT(A) has held that the transfer had taken place in A.Y. 2003-04, there was no justification on his part to assess the income from the said transaction/transfer in A.Y. 2005-06. It was open to the Revenue Authorities to take note of the revised return filed by the assessee for A.Y. 2003-04 in response to notice under section 148 of the Act and take appropriate action to verify the correctness of the claim by way of invoking relevant provisions of the Act. However, the said income cannot be assessed in the year under consideration. However, we agree with the contention of the Ld. D.R. that since it has been contended by the assessee itself that the transfer has taken place in A.Y. 2003-04 and which contention of the assessee has been accepted by the Ld. CIT(A) also hence, in the circumstances, we direct that the proceeds of the sale transaction are to be reduced from the WDV of the block of the assets in A.Y. 2003-04 itself and the assessee will not be entitled to claim of depreciation on the sold part of the asse....
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....lculate depreciation after deducting aforesaid sale consideration from the block of assets. 3. The appellant craves leave to add to, alter, to delete from or substantiate the above ground of appeal." Ground No.1 33. The Ld. CIT(A) has discussed this issue in para 5.2. of the impugned order. The AO during the assessment proceedings noted that the assessee had debited an amount of Rs. 3,40,31,832/- as interest on loans. He noted that the said amount had been disallowed in the computation of income but deduction had been claimed by way of notes. He held that no such deduction can be allowed in view of the decision of the Hon'ble Supreme Court in the case of "Goetze India Ltd. vs. CIT" 284 ITR 323. He further observed that without prejudice to the above, the claim of the assessee was not allowable even otherwise. He observed that the assessee during the year had given substantial funds to sister concern and there were multiple movements and cross movements of funds between the group concerns of the assessee. He therefore disallowed the deduction for interest payment on borrowed funds for the year under consideration. 34. In appeal before the Ld. CIT(A), it was explain....
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....imed the said deduction, however, had not deducted the same in computation income and had reserved right to claim the same during the assessment proceedings. 36. The Hon'ble Bombay High Court in the case of 'Pruthvi Brokers & Shareholders Pvt. Ltd.' (2012) 349 ITR 336 (Bom.), while relying upon the various decisions of the Hon'ble Supreme Court and other Hon'ble High Courts, has held that even if a claim is not made before the AO it can be made before the appellate authorities. The jurisdiction of the appellate authorities to entertain such a claim is not barred. The Hon'ble Bombay High Court while relying upon the decision of the Hon'ble Supreme Court in the case of 'Jute Corporation of India Limited vs. CIT' 1991 Supp (2) SCC 744 = (1991) 187 ITR 688 has observed that the power of the Appellate Commissioner is coterminous with that of the Income Tax Officer and an appellate authority while hearing appeal against the order of the subordinate authority, has all the powers which the original authority may have in deciding the questions before it, subject to the restrictions or limitations, if any, prescribed by statutory provisions. In the absence of any statutory provision, the ....
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....s.1 to 3 are regarding the treatment of income derived from commercial complex as to whether the same has to be assessed as income from house property or business income and further about the claim of allowability of depreciation and expenditure relating to said commercial complex. In view of our findings given above and the issue being covered by the decision of the co-ordinate bench of the Tribunal in the own case of the assessee for A.Y. 2003-04, these grounds are accordingly decided in favour of the assessee and the finding of the Ld. CIT(A) in this respect is upheld. Ground No.4 42. Ground No.4 is in relation to the disallowance of interest on loan amounting to Rs. 4,76,01,958/- under section 36(1)(iii). The Ld. CIT(A) has discussed this issue in para 3(c) of the impugned order for A.Y. 2006-07. The AO observed that interest on borrowed capital did not pertain to commercial complex under consideration and that the said interest payment was pertaining to the loans taken for acquisition of the business and payment of outstanding liabilities by the new shareholders/directors. 43. Before the Ld. CIT(A), the assessee explained that the interest expenditure was incurred by ....
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.... treated as business income and depreciation on the business asset is allowable and the corresponding expenditure is also held to be allowable. Ground No.4 51. So far as Ground No.4 is concerned, the same is in relation to the carried forward of losses pertaining to the depreciation of earlier years. In view of our finding given above, while deciding the assessee's appeal for A.Y. 2006-07 and 2007-08 and applying the same ratio, this ground of the appeal is also dismissed. 52. Now coming to the assessee's appeal for A.Y. 2008-09 bearing ITA No.5492/M/2011. ITA No.5492/M/2011 for A.Y. 2008-09 53. The Ld. A.R. of the assessee has stated that the appeal is time barred by 22 days. An application for condonation of delay has been moved which is accompanied by affidavit of the Managing Director of the assessee. Considering the circumstances explained therein, we condone the short delay of 22 days in this appeal. 54. The assessee, in this appeal, has agitated the action of the Ld. CIT(A) in confirming the disallowance of share issue expenses of Rs. 3,18,200/-, land tax of Rs. 35,286/- and interest on borrowed capital of Rs. 42,86,679/-. The Ld. A.R. of the assessee has s....