9911796707
TMI Blog2017 (7) TMI 1000X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment years under consideration also, the same stand to be taken. Appeals of the assessee allowed for statistical purposes. X X X X Extracts X X X X X X X X Extracts X X X X ..... of any business or profession carried on by the assessee, the profit of which are chargeable to Income Tax, shall be chargeable to tax under the head income from house property. Therefore, the rental income received by the assessee company is chargeable to tax under the head income from house property and is taxed accordingly. 4. From the computation of income filed by the assessee, it is seen that the assessee company has also claimed depreciation in respect of the building, office equipment and furniture and fixtures conjointly giving rise to the rental income. Under the provision of section 24 of the Income Tax Act, the only deduction allowable in computing the income chargeable to tax under the head income from house property is 30% of the annual value provided under clause (a) of the said section. Since, no other deduction is allowable, claim of depreciation made by the assessee is not allowable and is accordingly disallowed. With the above remarks, the income of the assessee company is computed as under:- Income as per return Less: (-) Rs.1961190/- Rental income (to be considered separately) Rs.632000/- (-) Rs.2593190/- Add : Deprecation (-) ₹ 2559084/- Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... om the scheme of the said provision which as noticed above is essentially in context of search and/or requisition. Kusum Gupta Vs DCIT, ITA Nos. 4873/Del/2009, (2005-06) 2510 (A.Y. 2003-04), 3312 (A.Y. 2004-05) 2833/Del/2011 (A.Y. 2006-07) 15. Since there is no change on this material fact that during all these assessment years no incriminating material was recovered or statement was recorded during the course of search suggesting non-genuineness of the claimed gifts or expenses etc. and no such addition/'disallowance was made in the original assessment which remained unabated, we following the decision on the issue hereinabove in the appeal preferred by the revenue for A. Y. 2002-03, hold that such addition/disallowance cannot be made m the assessment framed u/s 153A of the Act in these A.Ys in appeals. In result the issue is decided in favour of the assessee and against the revenue. In view of this finding the remaining grounds questioning the merits of additions/disallowances do not need adjudication as they have become infructuous and academic only. Consequently appeals preferred by the assessee for the A.Y. 2003-04, 2004-05, 2005-06 and 2006-07 are dismissed. &quo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the appellant is that the entire depreciation of ₹ 22,58,435/- is not in respect of property which has been let out as it would be evident from details of depreciation. Therefore, even if rental income is assessed as income from house property, though contested, such disallowance cannot exceed the amount of deprecation referable to the let out building. Without prejudice to above, it is submitted that appellant is in the business of real estate and the impugned rent is from letting out building, furniture and fixture, plant and machinery and equipment. Therefore, in view of the following judicial decisions, such income would be taxable under the head business only. Reliance is placed on the following judicial decision. Depreciation conditions precedent for grant-Ownership of asset and user for purposes of business- No requirement of usage of asset by himself-I.C.D.S Ltd. vs. CIT 350 ITR 527(SC)." All the written submission is similar for all Assessment Years." 6. The ld CIT(A) after considering the submission of the assessee confirmed the action of the AO by observing in para 4.3 of the impugned order as under:- I have considered the assessment order, writ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... argued that such income should be assessed under business head only. He relied upon the decision of Hon'ble Supreme Court in case of I.C.D.S. Ltd. Vs. CIT 350 ITR 527 (SC), that for granting depreciation there is no requirement of usage of asset by assessee himself. I have considered the arguments of Ld. AR. I agree in principle with the arguments of Ld. AR that disallowance of depreciation should be restricted to the depreciation as the property from which the rent is received. In the assessment order, details of property rented has not been discussed. Therefore. I direct the Ld. Assessing Officer to verify the claim of the appellant and restrict the disallowance of depreciation to the extent of the depreciation claimed on the properties which have rented out. This ground of appeal is partly allowed. I do not agree with the second argument of the Ld. Assessing Officer that the depreication is allowable as the appellant is in the business of real estate and rent is from building etc. It is established law that the rental income from the property is to be assessed under the head 'Income from House Property". In this regard, rely on the decision of hon'able jurisdi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er, written submissions, case laws relied upon and oral arguments of Ld. AR. The objections/arguments of the appellant, are discussed as under:- (i) In the return of income, the assessee has shown lease rent of ₹ 8,71,719/-, which has been received/earned on giving the furnished office premises on rent. For this purpose, the assessee has entered into a lease deed on 20.02.2010 with M/s, Dharampal Satyapal Ltd. for monthly rent of ₹ 72,000/-. (ii) It has been submitted by the appellant that in lieu of" monthly rent, they have provided not only the office space, but also the furniture and fixtures, office equipment and other ancillary services. Therefore, it is claimed that it is not a case of simple rent but the building owned by the appellant, has been commercially exploited. (iii) It has also been submitted by the appellant that in A.Y. 2010-11 & A.Y. 2011-12, they have shown the lease rent in the returns of income and the A.O. has not accepted. Therefore, the A.O. determined the lease rental under the head house property as against income from business. However, the arguments of the appellant did not find favour with the A.O. as well as before Ld. CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
