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TMI Blog2016 (1) TMI 534X X X X Extracts X X X X X X X X Extracts X X X X ..... cided in favour of assessee Disallowance on account of interest on O.D. account - Held that:- The assessee claimed deduction of interest on over draft account stated to have been utilized for purchase of the furniture and fixtures and repairs and maintenance of the building which was let out on rent. The Learned AR submitted that the AO did not allow a reasonable opportunity to adduce necessary evidence and requested that one more opportunity be given to the assessee for filing necessary evidence in this regard. It is noticed that it is a case of payment of interest to bank and hence the genuineness of payment of such interest cannot be denied. The only thing which remains is to link such interest with the purpose of loan. Agreeing with the contention, we set aside the impugned order on this score and send the matter to the Assessing Officer for examining this issue afresh in the light of the evidence which the assessee proposes to adduce in support of the claim of deduction of interest.- Decided in favour of assessee for statistical purposes. Disallowance on account of interest on bank loan - Held that:- Here again, the assessee could not file evidence of spending the loan a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the payment of service tax is deductible in the computation of income. The authorities below have considered only the receipt aspect of the rent at ₹ 2.66 crore inclusive of service tax but have not allowed any deduction for service tax claimed to have been paid by the assessee before the due date. Under such circumstances, we hold that the gross rental income is chargeable at ₹ 2.66 crore but the assessee is also eligible for deduction of ₹ 0.14 crore towards payment of service tax.- Decided in favour of assessee Disallowance on account of brokerage charges - Held that:- As AR argued that such brokerage charges were paid to commission agents for procuring tenants of the building and this brokerage was paid at the rate of 40 days’ rental value. He submitted that the assessee could not file evidence for the payment of such brokerage because of inadequate opportunity provided by the Assessing Officer. In our considered opinion, the ends of justice would meet adequately if the impugned order on this issue is set aside and matter is sent back to the Assessing Officer for a fresh determination - Decided in favour of assessee for statistical purposes. - ITA No.3310/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion of charging such amount as Income from other sources . We, therefore, overturn the impugned order on this score and order for deletion of this addition. 6. Ground No.4 is against the confirmation of disallowance of ₹ 86,828/- on account of interest on O.D. account. The Assessing Officer disallowed interest for the reason that no evidence was filed in this regard. The learned CIT(A) countenanced the view taken by the Assessing Officer. 7. Having heard the rival submissions and perused relevant material on record, we observe that the assessee claimed deduction of interest amounting to ₹ 86,828/- on over draft account stated to have been utilized for purchase of the furniture and fixtures and repairs and maintenance of the building which was let out on rent. The Learned AR submitted that the AO did not allow a reasonable opportunity to adduce necessary evidence and requested that one more opportunity be given to the assessee for filing necessary evidence in this regard. It is noticed that it is a case of payment of interest to bank and hence the genuineness of payment of such interest cannot be denied. The only thing which remains is to link such interest with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the assessee has not been denied by the AO. The dispute is only whether it is a capital or a revenue expenditure. We do not find any qualitative difference between interest and processing fee on loan. In our considered opinion, such processing fee cannot be capitalized and is deductible in the same manner in which the interest is deductible. We, therefore, set aside the impugned order on this issue also and send the matter to the file of the AO to consider the deductibility of such amount on the same line as that of the interest. 13. In the result, the appeal is partly allowed. AY 2008-09:- 14. Ground No.1 is general which does not require any adjudication. 15. Ground No.2 treating the rental income as Rs.Income from other sources instead of Income from house property as claimed by the assessee was not pressed by the learned AR. The same is, therefore, dismissed. 16. Ground No.3 is against the computation of rental income at ₹ 2,66,18,256/- instead of ₹ 2,52,82,066/-, ignoring the fact that the rent received by the assessee was inclusive of service tax. The facts apropos this issue are that the assessee declared rent received at ₹ 2.52 crore. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Ground No.6 about disallowance of sum of ₹ 60,000/- on account of Professional charges is similar to ground No.6 of the assessee s appeal for the assessment year 2007-08 decided in the foregoing paragraphs of this order. Following the same, we set aside the impugned order on this score and remit the matter to the Assessing Officer with a direction to allow adequate opportunity to the assessee for producing necessary evidence in support of this payment. 21. Ground No.7 is against confirmation of disallowance of ₹ 14,04,048/- on account of brokerage charges. The assessee claimed deduction for this amount as brokerage charges paid. In the absence of any details, the Assessing Officer made disallowance, which came to be upheld in the first appeal. 22. The Learned AR argued that such brokerage charges were paid to commission agents for procuring tenants of the building and this brokerage was paid at the rate of 40 days rental value. He submitted that the assessee could not file evidence for the payment of such brokerage because of inadequate opportunity provided by the Assessing Officer. In our considered opinion, the ends of justice would meet adequately if the imp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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