2023 (4) TMI 1091

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.... asses and allow expenditure under the different heads whereas Hon'ble High Court in this case while denying benefit of section 11 & 12 did not detail anything about different heads of income & expenditure. The High Court had simply restored the matter to the file of AO to examine the aspect of granting allowabality of expenditure and depreciation if admissible, in accordance with law. (ii) On the facts and in the circumstances of the case, whether the Ld CIT(A) erred in directing the A.O to allow deduction under section 80G of the Act after verification though the issue of allowing 80G has not been specifically directed by the High Court. (iii) On the facts and in the circumstances of the case and in law, whether the Ld CIT(A) erred ....

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....case for non inclusion of income from charitable activities in taxable income and allowing expenditure and depreciation out of business income in view of the decision of the Hon'ble Delhi High Court vide order dated 02.12.2013, income was computed wherein gross income from lease rental and interest was considered to be business income on which admissible deductions, including depreciation, were allowed and certain inadmissible expenses disallowed and net business income was computed at Rs.2,12,67,640/-. 5. Income from charitable activities was computed separately since the assessee continued to be registered under section 12A and continued to do charitable activities. Accordingly, income from the charitable activities was considered se....

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.... the Hon'ble Delhi High Court in appellant's own case, the said income has to be taxed under the head "Income from other sources". Further, while computing income under the head "Income from other sources" any expenditure (not been in the nature of capital expenditure) laid out or expended for the purpose of making or earning such income is to be allowed as deduction as per the provisions of section 57(iii). From the details as reproduced above, it is seen that no income has been earned for some of the expenses incurred Sl. Nos. 7 to 15 of the table in para 6.2.4. Hence, expenditure incurred on these counts cannot be allowed in computing income from other sources. Further, since income from agricultural activity is exempt from tax, expendit....

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....y of the same as per the provisions of the Income Tax Act. 8. From the adjudication of the ld. CIT(E), we find that the revenue authorities have duly allowed the depreciation and other expenses as directed to be considered by the Hon'ble High Court. The revenue authorities have also allowed to set off of the business income with loss computed under the head "income from other sources" which is in tune with the provisions of the Income Tax Act. Since, exemption u/s 11 is not to be allowed as per the orders of the Hon'ble High Court, the expenditure on which is unrelated to the earning of the income only has been disallowed. 9. Hence, we decline to interfere with the order of the ld. CIT(E). The appeal of the revenue stands dismissed. 10. ....