9911796707
TMI Blog2018 (12) TMI 118X X X X Extracts X X X X X X X X Extracts X X X X ..... sallowance of proportionate depreciation allowance and insurance expenses - Held that:- As observed that the assessee admittedly earned rental income of ₹ 1,25,000/-, which was accepted during the course of survey. In that view of the matter, inclusion of ₹ 10,50,000/- as income from house property, cannot be faulted with. Disallowance of expenses - Held that:- The assessee has placed on record a chart showing the use of its office premises by Phinix Shelter Pvt. Ltd., other group entities and self. This chart indicates that the assessee used only 30% of the office premises for its business purpose and remaining 70% was used by Phinix Shelter Pvt. Ltd. and other related entities. Section 38(2) of the Act provides that where a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es out of the order passed by the CIT(A)-7, Pune on 23-06-2016 in relation to the Assessment Year 2010-11. 2. The first ground is against the confirmation of addition to the tune of ₹ 79,25,442/- on the basis of 12% profit element in the closing work in progress. 3. Briefly stated, the facts of the case, are that the assessee is a Builder, Promoter and Developer. A survey action was undertaken u/s.133A of the Acton 17-03-2010, in which the assessee offered a sum of ₹ 1.00 crore as income over and above the regular income. However, return was filed declaring total income of ₹ 61,09,336/-. On being called upon to explain as to why the income offered during the course of survey was not declared, the assessee submitted s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ately if the impugned order on this score is set-aside and the matter is restored to the file of AO. We order accordingly and direct him to verify the assessee s details and seek any other further details, if required, for enabling him to complete the assessment in right perspective. Needless to say, the assessee will be allowed a reasonable opportunity of hearing. 5. Ground Nos. 2, 3 and 4 are against the confirmation of addition of ₹ 10,50,000/- on account of rental income and disallowance of proportionate depreciation allowance and insurance expenses. 6. The facts concerning this issue are that the survey transpired about the assessee s business premises being occupied by other sister concerns as well. Rental income shown ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and self. This chart indicates that the assessee used only 30% of the office premises for its business purpose and remaining 70% was used by Phinix Shelter Pvt. Ltd. and other related entities. Section 38(2) of the Act provides that where any building etc. is not exclusively used for the purpose of business, the deductions under relevant clauses of sections 30, 31 and 32 shall be proportionately reduced. Once it is found as an admitted position that the assessee was using only 30% of the premises, it is but natural that the disallowance in respect of depreciation and other expenses to the extent of 70%, being, relatable to the part not used by the assessee exclusively for its business purposes, cannot be faulted with. We, therefore, app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... end stood at ₹ 5 lakh along with the amount of Reserves and Surplus at ₹ 57.42, thereby giving closing balance of share capital and Reserves and Surplus at ₹ 62.01 lakh. 11. Section 36(1)(iii) provides for deduction of interest paid in respect of capital borrowed for the purpose of business or profession. The essence of this provision is that the interest should be allowed so long as the capital borrowed, on which such interest is paid, is used for the purpose of business or profession. If, however, an assessee is having its own interest free surplus funds and such funds are utilised as interest free advances even for a non-business purpose, there cannot be any disallowance of interest paid on interest bearing loans. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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