TaxTMI 
TaxTMI 
2025 (2) TMI 1823
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....essee is a company claiming to have been deriving income from construction and letting out. For the AY 2015-16, it filed its return of income on 27/09/2015 declaring a loss of Rs. 1,21,97,736/- under normal provisions and book loss of Rs. 1,10,78,238/- u/s. 115JB of the Income Tax Act, 1961 ("the Act"). Assessment u/s. 143(3) of the Act was completed by order dated 27/12/2017 determining the income at Rs. 57,15,098/-. In that process, the learned Assessing Officer brushed aside the contention of the assessee that the assessee derived business income and held that it amounts to income from house property to the tune of Rs. 6,10,628/-. Further, learned Assessing Officer added a sum of Rs. 51,04,470/- under the head income from other sources, ....
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....y the same and preferred this appeal. 4. Coming to the addition made on account of the business receipts/Income From House Property, learned AR placed reliance on the decisions reported in the case of Rayala Corporation (P) Ltd vs. ACIT 72 Taxmann.com 149 and Chennai Properties & Investments Ltd vs. CIT 56 Taxmann.com 456 wherein it was held that when the assessee is engaged in the business of letting out of properties, then the income received by it shall be assessed under the head income from business and not under they head Income from House Property and therefore, the authorities are not justified in denying the claim of the assessee. Apart from this, learned AR submitted that in the earlier assessment years also, the assessee offere....
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....ncome from House Property. 6. On this aspect, since verification is necessary, we deem it just and proper to direct the learned Assessing Officer to verify the Memorandum/Articles of Association/relevant part of the audited annual accounts as to the clarification on the aspect of the business/profession of the assessee and if it is construction and letting out of the property then to allow the claim of the assessee. In the same process the learned Assessing Officer will also verify the stand taken by the Revenue on this aspect in earlier assessment years for the purpose of allowing the claim of the assessee. Since the depreciation depends on the view taken on this aspect, learned Assessing Officer will take note of it. 7. Insofar as t....
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....ness of the assessee. In the absence of such evidence, learned CIT(A) upheld the findings of the learned Assessing Officer and consequently dismissed the ground. 10. Learned AR contended before us that during the year the assessee gave the interest free advances to the tune of Rs. 3,36,75,97/- for wholly and exclusively business purposes and due to the commercial expediency only, but the authorities failed to appreciate the same. Apart from this, learned AR submitted that the assessee incurred certain expenses towards employee benefit, administrative expenses etc., for its day-to-day operations and therefore, it's not open for the authorities to disallow the interest expense as a whole. 11. Learned DR vehemently supported the findings....
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....were made and the relationship of the assessee with those parties for the purpose of deciding the commercial expediency, the learned Assessing Officer will keep in mind the decision of the Hon'ble Apex Court in the case of SA builders. 13. Now coming to the last issue relating to the disallowance of the carry forward losses and unabsorbed depreciation to be set off from the assessee's income for the assessment year 2015-16, the view of the authorities is that the assessee did not carry out any business activity during the year under consideration and that is the reason why the assessee is not entitled to claim the same. 14. It is the submission on behalf of the assessee that under section 139(3) of the Act, if the company has losses i....