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TMI Blog2014 (8) TMI 392X X X X Extracts X X X X X X X X Extracts X X X X ..... the rental income from the house property claimed u/s 71 of the Act – there is no reason to interfere with the order of the Tribunal – Decided against Assessee. - Tax Appeal No. 639 of 2014 - - - Dated:- 21-7-2014 - M. R. Shah And K. J. Thaker,JJ. For the Appellant : Mr. Tej Shah JUDGMENT (Per : Honourable Mr. Justice M. R. Shah) 1.0. Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal (hereinafter referred to as the Tribunal ) dated 31.07.2013 passed in ITA No.2536/AHD/2012 for AY 2009-10, the assessee has preferred the present Tax Appeal with the following proposed question of law. A. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in upholding the order of the lower authorities in not allowing set off of business loss against income from house property as provided under Section 70 of the Act? B. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was right in law in passing an unreasonable order devoid of any cogent reasons for rejection? 2.0. That the assessee filed return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r as well as learned CIT(A). 2.3. Feeling aggrieved and dissatisfied with the impugned order passed by the learned ITAT, the assessee has preferred present Tax Appeal with the aforesaid proposed questions of law. 3.0. Shri Tej Shah, learned advocate for the appellant assessee has vehemently submitted that the Assessing Officer has materially erred in considering ₹ 8,71,279/as business expenditure and set off claim by the assessee from the income received from the house property. It is submitted that as such the assessee claimed the business loss of ₹ 8,71,279/as set off from the income received from the house property as provided under Section 71 of the Act. It is submitted that therefore, the AO has materially erred in not properly appreciating the scope of ambit of Section 71 of the Act. 3.1. It is submitted that as such the assessee notify the claim the business expenditure of ₹ 8,71,279/as set off against the income from house property under Section 71 of the Act. It is submitted that what was claimed by the assessee was the business loss of ₹ 8,71,279/from the income of the house property as provided under Section 71 of the Act. It is submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness loss of ₹ 8,71,279/and claimed set off of the said business loss from the rental income from the house property. On appreciation of evidence and considering the factual aspect all the authorities below have not accepted the claim of the assessee that it had incurred expenditure of ₹ 8,71,279/while doing the business and consequently there was business loss to the extent of ₹ 8,71,279/and therefore, did not allow set off claimed by the assessee from the rental income received from the house property. The aforesaid is discussed in detail by the learned CIT(A) in para 3.2 to 3.2.5, which reads as under: 3.2. I have considered the appellant's submissions and A.O.'s observation. On perusal of the lease agreement between the appellant and Rex-ton Industries Limited, it is seen that the appellant has leased out the property consisting of land and building located at Plot No.5 GIDC Por, Vadodara. The deed mentions only the land and the building and hence the machinery has not been leased out to the lessee. This is also evident from the fact that the appellant was in the business of manufacture of air conditioners, whereas the lessee has taken this premise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ad filed details of repair expenses before the A.O from which it is seen that the total expenditure claimed under the head repair maintenance (factory) is of ₹ 12,42,880/. Out of this, an amount of ₹ 55,000/has been credited to the licensee i.e. Rex-ton Industries Ltd. as a journal entry on 1.10.2008 and balance expenses have been made in cash from the period 2.4.2008 to 27.3.2009 on different dates and on each date, the amount has been shown below ₹ 20,000/. As already stated above, the repairs and maintenance was the responsibility of the licensee after 1.4.2008 and hence the expenses shown as repair expenses by the appellant has not been incurred for the purpose of this factory premises. Secondly, the payment of notified area committee amounting to ₹ 1,27,254/was also related to his house property given on lease by the appellant but still the appellant is claiming this expenditure under the head of income from business and profession. Besides, the appellant has also claimed traveling and conveyance expenses of ₹ 78,300/which had been disallowed by itself in the computation of income. Except for these expenses, the other expenses mostly consist of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... act that the appellant is not carrying on any business activity, the expenses debited in the P L account relating to director's remuneration, salary wages, rent etc. have been incurred fro the purpose of earning of house property income. Hence, the appellant's claim that all these expenses should be set off against the house property income is not acceptable as it will amount to allowing double deduction to the appellant, i.e. one in the form of standard deduction and another in the form of actual deduction from the income from house property. 4.1. The aforesaid has been confirmed by the learned ITAT. In the facts and circumstances of the case, we are in complete agreement with the view taken by the learned CIT(A) confirmed by the learned Tribunal. There is no error committed by the learned Assessing Officer or learned CIT(A) or learned Tribunal in disallowing the claim of set off claimed by the assessee of ₹ 8,71,279/from the rental income from the house property claimed under Section 71 of the Act. 5.0. Now, so far as contention on behalf of the appellant assessee that learned Tribunal has not dealt with the decision of the Coordinate Bench of the Tribuna ..... X X X X Extracts X X X X X X X X Extracts X X X X
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