2018 (6) TMI 227

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....e from House Property". 2. On facts and in circumstances of the case and in law, the Ld. CIT (A) has erred in holding that rental expenses of Rs,59,94,458/- and the depreciation of Rs. 1,30,41,779/- on Building are allowable expenses against the rental income because the same is in nature of business income and not income from house property. 3. The appellant prays that the order of the Ld. CIT (A) on the above grounds be set aside to the file of the AO or confirm the order of the AO. 3. Briefly stated, the facts of the case are that the assessee-company had incurred various expenses in connection with earning of the business centre income and lease rental income on leasing plant and machinery and premises. The Assessing Officer (AO) assessed the business centre income and rental income under the head "Income from House Property" as against "Income from Business" and the remaining income under "Income from Business". Thus, the AO identified expenses of Rs. 89,89,271/- and depreciation of Rs. 1,30,41,779/- as relating to rental income. Out of these expenses of Rs. 89,89,271/-, the assessee had already disallowed Rs. 21,35,116/- towards diminishing in value of in....

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....und as a facts one way or the other way and the parties have allowed that position to be sustained by not challenging the order it would not be appropriate to allow the proposition to be changed in subsequent year. The Hon'ble Supreme Court while holding so made a reference of the full bench decision of the Madras High Court wherein the fundamental reasons have been given for not deviating the stand in different assessment years. The observation extracted by the Hon'ble Supreme Court in this judgment and appearing at page 328 of the journal reads as under: "A Full Bench of the Madras High Court considered this question in T.M.M. Sankaralinga Nadar and Bros. v. CIT (1929) 4 ITC 226. dealing with the contention the Full Bench expressed the following opinion (p.242).+ The principle to be deduced from these two cases is that where the question relating to assessment does not vary with the income every year but depend on the nature of the property or any other question on which the rights of the parties to be taxed are based, e.g. whether a certain property is trust property or not, it has nothing to do with the fluctuations in the income, such questions, if decided by....

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....authoritative pronouncement of Hon'ble Supreme Court the AO is supposed to maintain consistency on his stand upto and unless there is material change either in the facts or on the law. No such thing is discernible from the assessment order. More so, the AO has not doubted the leasing business of the assessee because he has accepted the assessee's version as far as the rental income received by the assessee on the properties taken on lease and thereafter subleased by it to the sister concerns. In view of the above discussion, we allow the appeals of the assessee and direct the AO to assess the rental income from leasing activity under the head business income. Consistently, we also allow the depreciation on the building as well as equipment provided by the assessee. Since we upheld the leasing activity of the assessee as a business activity, therefore, the AO is directed to allow the other incidental expenses such as electricity charges, security charges and repairs of the building." 6.1 Facts being identical, we follow the above decision and dismiss the appeal filed by the Revenue. ITA No. 1363/MUM/2016 Assessment Year: 2011-12 7. The grounds of appeal filed by the asse....

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....TA No: 423/Mum/2015) dated 19.07.2016, (iii) Indus Valley Investments v. DCIT being ITA No. 3763/Mum/2013 for AY 2009-10 dated 29.04.2015, (iv) M/s Daga Global Chemicals v. Asst. CIT being ITA No. 5592/Mum/2012 dated 01.01.2015, (v) M/s Slyvex Cable Co. Pvt. Ltd. v. Dy. CIT being ITA No. 8581/Mum/2011 for AY 2008-09 dated 24.02.2016, (vi) M/s Global Capital Ltd. v. ACIT being ITA No. 6586/Del/2013 for AY 2009-10 dated 27.11.2015 and (vii) DCIT v. DCM Ltd. being ITA No: 4467/Del/2012 for AY 2009-10 dated 01.09.2015. 11. On the other hand, the Ld. DR relies on the order passed by the Ld. CIT(A). 12. We have heard the rival submissions and perused the relevant materials on record. The reasons for our decisions are given below. The issue here is the disallowance made by the AO u/s 14A r.w. Rule 8D(2)(iii). The issue may be examined by the relevant recent decisions of the Hon'ble Supreme Court and Hon'ble Bombay High Court. We are of the considered view that the decision in Godrej & Boyce v. DCIT [2010] 194 Taxman 203 (Bom.); Godrej & Boyce Manufacturing Company Ltd. v. DCIT (2017) 81 taxmann.com 111 (SC) and Maxopp Investment Ltd. v. CIT (2018) 91 taxmann.com 154 (SC) have rel....