AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (9) TMI 955
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....g out of office premises owned by the appellant under the head 'Profits and gains of business or profession' instead of the head 'Income from house property'. 2. On the facts and in the circumstances of the case and in law, the Commissioner of Income- tax (Appeals) erred in upholding the action of the Assessing Officer in taxing the impugned rental income under the head 'Profits and gains of business or profession' merely on the ground that impugned property was a part of the business assets of the appellant on which depreciation had been claimed. 3. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in not appreciating the fact that the impugned property was used till AY 2014-15 as the primary office premises of the Appellant company and has been a part of the block of assets on which depreciation has been claimed under section 32. Disallowance under section 14A in respect of expenditure attributable to earning of exempt income: Rs. 55,773: 4. On the facts and in the circumstances of the case and in law, the Commissioner of Income-tax (Appeals) erred in upholding the disallowance under sectio....
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....suing the show cause notice and considering the reply of assessee, treated the rental income from house property (business asset) as income from "business income". The assessing officer further held that that in future on sale of property will be considered as short term capital gain under section 50 of the Act. 3. The assessing officer during the assessment further noted that the assessee has made investment for earning exempt income. On show cause notice for disallowance under section 14A, the assessee claim that investment was made in group concerned as a strategic decision. The assessing officer invoked the provision of Rule 8 D and worked out the disallowance of Rs. 4,97,414/-. The assessing officer disallowed Rs. 399598/- under Rule 8D(ii) and Rs. 97,816/- under Rule 8D(iii). Since the assessee has already disallowed amount of Rs. 55,774/- the assessing officer after granting set-off of suo moto disallowance, disallowed Rs. 4,41,640/-. On appeal before learned Commissioner (Appeals) the treatment of income from 'house property' as 'business income' was upheld, however, disallowance under section 14A read with Rule 8D was sustained to the extent of Rs. 97,816/-. Thus, further....
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....e ld. AR for the assessee further submits that as per sub-section (2) of section 38 of the Act, if any building used for the purpose of business is not exclusively so used for the purpose of business, the deduction under section 32 shall be restricted to a fair proportionate part, which may be determined by the assessing officer. 6. On the other hand the ld. DR for the revenue supported the order of the lower authorities. The ld DR further submits that the assessee was claiming depreciation on the asset and also claimed depreciation in respect of business asset and claimed rental income under the head ' income from house property' which is not permissible under the scheme of Income tax Act. The ld. DR further submits that the ratio of case laws relied by the assessee are not applicable on the facts of the present case. 7. We have considered the rival submissions of the parties and have gone through the orders of the lower authorities. We have also deliberated on the various case laws cited by ld AR for the assessee. There is no dispute that the office premises, which is let out by the assessee during the relevant year under consideration is part of block of asset and the assessee....
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....d under sections 22 to 27 of Chapter IV-C of the Act, while computing 'income from house property' chargeable to tax. This chapter IV-C of the Act does not provide for depreciation on immovable properties as one of deductions from income earned by assessee from letting out of such house property. However, section 32 of the Act provides for depreciation and falls under Chapter IV-D which concerns itself with computation of income from Profits or Gains from 'Business or Profession'. Thus, there is no question of allowing any deduction as depreciation under section 32 for the period for which this property was let out and income thereof was offered for tax under the head 'income from house properties'. Thus, we concur with the finding of the assessing officer. 9. However, we have noted that in second contention by ld AR for the assessee that office house property (office premises) earlier used for the purpose of business is not used for the purpose of business during the year under consideration and that the assessee has let out the same for the first time on rent and assessing officer may restrict to a fair proportionate part of asset for the purpose of depreciation. We find....
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....rder that before re-computing the disallowance under Rule 8D(2)(iii), the assessing officer shall grant opportunity of hearing to the assessee. The assessee is also directed to provide necessary details and information to the assessing officer. 15. In the result, this ground of appeal is partly allowed. 16. Ground No. 8 relates to deduction of education cess. The ld. AR for the assessee submits that the assessee has raised this ground of appeal for the first time before the Tribunal. The Ground of appeal is purely legal in nature. The assessee is claiming deduction of payment of education cess as allowable deduction on the basis of various decision of Tribunal, Hon'ble Bombay High Court in Sesa Goa Ltd. Vs. DCIT [2020] 107 CCH 376 (Bom) and Hon'ble Rajasthan High Court in Chambal Fertilizers and Chemical Ltd. Vs. DCIT (ITA No. 52 of 2018). 17. On the other hand, the ld. DR for the revenue submits that the assessee has not claimed such deduction either in the return of income or before the First Appellate Authority. The Hon'ble Bench may take decision for admission of additional ground of appeal and in case the additional ground of appeal is admitted, the issue may be restored t....