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TMI Blog2016 (9) TMI 641X X X X Extracts X X X X X X X X Extracts X X X X ..... House Property”. - I.T.A. No.5130/Mum/2013, I.T.A. No. 5257/Mum/2013 - - - Dated:- 4-8-2016 - SHRI SHAILENDRA KUMAR YADAV, JM AND SHRI RAJESH KUMAR, AM For The Assessee : Shri Venkatraman For The Revenue : Shri J Saravaran ORDER PER RAJESH KUMAR, A. M: The cross-appeals are filed by the respective parties against the order passed by the ld.CIT(A)-7, Mumbai dated 25.3.2013 for the assessment year 2007-08. Since these appeals pertain to the same assessee and are being decided by this common order for the sake of convenience and brevity. 2. Now first we shall take up the appeal bearing ITA No.5130/M/13. The issue raised in the grounds of appeal is against the confirmation and upholding the view of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 15,15,71,514/- and the assessee s borrowed funds to the extent of ₹ 9,35,00,000/- from its holding company which at the end of the year stood at ₹ 9,79,39,292/-. During the year the assessee s profit and loss account showed loss of ₹ 1,15,63,115/-. The assessee claimed interest liability of ₹ 85,15,655/- in the profit and loss account besides the claiming that expenses including depreciation to the extent of ₹ 30,47,420/- while there were no revenues /receipts in the profit and loss account. The assessee thereafter showed NIL income under the head Gains/Profit by adding the expenditure in the profit and loss account and calculated the income from property at (-8515,655) by stating that the sum for w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ectricity or water connection, therefore, the property could not reasonably be expected to be let out. The appellant is now contesting that the property is to be treated as income from rentals and the annual value of the property may be considered as nil. Therefore, these need to be allowed against 'Income from house property'. The appellant, is therefore, contesting that despite the objections, the income is to be treated as 'Income from house property'. However, the appellant had itself stated that it is income from business and not income from house property. Without prejudice to the foregoing, even if the contention of the appellant is accepted which is not acceptable, the property cannot be said to be lettable as the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the other hand, the ld. DR strongly objected to the arguments of the ld. AR and submitted that in the assessee s case, the rent received was treated as income from house property but in fact, the rent received by the assessee as income from business or profession and hence, the order passed by the ld.CIT(A) be uphold and the appeal of the assessee be dismissed. In support of his contention, the ld. DR placed reliance on the following case law: a) Civil Appeal No.4494 of 2004 in M/s Chennai Properties and Investments ltd V/s CIT order dated 9.4.2015 (2015 ITR (373) ITR 673 (SC) 6. We have heard the rival contentions and perused the material placed before us including the orders of authorities below and judicial decisions relied upon b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uoted any decision to the contrary. In view of these decisions, the observation of the ld. CIT(A) that the assessee had itself stated that the income was from business and not from house property is of no consequence at all. It is for the taxing authority to decide such issues correctly and the claim of the assessee, either way, is not decided. Also, it is not of any detriment to the assessee that as observed by the ld. CIT(A), while acquiring the property, only occupation certificate was received by the assessee and electricity or water connection, inter alia, having been applied for, the property was not rendered lettable. This is also in view of the fact that in its meeting on 15-7-2007, the Board of Directors of the assessee company res ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing aside the order of ld.CIT(A) and direct the AO to treat the income of the assessee as Income From House Property . Appeal filed by the assessee is allowed. 9. Now, we shall take up the appeal of the revenue being ITA No.5257/Mum/2013 10. Ground of appeal raised by the revenue is as under : 1. On the facts and in the circumstances of the case and in law, the ld. CIT(A) erred in allowing carry forward of losses u/s 71B of the IT Act without appreciating the fact the ld.CIT(A) himself has confirmed the expenses as Pre-operative expenses and such expense can be claimed u/s 35D of the IT Act only . 11. We find that the income in question is treated as income from house property. The ld. CIT(A) while deciding the issue of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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