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TMI Blog2016 (5) TMI 284X X X X Extracts X X X X X X X X Extracts X X X X ..... uliar facts and circumstances of the present case it is necessary to first address the facts which admittedly have not been properly addressed. Principally if the assessee is able to show that the expenditure claimed qua Ground no.1 pertains to it alone and not to the related concern and is incurred to keep its existence alive the expenditure on verification has to be allowed. However, if the assessee’s expenditure also includes the expenditure of the related concern then to that existent it has to be disallowed. Further the nature of work by related concern may also be an area for consideration as if the very same nature of work is done then it cannot be said to be a case of recession or lull in the business as then by conscious acts the assessee itself is parting with work in favour of a related concern. Nothing has been placed before us to show what is the nature of work entered into by the related concern i.e. the partnership firm to whom a plot of land has been leased. Thus the issues arising in Ground No.1, we deem it appropriate to restore to the AO giving liberty to the assessee to lead evidence if any in support of its claim. Qua Ground No.2, we find in the absence of any ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. 2. The relevant facts of the case are that in the year under consideration the assessee declared an income of ₹ 1,83,300/-. The assessment was concluded at an income of ₹ 9,36,000/- in the scrutiny proceedings initiated after issuance of notice u/s 143(2) and 142(1) by an order u/s 143(3). 2.1. The AO in the scrutiny proceedings took note of the fact that the returned income has been arrived at after setting off business loss of ₹ 5,72,702/- against income of ₹ 7,56,000/- declared under the head income from house property . Considering the fact that the business activity of manufacturing and job work of precision turned components had been discontinued after 31.3.2009 the claim of the assessee in setting off business loss was held to be not allowable. Consequently administrative other expenses of ₹ 4,07,461/- and depreciation of ₹ 1,65,241/- amounting to ₹ 5,72,702/- was also disallowed. 2.2 The AO also considering the fact that the rent receipts of the assessee from a specific shed measuring 20,800 sq. ft. of Village Jhadmajri, Barotiwala, Distt. Solan, Himachal Pradesh also included the rent of ₹ 7,56,000/- from ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation claimed by the assessee. 5. Qua the disallowance of ₹ 1,80,000/- the view taken by the AO was confirmed holding as under :- 5.3. I have carefully considered the appellant s submissions :- The only issue to be considered is whether the property bearing No. 343/54/1/A measuring 6070 sq. Meters situated at Village Mahalunge was a plot of land or building . The only evidence regarding the status of property under construction as per record is a copy of the lease deed filed by the appellant. Perusal of this lease deed shows that it was not mentioned that there is any building construction on the land. In clause 1 of the lease deed it is clearly mentioned as under :- The Lessor hereby agrees with the Lessee to lease the said plot of land ................. It is further seen that clause 2d of the lease deed reads as under :- The Lessee shall be allowed to make any permanent construction or alternations in the said plot as per his requirements without the previous consent of the lessor. These provisions of the lease deed clearly show that the property under construction was only a plot not a constructed building. The appellant s contention that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rded very appropriately, he was not in a position to rely on any other evidence. However it was submitted it cannot be concluded that it was only a piece of land which was leased out. 9. The Ld. Sr. DR heavily relying upon the orders of the authorities below submitted that the grounds deserve to be dismissed. Addressing the paper book filed it was his submission that when the profit and loss account and the balance sheet for the year under consideration is considered at pages 2 and 3 along with details at pages 5 and 6 which has been filed by the assessee it would be seen that the assessee continues to hold the very same inventory for years on end. Similarly there is no change in the sundry debtors of the assessee over the years. In fact the details pertaining to sundry debtors for more than 6 months would show that they continue to remain static. Accordingly it was his stand that the additions made by way of these disallowances should be sustained. 10. We have heard the rival submissions and perused the material available on record. As far as the decisions on the issue are concerned we find that there is no dispute that whenever an assessee is able to establish that the expe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Lessor. e. The Lessee will not assign, transfer, sublet or put parts of possession of any part thereof of the Land any time during the period of Lessee. f. The Lessee shall permit the Lessor or his Agent to enter and inspect the plot after due notice. (emphasis provided) 10.1. On consideration of the above, it is seen that apart from requiring the lessee to pay rent the lessee is furthered required to make payments towards electricity charges as per the meter reading and make any permanent construction and alterations. In the said plot as per its requirements the assessee as a lessor further expresses that it has no objections for inspection/verification of the bonded premises by the Central Excise and Customs officer at any time. Not only the fact that both the lessor and the lessee in regard to its Registered office function from the very same location. The lessor assessee being a Private Limited company and the lessee being a partnership firm also function from the very same premises as per the lease deed. In the peculiar facts and circumstances of the present case it is necessary to first address the facts which admittedly have not been properly a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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