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TMI Blog2018 (1) TMI 87X X X X Extracts X X X X X X X X Extracts X X X X ..... re not justified in treating the impugned receipts under the head income from other sources. Treatment of consequential expenses - allowability - Held that: - the income received from the business centre has to be treated as business income in pursuance of the adjudication and the fact that the expenditures have nexus with the business income, the expenditures claimed by the assessee have also to be allowed as business expenditure. Appeal dismissed - decided against Revenue. - ITA No. 464/Mum/2016 - - - Dated:- 29-12-2017 - SRI MAHAVIR SINGH, JM AND SRI RAJESH KUMAR, AM For The Assessee : Jitendra Singh, AR For The Revenue : Pooja Swaroop, DR ORDER PER MAHAVIR SINGH, JM: This appeal by the Revenue is a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs for AY 2009-10 allowed the claim of the assessee and treated the receipts from business services center as business income being receipts of subletting of factory premises and also consequential expenses by observing in Para 5.3 and 5.4 as under: - 5.3 I have considered assessment order, Ground of Appeal, Written Submissions and the argument of the Appellant's Representative. I find that the issue involved in the present appeal is identical to the issue involved in the assessment year 2009-10. The Hon'ble Appellate Tribunal vide order in Income- Tax Act No.2166 6083/M/2013 and 2010 dated 06.06.2014 has allowed the claim of the Appellant and directed the A.O. to treat the Business Service Center receipt as 'Business Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness income and taxed accordingly. The perusal of the memorandum and articles of the association of the company available in the paper book indicates that there are 21 activities stated therein which carry equal status and cannot be distinguished into main activity and sub-ordinate activity. Paragraphs 5, 10 and 12 of the memorandum and articles of the association permits the assessee to carry out the activity to generate income from lease premises. The perusal of the relevant records and the chart filed by the assessee during the course of the hearing reveals that from year 1989 to 2007, Government of India occupied about 10,000 sq. ft. and thereafter the assessee has set up the business service centre and provided services and facilities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o mention that the assessee has not been provided opportunity to controvert the report and hence has no evidentiary value. In this connection, it is relevant to state that the High Court of Gujarat in the case of ACIT Vs. Saptarshi Services Ltd. (2004) 265 ITR 379 (Guj), the case where the assessee has taken property on lease with an idea of building a business centre thereon and to give different portions thereof on rent to third parties, it has been held that the income receipts from said activity has to be treated as income from business and profession as claimed by the assessee. The High Court of Delhi in the case of CIT Vs. Neo poly Pack P. Ltd. (2000) 245 ITR 492 (Del) has held that in the absence of any single distinguishing feature ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of ₹ 60,561/-, bank charges of Rs,16,560/-, compensation of ₹ 1,32,000/-licence fees of ₹ 1305/-, rent paid of ₹ 71,078/-. In the assessment framed, the AO disallowed the said expenditures on the reason that the interest of ₹ 8,14,903/-, depreciation of ₹ 60,561/- claimed by the assessee are not attributable for earning the rental income and the bank charges of Rs,16,560/-, compensation of ₹ 1,32,000/-licence fees of ₹ 1305/-, rent paid of ₹ 71,078/- are not incurred for the purpose of earning the business income and hence the same could not be allowed under the head for the purpose of calculation. For the AY 2009-10, the assessee had claimed the expenses relating to legal charges amou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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