TaxTMI 
TaxTMI 
TaxTMI 
2019 (10) TMI 844
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....bject of the Company is to deal in properties and the Rent income from such properties is consistently offered for tax under the head of Business and the appellant has claimed depreciation u/s 32 on those properties. Also the said view is suppor ted by the Apex court in case of Chennai Proper ties & Investment Ltd. Vs. CIT 56 Taxmann 456 (2016). Therefore, addition made due to change of Head of Income from Business to House property is to be deleted. 2. Without prejudice to ground No.1 above, for not allowing Interest paid for loan taken for the purpose of properties held as depreciable asset against income assessed under the head House Property. 3. On sale of Proper t ies which are depreciable assets, instead of reducing sale consideration from block of assets u/s 32, the same was taxed under section 45 as Long Term Capital Gain. The addition under the head Long Term Capital Gain is to be deleted. 4. Due to losses in the company the financial institution has granted loan in the name of the director and the car was also purchased in the name of the directors. The car was reflected as an asset in the balance sheet of the Company also the repayment of loan was made by the compa....
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....R') for the assessee, at the very outset submitted that the appeal filed in the present case involved a delay of 4 days. It was submitted by the ld. A.R, that the appeal was to be filed before the Tribunal latest by 29.10.2016. However, as the office of the assessee was closed because of Diwali holidays from 28.10.2016 till 01.11.2016 and the director of the assessee company viz. Mr. Uday Pratap Singh was not available in town at the relevant point of time, therefore, for the aforesaid inadvertent and bonafide reasons there was a delay involved in filing of the present appeal. The aforesaid factual position had been supported by the assessee on the basis of an 'affidavit', dated 22.11.2018 that has been placed on our record. The ld. Departmental Representative did not object to the application filed by the assessee for condonation of delay of 4 days in filing of the appeal. 6. We have considered the reasons leading to the aforesaid delay of 4 days in filing of the present appeal by the assessee, which we find is duly supported by an 'affidavit' of the director of the assessee company, dated 22.11.2018. As there is a justifiable and a bonafide reason leading to the aforesaid inadve....
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....rawn during the course of hearing of the appeal. Also, it was submitted by the ld. A.R, that for the reason that Mr. Uday Singh, director of the assessee company was also a director in two other companies, the claim of the assessee towards depreciation on the car could not have been declined. As regards the disallowance of the vehicle expenses by the A.O, it was submitted by the ld. A.R, that there can be no question of any personal expenses in the case of a company. In order to drive home his aforesaid contention, support was drawn by him from certain judicial pronouncements. Lastly, it was submitted by the ld. A.R, that the lower authorities had wrongly disallowed the assesses claim in respect of the education expenses which were incurred in respect of one of its director viz. Mr. Uday Singh for pursuing of an "Advance Management Programme" from Harvard business school. It was the claim of the ld. A.R, that as the aforesaid expenses were incurred wholly and exclusively for the purpose of the business of the assessee which was to be benefitted by the aforesaid education of the director, therefore, the same was duly allowable under Sec.37 of the Act. 8. We have heard the authorize....
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....ng various business activities such as house-keeping, security, telephone, electricity, maintenance etc. No cogent material or evidence was brought to our notice by the learned DR so that the finding given by the learned CIT(A) could be reversed. We, therefore, confirm the order of the CIT(A) on this account." Accordingly, finding ourselves to be in agreement with the aforesaid view, we respectfully follow the order passed by the Tribunal in the assesses own case for A.Y. 2010-11. As such, the A.O is directed to assess the rental receipts in the hands of the assessee as its "business income". The Ground of appeal No. 1 is allowed. 10. As we have concluded that the rental receipts had rightly been shown by the assessee as its business income, therefore, its alternative claim that the A.O had erred in not allowing the interest paid on loan taken for the purpose of properties, while computing its income under the head 'income from house property', does no more survive and is rendered as infructuous. The Ground of appeal No. 2 is thus dismissed as having been rendered as infructuous. 11. We shall now advert to the claim of the assessee that the lower authorities had erred in assess....
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....e the fact that the same was reflected as an 'asset' in its balance sheet. As is discernible from the orders of the lower authorities, the A.O observed that though the purchase price of the motor car was paid by the assessee company, however, it was purchased and thereafter registered in the name of Mr. Uday Singh, director of the assessee company. Also, it was observed by the A.O that the vehicle was not registered in the name of the assessee company under the Motor Vehicles Act. In the backdrop of the aforesaid facts, the A.O decline to allow the assesse's claim for depreciation on the motor car. We have given a thoughtful consideration to the issue under consideration and are unable to persuade ourselves to subscribe to the view taken by the lower authorities. Admittedly, the motor car that was reflected as an asset in the 'balance sheet' of the assessee company was both purchased and registered in the name of its director viz. Shri Uday Singh. Also, it was observed by the A.O, that as the aforesaid director viz. Shri Uday Singh was also director in two other companies, therefore, it could safely be concluded that the aforesaid car which was registered in his name was not being ....
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....enses pertaining to the aforesaid motor car cannot be ruled out, we are afraid cannot be accepted. As the case before us is that of a company, therefore, in our considered view there can be no question of any personal expenses. Our aforesaid view is fortified by the following judicial pronouncements: Sr. No. Particulars 1 Sayaji Iron & Engg. Co. Vs. CIT 253 ITR 749 (Guj) 2. DCIT Vs. Haryana Oxygen Ltd. 76 ITD 32 (Del) 3 Omkar Textile Mills (P) Ltd. Vs. ITO 115 TTJ 716 (Ahm) 4. KSS Ltd. Vs. DCIT 157 ITD 124 (Mum) We thus, on the basis of our aforesaid observations vacate the disallowance of motor vehicle expenses of Rs. 7,39,655/- made by the A.O. 13. We shall now advert to the disallowance of education expenses which were incurred by the assessee company on account of sponsoring the education of one of its director i.e. Mr. Uday Singh for pursuing an 'Advanced Management Programme' from Harward Business School. As is discernible from the orders of the lower authorities, the assessee company had claimed expenses of Rs. 14,77,830/-, that was claimed to have been incurred on account of sponsorship of education of one of its director viz. Shri Uday Singh for pursuing a....