2018 (3) TMI 1568

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....g disposed of by this consolidated order. 3. Identical grounds are raised in these appeals and they read as follows:- "1. The Order of the Commissioner of Income tax (Appeals-II), Kochi, in appeal No.ITA-92B/NC/Cir.1(1) / CITA)-II/2015-16 dated 30-06-2016, is opposed to law, facts and circumstances of the case. 2. Whether on the facts and circumstances of the case, the learned CIT(A) was right in allowing Diesel expenses which are not an admissible expenditure under section 23 to 27 of the Act? 3. The learned CIT(A) ought to have appreciated that gross rent as per lease agreement is assessable under the Income Tax Act. 4. The learned CIT(A) erred in granting relief to the assessee on the basis of suppl....

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....ncome as and when it is received and the amount deducted by the tenant towards Diesel expenditure of Rs. 67,83,906/- as per the agreement entered has been considered. The assessee has not furnished any confirmation letter from the tenant i.e. M/s.Pantaloon India Retail Limited till date for the Diesel Expenditure claimed. After taking into consideration of the fact mentioned in the Lease Deed, it is proposed to disallow 1/3rd of the Diesel Expenditure claimed of Rs. 67,83,906/- and the balance amount of Rs. 45,22,604/- is allowed towards Diesel Expenditure." 4.2 Subsequently, notice u/s 148 of the I.T.Act was issued proposing to reopen the order passed u/s 143(3) for the reason that the A.O. while completing the assessment u/s 143(3) of ....

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....aken by the assessee that the electricity board connection till it is received, the monthly rent payable would vary depending upon diesel expenditure incurred by the tenant. 5. Aggrieved by the order of the CIT(A), the Revenue has filed the present appeals before the Tribunal. The learned Departmental Representative strongly relied on the grounds raised and contended that the diesel expenditure is not an allowable expenditure as per the provisions of the Act, while computing the house property income. 6. The learned AR, on the other hand, relied on the findings of the CIT(A) and has also filed confirmation from M/s.Pentaloon India Retail Limited. In the confirmation letter of the tenant, it is stated that they have deducted Rs. 67,83,....

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....alue of diesel expenses incurred would not have accrued to the assessee as income by virtue of the supplementary agreement dated 15.07.2008. On the contrary, if the assessee had received the total rent and thereafter paid over the diesel expenditure incurred by tenant, it may only tantamount to application of income received by the assessee. These facts have not been examined by the CIT(A) nor the A.O. The Assessing Officer in the assessment completed u./s 143(3) had disallowed 1/3rd of the total diesel expenditure for the reason that there was no confirmation from the tenant for incurring the diesel expenses. In the reassessment completed u/s 143(3) r.w.s. 147 of the I.T.Act, 2/3rd of the diesel expenditure, which was allowed in the assess....