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TMI Blog2019 (1) TMI 988X X X X Extracts X X X X X X X X Extracts X X X X ..... , we have no option but to remit the matter back to the file of AO for proper appreciation of the facts and re-adjudication as per law. It is made clear that income from office premises shall be assessed as per the statutory provisions depending upon the fact that whether the same is assessed as Income from House Property or as Business Income. The dividend income of ₹ 0.47 Lacs has been claimed as exempt, against which, disallowance u/s 14A, if deemed fit as per circumstances, may be computed. The liabilities not payable, prima-facie, seems to be of the nature covered by Section 41(1) and therefore assessable as Business Income. The interest on tax refund shall be assessable as Income from Other Sources. Whatever stand is adopted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the carry forward of the Business loss as claimed of ₹ 31,26,440/- 2) The learned Commissioner of Income Tax (Appeals) erred in confirming the erroneous conclusion arrived at by the Assessing Office that the expenses claimed by Your Petitioner were not allowable as business expenses since no business activity was carried out and the only activity according to them was earning rental income from house property. 3) Your Petitioner confirms that, there was no rental income earned and the expenses incurred including depreciation were business expenses. 4) Your Petitioner further prays that provisions of section 14A r.w.r 8D are not applicable. 5) Your Petitioner prays that the disallowances of business expenditure of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es not payable out of which dividend of ₹ 0.47 Lacs was claimed as exempt. In this manner, Business Loss was computed by the assessee as ₹ 31.26 Lacs which was stated to be carried forward for set-off in subsequent years. However, the aforesaid facts led the Ld. AO to reach a conclusion that no business activity was being carried out by the assessee during impugned AY and therefore, the various expenditure claimed by the assessee under the head Business Income could not be allowed since the assessee was entitled to claim statutory deduction of 30% only against rental income. Resultantly, the receipts in the shape of dividend, interest and liabilities not payable aggregating to ₹ 0.54 Lacs were treated as Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of financial statements / material on record reveal that the assessee has received interest free security deposit of ₹ 637.52 Lacs for the usage of the premises. The Ld. AO came to the conclusion that no business activities have been carried out by the assessee during impugned AY and therefore, the expenditure including depreciation as claimed by the assessee could not be allowed. It has also been concluded that rental income / receipts were assessable under the head Income from House Property. Despite these conclusions / observation, we find that no income has been brought to tax by Ld. AO under the head income from House Property. The receipts of ₹ 0.54 Lacs as reflected by the assessee has been assessed as Income from Ot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... authorities with respect to office premises, the expenditure found necessary to maintain the corporate personality / identity shall be allowable under the head Business Income. The deductibility of other expenditure including depreciation shall be ascertained at the threshold of stand of lower authorities with respect to fact that whether the income from office premises was assessable as Business Income or Income from House Property. With these directions, the appeal stands allowed for statistical purposes. Revenue s Appeal for AY 2007-08, 2008-09 2009-10 5. The revenue is under appeal for all these years against the order of first appellate authority in holding that various expenditure was allowable to the assessee as bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ined to purchase the premises and hence business expenditure allowable to the assessee. Aggrieved by the aforesaid conclusions, the revenue is in further appeal before us. 7. Since, we have restored the matter for AY 2006-07 to the file of Ld. AO for re-adjudication with certain directions, with a view to maintain consistency, the matter for this year also stands remitted back to the file of Ld. AO for fresh adjudication on similar lines. Needless to add that a consistent view shall be adopted by the revenue to frame the assessment for this year also. The appeal stands allowed for statistical purposes. 8. The revenue s appeal for AY 2007-08 2008-09 raises identical worded grounds of appeal. For AY 2007-08, the first appellate author ..... X X X X Extracts X X X X X X X X Extracts X X X X
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