2012 (5) TMI 641 - AT - Income Tax

Disallowance of expenditure u/s 14A Due date for payment of deposit linked insurance premium Nature of income - We are unable to appreciate the contentions of the assessee that the income should rightly be assessed under the head Income From House Property . The assessee cannot take a U turn by filing an additional ground. To decide as to whether an income has to be assessed under the head Income From Business or under the head Income From House Property , certain material facts have to be examined. The agreements, the functions of the parties, etc., have to be seen.

Summary

Issues:
1. Disallowance of expenditure under section 14A of the Income Tax Act, 1961.
2. Computation of book profit with reference to disallowance under section 14A.
3. Computing income under section 115JB of the Act.
4. Assessability of rental income under the head "Income From House Property" or under the head "Income From Business."

Issue 1 - Disallowance of Expenditure under Section 14A:
The appeal was directed against the disallowance of expenditure under section 14A of the Income Tax Act. The Tribunal decided to set aside the impugned order and restore the issue to the Assessing Officer for fresh adjudication based on the propositions laid down by the Jurisdictional High Court in a specific case. The ground was allowed for statistical purposes.

Issue 2 - Computation of Book Profit with Reference to Disallowance under Section 14A:
The Tribunal found that this issue was consequential to the first ground and, therefore, also restored it to the Assessing Officer for fresh adjudication in accordance with the law. The Revenue's appeal was allowed for statistical purposes.

Issue 3 - Computing Income under Section 115JB of the Act:
The assessee raised additional grounds related to computing income under section 115JB. The Tribunal allowed one ground concerning the payment of deposit-linked insurance premium as it was paid within the due date. However, the Tribunal dismissed the other ground related to the provision for doubtful debt under section 115JB based on legal interpretations and precedents cited by both parties.

Issue 4 - Assessability of Rental Income:
The assessee sought to admit additional grounds regarding the assessability of rental income under specific heads. The Tribunal rejected the admission of these additional grounds as the relevant facts were not adequately investigated or available on record. The Tribunal emphasized the need for a thorough examination of facts before admitting such additional grounds. Consequently, the additional grounds raised by the assessee were dismissed, and the appeal was partly allowed.

In conclusion, the Tribunal's judgment addressed various issues related to the disallowance of expenditure, computation of book profit, computing income under a specific section, and the assessability of rental income under different heads. The Tribunal made decisions based on legal interpretations, precedents, and the availability of relevant facts on record, ensuring a comprehensive and detailed analysis for each issue involved.