9911796707
TMI Blog2017 (4) TMI 912X X X X Extracts X X X X X X X X Extracts X X X X ..... the business of manufacturing and exporting of carpet and dhurries. For the assessment year under consideration, the assessee filed its return of income on 30.09.2011, declaring loss of Rs. 25,99,955/-. During the assessment proceedings, the AO noticed that, though, in the return of income, assessee has shown rental income of Rs. 89,08,860/-, however, as per the AIR data, the actual rental income received by the assessee was Rs. 1,22,71,070/- He, therefore, called upon the assessee to explain why the differential amount should not be added to the income of the assessee. In reply, though, it was submitted by the assessee that the rental income declared in the return of income is the actual amount received by the assessee, however, the AO rej ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d to the income actually received by the assessee for the year under consideration. He also submitted that the licensee did not deduct tax at source on the service tax amount, which was only deducted in the impugned assessment year, as a result of which the difference arose. To substantiate such fact, the learned AR drew our attention to the reconciliation statement submitted at page 38 of the paper-book as well as copy of Form 26AS at page 36 of the paper book. The learned AR, therefore, submitted the quantum of income corresponding to the TDS having already been declared by the assessee in the earlier assessment year, no further addition can be made in the impugned assessment year on account of difference in rental income. 6. The learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax as well as amenities amount paid to the assessee in the earlier assessment years. Thus, from the aforesaid material placed on record, we are satisfied that in reality there is no difference in rental income claimed to have been received by the assessee as per the return of income and as attempted to be made out by the department on the basis of the TDS amount shown in Form 26AS. Accordingly, we delete the addition of Rs. 33,62,157/-. Grounds raised by the assessee are allowed. 8. ITA 2518/Mum/2015 The solitary issue raised by the department relates to allowance of assessee's claim of expenses of Rs. 88,40,658/-. Briefly, the facts are during the assessment proceedings, it was noticed by the AO that the assessee has shown sales of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee's claim of expenditure. 9. The learned DR relying on the observations of the AO submitted, as per assessee's own admission, it has stopped its manufacturing activity and is selling the stock available with it. Therefore, as such, the assessee is not carrying on its regular business activity. That being the case, there is no need for the assessee to incur any expenditure for its business activities. 10. The learned AR, on the other hand, submitted that though the assessee might have stopped its manufacturing operation due to compelling circumstances like labour problem, unpaid debtors and lack of working capital however, it is carrying on its trading activities with the hope that manufacturing activity would get revived some time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ount. As far as interest expenditure is concerned, when there is no dispute that the assessee is maintaining its establishment to carry on its trading activity it requires capital to run such activity as it has to incur day to day expenditure as well as other regular business expenditure. It is evident the AO has not raised any doubt with regard to the genuineness of the expenditure apart from making general observations. Thus, considering the overall facts and circumstances of the case, we agree with the CIT(A) that expenditure claimed by the assessee is allowable. Accordingly, we uphold the order of the CIT(A) on this issue. In the result, the grounds raised by the department are dismissed. 12. In the result, assessee's appeal is allowed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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