9911796707
TMI Blog2015 (8) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... , it is settled law that form and substance of the transaction, and not the nomenclature assigned to it, determine the nature of the income . Accordingly, the appellant is eligible to claim standard deduction U/s 24 of the Act from the same and the disallowance so made is deleted - Decided in favour of assessee. Addition of litigation fees paid to some law firms - CIT(A) deleted addition - Held that:- CIT(A) following the Tribunal’s order in assessee’s own case for AY 2007-08 allowed the assessee’s claim as no expenses pertaining to personal litigation or other litigation of the directors were debited in the books of .account of the assessee. If directors were carrying any litigation in: their personal capacity, those expenses were separately debited in the personal account of the partners and not claimed by the assessee company. In the light of categorical finding of ld. CIT (A), in our opinion, it was for the revenue authorities to show from the detail of expenses 'that expenses disallowed related to criminal' proceedings against directors. or were otherwise 'inadmissible and were wrongly claimed by the assessee company.' This has . not been shown, Therefore, on facts and circums ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances of the case, the Ld. CIT(A) has erred in holding that the disallowance made by the AO at ₹ 79,41,516/- being 30% deduction for repair u/s 24 on rental income rece4ived by the assessee was service charges and not rental income. 2. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 2,64,72,720/- considered by the AO as income from other sources instead of rental income. 3. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 14,33,347/- out of litigation fees paid to some law firms by holding the same as not incurred for business purposes. 4. On the facts and circumstances of the case, the Ld. CIT(A) has erred in deleting the addition of ₹ 99,31,096/- towards depreciation on the basis of a finding given in the block assessment order." 3. Brief facts apropos ground nos. 1 & 2 are that assessee had credited in its P&L A/c sub-license fee and services charges of ₹ 7,43,56,245/-. The AO noticed that assessee had reduced its receipts from business income and declared it under the head "Income from house property". He observed that details were ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opinion that though two agreements had been made for sublicense fee i.e rent and service charges separately, yet the fact remains that no services of any kind were provided by the appellant to Mitsui Co. To compound the issue, the AO has also failed to bring on record the fact, whether any expenses in respect of the services allegedly provided to Mitsui & Co., were claimed by the appellant. In view of the above, I am of the opinion that no services were actually provided by the appellant, and factually the so called service charges were nothing but rent received by it. Further, it is settled law that form and substance of the transaction, and not the nomenclature assigned to it, determine the nature of the income . Accordingly, the appellant is eligible to claim standard deduction U/s 24 of the Act from the same and the disallowance of ₹ 54,39,600/- so made is deleted." 3.3. We have heard rival submissions. The order of the ld. CIT(A) on the issue in question being in conformity with the orders of the ITAT for earlier years and there being no change in facts and circumstances, we see no reason to interfere in the order of ld. CIT(A) on the issue in question. Ground nos ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ircumstances, we see no reason to interfere in the order of ld. CIT(A) on the issue in question. Ground no. 3 is dismissed. 5. Brief facts apropos ground no.4 are that the assessee claimed depreciation to the tune of ₹ 36,53,108/-. The AO observed that in assessee's case in the block assessment order u/s 158BC dated 29-11-02, this issue was considered and disallowance out of depreciation was made on the assets which were considered unexplained. This disallowance was made in subsequent assessment years by the AO. He withdrew the excessive depreciation as per calculation given in the chart enclosed as annexure 2 to the tune of ₹ 99,31,096/- and made the addition accordingly. 5.1. In appeal, the ld. CIT(A), following ITAT's order for earlier years, allowed the claim of the assessee by observing as under: "21. The revenue is aggrieved and has brought the issue in appeal before the Appellate Tribunal. During the course of hearing, a copy of order of ITA T 'D' Bench, New Delhi in ITA No. 2481Dell04 and 3981DI04 in the case of DCIT. CC-JJ Vs Sunair Hotel Ltd (assessee company) dated 2611012007 was filed before us. The order was passed in the appeal filed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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