TaxTMI 
TaxTMI 
2011 (1) TMI 1573
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....of the case, ld.CIT(A) has erred in deleting the addition of Rs.23,27,741/- claimed to have been incurred for business purposes to be deductible from rental income though deduction u/s.24(a) has been allowed and no business activities were carried out during the year." 3. The assessee is a company having the business of property developer and share traders. It also earns income from letting out of properties. In the computation of income assessee reflected the following income:- a. Income from rent Rs.35,38,360/- b. Other income(Sch-K) Rs. 86,667/- 3.1 Against the above the assessee claimed following expenses:- a. Purchase of shares Rs. NIL b. Salary, allowances etc. Rs.2,95,230 c. depreciatio....
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....tion to the possession of the property to be developed in due course. Further otherexpenses as incurred such as property maintenance expenses have been incurred for furtherance of the business activity of the assessee and hence should be fully allowance under the income Tax Act, 1961 4.4 We further submit that it is true that no income was generated from the business, activity of the assessee during the relevant assessment year. However this can not be a valid reason for disallowing the, above legitimate expenses incurred and such other fixed expenses incurred viz, salary of staff and other ongoing business expenses. All such expenses thus, incurred for protecting the business interests of the assessee company should hence be fully....
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.... assessee vide point 4.4 of letter dated 17-11-2007 (ii) The Notes on accounts given in schedule-M under point 1.05.01 states, "Revenue is recognized only when one or more units are handed over or registration made, whichever is earlier." (iii) Assessee has stated that its main activity is construction of flats and sale of land. (iv) Assessee has also stated that the expense of Rs23,27,741/- are related to its activity of trading in land and property. (v) It is found from the Balance Sheet that the head "stock in trade of landed properties" amounts to Rs 2,50,55,374/- and under the debtors, assessee has shown advance from flats and land as detailed in schedule-I (vi) Notes to the accounts given b....
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.... the facts' involved were also identical to that of the year under consideration, i.e., in that year also there was no business activity of property development by the assessee and the rental income and income from maintenance charges and the identical claim of expenses, as involved in the year under consideration has been allowed by the A.O. and no disallowance has been made therefrom. 8. The ld.CIT(A) opined that it is not the case of the revenue that the assessee has discontinued or closed down its other business activities. He noted that in the balance sheet 'stock-in-trade of landed properties' was disclosed at Rs.2,50,55,374/-. This would so that the business of the assessee has not been discontinued. Certain expenses are required ....
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....bsequent year such expenses have been allowed by the AO, the ld.DR submitted that there is no res judicate in Income-tax proceedings. He also pointed out that there is no evidence on record to show that the impugned expense is not related to development of property. As such it was observed by him that no details of such expenses have been furnished by the assessee. It was further pointed out by him, referring to the departmental paper book page-7, that advance received against booking of flat under construction and advance received against sale of land, EMBP has not been shown as receipts. Thus, expenses relatable to the same has to be capitalized as work in progress. Referring to departmental paper book page15- it was pointed out by him th....