TaxTMI 
TaxTMI 
2017 (4) TMI 568
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....r red in de let ing the di sal lowance of Rs. 1,38,922/- being depreciation on furniture and fixtures (leased assets) whose lease rent has been offered under the head 'Income from House Property', without appreciating the fact that no depreciation is allowable on any asset, the income of which has been declared under the head 'Income from House Property'. 2. On the facts and in the circumstances of the case and in law, the L d. CIT(A) erred in deleting the proportionate disallowance of expenses of Rs. 39,38,460/- out of Rs. 2,19,36,152/- relatable to leased property claimed against business income, without apprec i at ing the fac t tha t the above expenses being attributable to both the activities, i.e. business as well as ....
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....essee preferred appeal before the Ld. CIT(A). 4. The Ld. CIT(A), after considering the submissions of the assessee, observed that the assessee had leased out the flats along with furniture and fixtures installed in the flats. He further observed that there was only one agreement for lease and there was no separate charge in the lease agreement towards the furniture and fixtures. He therefore observed that the assessee had not charged any separate rent for furniture and fixtures. He accordingly allowed the depreciation claim on the furniture and fixtures installed in the leased units. Being aggrieved by the above order of the Ld. CIT(A), the Revenue has come in appeal before us on this issue. 5. We have heard the rival contentions of the ....
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....ount of Rs. 80,17,355/- being the expenditure incurred relating to the leasing activity on proportionate basis. He, however, observed that since the assessee has already disallowed a sum of Rs. 40,78,895/- as maintenance expenditure, he, hence, accordingly, further disallowed a sum of Rs. 39,38,460/- and added back the same to the income of the assessee. 7. In appeal, the Ld. CIT(A) deleted the further disallowance made by the AO of Rs. 39,38,460/- by observing as under: "5.2 Ground 3: This is against the action of the AO in disallowing various common expenses on a pro rata basis (leased area to total area) as against the appellant identifying the specific expenses relating to the leased flats. From the details filed before me, I find tha....
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.... maintenance listed out above and the same are not debited to the P&L A/c. Only the deficit of maintenance income over expense is debited to the P&L A/c. If there is a surplus, the same would have been credited to the P&L A/c as income. It is clear that the AO has not appreciated the facts in proper perspective and therefore the addition made is misconceived on facts. I therefore delete the addition of Rs. 39,38,460 made by the AO on this count." 8. A perusal of the above findings of the Ld. CIT(A) reveals that the Ld. CIT(A) has noticed that the assessee had been maintaining separate account for the maintenance charges received from each of the building rented out and as well as the expenditure actually incurred on maintenance of these bu....