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TMI Blog2016 (5) TMI 587X X X X Extracts X X X X X X X X Extracts X X X X ..... income filed with the revised return of income. The assessment was concluded under section 143(3) of the Act vide order dated 09.12.2011 wherein the income was assessed at Rs. 76,69,068/- wherein the income from house property and income from other sources were accepted as returned. However, the loss from business as claimed by the assessee at Rs. 26,18,100/- was disallowed which included Rs. 19,11,600/- expenses claimed against business income. 2.2 Aggrieved by the order of assessment dated 09.12.2011 for A.Y. 2009-10, the assessee preferred an appeal before the CIT(A)-6, Mumbai who disposed off the appeal vide the impugned order dated 11.03.2013 allowing the assessee partial relief. 3. Aggrieved by the order of the CIT(A)-6, Mumbai dated 11.03.2013 for A.Y. 2009-10, the assessee had preferred this appeal raising the following grounds: - "Ground 1: Treatment of business income 1. The learned Commissioner of Income-tax (Appeals)-6, Mumbai ["the CIT(A)"] erred in confirming the action of Assessing Officer ("AO") in not allowing the loss from business as claimed by the appellant. 2. The learned CIT(A) erred in holding that the employees of the appellant actually work for pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The learned A.R. for the assessee drew the attention of the Bench to a copy of the Audit Report of the assessee-company in Form 3CD placed at pages 68 to 80 of the paper book and particularly at page 68 to claim that the assessee was in the business of 'realty and rendering of professional services'. The learned A.R. for the assessee also referred to pages 60 and 65 of the paper book in an effort to show that the assessee had earned Rs. 26,45,091/- from rendering of services to its holding company Forbs & Company Ltd. and also to the computation of income for A.Y. 2009-10 filed with the revised return of income. It was contended that their six employees who worked for M/s. Forbs & Company Ltd. had rendered professional services for which they were reimbursed and this constituted business activity of the assessee carried out in the year under consideration and therefore the business losses claimed by the assessee ought to be allowed. It was lastly mentioned that except for this year no such disallowance has been made by the AO in the earlier or subsequent years. 4.2 Per contra, the learned D.R. for Revenue strongly supported the orders of the authorities below submitting that all ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee on paper but actually work for the parent company, Forbs & Company Ltd., who pays their salary in the form of reimbursement thereof through the assessee. There is admittedly no agreement between the assessee and its parent company, Forbs & Company Ltd. for the provision of professional services and the remuneration/charges payable thereof. We concur with the observation of the learned CIT(A) that the assessee's submission that it recovers professional fees 'on the basis of estimate done at the beginning of the year' establishes that the entire arrangement between them was made to claim expenses which were otherwise not allowable under the head income from house property and interest income. The submissions that there has been no disallowance of such business loss in the earlier and subsequent years by the Department holds no water, since in the earlier years, the assessee was carrying on business as shipping agent, which business has since been merged with its parent company. In subsequent years, the learned A.R. for the assessee admitted that there were agreements between the assessee and its parent company for carrying on business on which we decline to comment as tho ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth the parties and perused and carefully considered the material on record, including the submission made before the authorities below, before us and details filed in the assessee's paper book. In paras 4.3.1 and 4.3.2 of this order (supra), we have upheld the factual findings of the learned CIT(A) that the assessee did not carry out any business activity in the year under consideration and therefore disallowed the assessee's claim of business loss. In this view of the matter, the assessee had income from only two activities/sources, i.e. earns 'income from house property' given on rent and 'interest income'. The authorities below have also observed that the assessee had already availed deduction of Rs. 26,96,445/- which covered all those expenses the assessee required for day to day maintenance of the assessee company, like statutory obligations of filing fees, audit, etc. The assessee has, in our view, failed to controvert the above factual findings by the authorities below. We find that the expenses which are allowable under its two income heads 'income from house property' and 'income from other sources', have already been allowed and we therefore, uphold the decision of the l ..... X X X X Extracts X X X X X X X X Extracts X X X X
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