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TMI Blog2015 (12) TMI 1741X X X X Extracts X X X X X X X X Extracts X X X X ..... sing hoarding from subletting hotel premises - ‘income from house property’ or ‘income from other sources’ - Held that:- It is noted that the assessee has credited income from hotel business in its profit and loss account and debited expenses with respect to running of hotel and maintenance of the hotel premises in the P & L account. In these facts, the income received from exploitation from the hotel premises in any manner should also be credited in the profit and loss account. The assessee has already debited the expenses with respect to maintenance of the hotel premises. It is clarified that the assessee is also eligible to claim of expenses incurred for earning the aforesaid income.Thus, keeping in view the peculiar facts of this case for the year under consideration, the aforesaid income is directed to be treated as ‘income from business’. Disallowance u/s 40(a)(ia) - Held that:- As in the case of Rajiv Kumar Agrawal vs. ACIT [2014 (6) TMI 79 - ITAT AGRA] wherein it has been held that the second proviso to section 40(a)(ia) is declaratory and curative in nature, and should be given retrospective effect from the 1st April 2005. Thus, the position of law on this issue is now ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s.40(a)(ia) of the I.T. Act amounting to ₹ 41 10,056/- by admitting additional evidence. 3.1 in ignoring the fact that the assessee himself had agreed that the TDS on said interest payment was not deducted during relevant financial year rather deducted in the next F.Y. 11-12 relevant to A.Y. 2012-13. 3.3 in not appreciating that the principle res judicata is not applicable in the income tax proceedings. 2. During the course of hearing, arguments were made by Shri Rahul Sarda, Authorised Representative (AR) on behalf of the Assessee and by Shri Vinod Kumar, Departmental Representative (DR) on behalf of the Revenue. 3. In the first ground, the Revenue has challenged the action of Ld. CIT(A) in deleting the disallowance made by the AO on account of interest cost u/s 14A of the Act. 3.1. The brief facts of the case are that during the course of assessment proceedings, the AO found that assessee had made investment in the tax free investment and assessee has incurred expenditure on account of interest, and therefore, he invoked provisions of Rule 8D and made disallowance on account of interest u/s 14A. 3.2. Being aggrieved, the assessee contested the matter b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee are more than ₹ 3.97 crores whereas investment made in tax free securities is not more than ₹ 33.65 lakhs. Thus, order of Ld. CIT(A) is factually and legally correct on this issue. We take support from the order of the jurisdictional High Court as has been relied upon by the Ld. CIT(A). It is further noted from the facts brought before us that loans were taken by the assessee in earlier years. It is informed that no disallowance was made in earlier years on account of interest. Thus, impliedly, it can be said that no borrowed funds have been used in acquiring tax-free investment during the year. It is further noted that onus is upon the AO to prove that interest bearing funds were used for earning tax free income. Reliance is placed in this regard on the judgment of Hon ble Punjab Haryana High Court in the cases of CIT vs. Hero Cycles Ltd. 323 ITR 518, CIT vs. Winsome Textiles 319 ITR 204 and CIT vs. Deepak Mittal 361 ITR 131. Thus, viewed from any angle, the disallowance made by the AO was contrary to law and facts and therefore, the same has been rightly deleted by the Ld. CIT(A). No interference is called for in the order of Ld. CIT(A), and, therefore the sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o.2 is partly allowed. 5. Ground No.3: In this ground, the Revenue has challenged the action of Ld. CIT(A) in deleting disallowance u/s 40(a)(ia) of the Act amounting to ₹ 4,10,056/- 5.1. In this regard, the brief facts are that the assessee has paid interest amounting to ₹ 4,10,056/- to various parties who were individuals, as they had submitted certificates for nil deduction of tax as per rule 15H. The AO disallowed the interest payment on the ground that assessee failed to deduct tax at sources on the said interest payments. Ld. CIT(A) has deleted this disallowance on the ground that these persons included the interest income in the return and also paid the taxes, relying, upon the judgment of Hon ble Supreme Court in the case of Hindustan Coco Cola Beverage P. Ltd. v. CIT 293 ITR 226 (SC), wherein it was held as under: Whether, where deductee, recipient of income, has already paid taxes on amount received from deductor, department once again cannot recover tax from deductor on same income by treating deductor to the assessee-indefault for shortfall in its amount of tax deducted at source-Held- yes . 5.2. It is further noted by us that this issue has ..... X X X X Extracts X X X X X X X X Extracts X X X X
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