2017 (8) TMI 320

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....al. Since, the appeals arises out of common set of facts, we dispose-off both the appeals by this common order for the sake of convenience and brevity. First, we take up revenue's appeal ITA No. 2650/Mum/2015 where the revenue has assailed the decision of Ld. CIT(A) qua treatment of certain lease income under the head 'Business Income' as against 'Income from House Property' and consequential allowance of rental expenditure / depreciation there-from and allowing set-off of unabsorbed depreciation of AY 1995-96 beyond eight years. 2. Briefly stated, the assessee, being resident corporate assessee, was subjected to an assessment u/s 143(3) vide Assessing Officer [AO] order dated 12/03/2013 wherein the total income of the assessee was deter....

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....er law after verifying earlier years record. Aggrieved, the revenue is in appeal before us. 3. At the outset, Ld. Counsel for Assessee [AR], Shri Vijay Mehta, drew out attention to various orders of Tribunal in assessee's own case from AY 2005-06 to 2009- 10 to contend that the issue of taxability of rental income under the head 'Business Income' as per the contentions of the assessee has been accepted by the Tribunal in all these years. Further, the revenue's appeal against Tribunal order for AY 2005-06 was dismissed by Hon'ble Bombay High Court in ITA No.1432 of 2011 judgment dated 28/02/2012 on the premises that no substantial question of law arose. The copies of relevant judicial pronouncements have been placed in the paper-book. The....

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....91/-. During assessment proceedings, the assessee was found to have earned exempt dividend income of Rs. 10,12,650/- which called for a disallowance u/s 14A. The assessee contended that there was no general interest expenditure so as to attract any such disallowance. However, not convinced with assessee's arguments and after perusing various judicial pronouncements, AO applied Rule 8D and worked out disallowance for administrative expenses u/r 8D(2)(iii) @0.5% of average value of investments which came to Rs. 97,38,266/-. The said disallowance was finally restricted to Rs. 77,00,191/- being the expenses proportioned by the AO towards business expense excluding interest expenditure. Aggrieved, the assessee carried the matter before Ld. First....

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....e from House Property'. A perusal of Balance Sheet reveals that the assessee's Share Capital & Reserves stood at Rs. 23.21 Crores, Loan Funds stood at Rs. 46.16 crores whereas investments stood at Rs. 42.45 crores. The assessee has debited finance charges of Rs. 4.68 Crores in the Profit & Loss Account. Prima facie, the assessee has used mixed funds to make the investments which results into triggering of Rule 8D(2)(ii). In the revenue's appeal, we have already settled that the rental income earned by the assessee shall be chargeable under the head 'Business Income'. Therefore, without delving much deeper into the issue, we are of the considered opinion that disallowance computed by AO under Rule 8D require re-appreciation / re-working in t....