2016 (8) TMI 1506

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....ee has also filed cross-objection against the very same order for the assessment year 2010-11. Therefore, we heard the appeals of the Revenue and the crossobjection of the assessee together and disposing of the same by this common order. 2. Shri Jayaram Raipura, the Ld. Departmental Representative, submitted that the only issue arises for consideration in both the appeals is with regard to classification of rental income received by the assessee. According to the Ld. D.R., the assessee constructed a I.T. Park, namely, Olympia Tech Park, and claimed the rental income as "income from business". Referring to Section 22 of the Income-tax Act, 1961 (in short 'the Act'), the Ld. D.R. submitted that the rental income from letting out of t....

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.... power backup generators. Therefore, the CIT(Appeals) by placing reliance on the judgment of Madras High Court in CIT v. Elnet Technologies Ltd. (2013) 213 Taxman 129, allowed the claim of the assessee. Referring to the grounds of appeal filed by the Revenue before this Tribunal, the Ld. representative submitted that the Revenue is placing reliance on the judgment of Madras High Court in CIT v. Chennai Properties & Investments Ltd. (266 ITR 685). This judgment of Madras High Court was reversed by the Apex Court. Therefore, according to the Ld. representative, the reliance placed by the Revenue in the grounds of appeal in Chennai Properties & Investments Ltd. (supra) is misconstrued. Therefore, according to the Ld. representative, the CIT(Ap....

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....ssing Officer disallowed Rs. 21,91,665/- under Section 14A of the Act. 6. Shri Ajit Kumar Choradia, the Ld. representative for the assessee, submitted that during the year under consideration, the assessee earned dividend income of Rs. 6,77,302/- and the same was claimed as exempted from taxation. The Assessing Officer worked out the disallowance under Section 14A of the Act to the extent of Rs. 21,91,665/-. According to the Ld. representative, the investment made by the assessee to the extent of Rs. 26,65,60,000/- in Deep Discount Bonds cannot be construed as investment for earning the exempted income. According to the Ld. representative, the income from Deep Discount Bond is taxable. Moreover, the same was offered for taxation for assess....

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....the assessee has not earned any exempted income. Hence, the assessee earned the exempted income and the Assessing Officer is not satisfied about the claim of expenditure, the disallowance has to be computed as per the method prescribed under Rule 8D(2) of Income-tax Rules, 1962. 9. Referring to the assessment order, more particularly at page 5, the Ld. D.R. submitted that the Assessing Officer has taken the direct expenditure attributable to the income and the indirect expenditure incurred by the assessee, which is not relatable to any particular income and also has taken the average investment during the year under consideration and computed the disallowance at Rs. 21,91,665/-. Even though the assessee claims that the investment made to t....