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TMI Blog2020 (9) TMI 1239X X X X Extracts X X X X X X X X Extracts X X X X ..... cer on account of notional rent, whereas in fact the appellant has not received any rental income from these tenants. [Page 165-170 of CIT(A)'s Order] 1.2 That learned CIT(A) has grossly erred in law and on the facts in not appreciating the fact that the taxable income means real income and not a fictional income. 2. That learned CIT(A) has grossly erred in law and on the facts and in the circumstances of the appellant's case in confirming the disallowance of Rs. 86,35,131/- out of legal and professional expenses by treating them capital expenditure in nature ignoring the fact that the appellant had itself added back in its computation of total income an amount of Rs. 79,73,331/- out of Rs. 86,35,1131- and balance amount to the extent of Rs. 6,61,800/- is permissible deduction as revenue expenditure. [Page 230-239 of CIT(A)'s Order] 3. That the appellant reserves its right to assail the same on such other ground or grounds as may be advanced at the time of hearing for which the appellant craves leave to amend, vary or add to the grounds hereinbefore appearing. 03. The learned AO in ITA number 4794/del/2015 has raised following grounds of appeal. ITA No.4794/DEL/2015 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... erred in law and on the facts of the case in deleting the addition of Rs. 5,01,672/- on account of recalculation of depreciation. 14. The Commissioner of Income Tax(Appeals) has erred in law and on the facts of the case in deleting the addition of Rs. 87,65,346/- made by the AO on account of disallowance of prior period expenses. 15. The Commissioner of Income Tax(Appeals) has erred in law and on the facts of the case in deleting the addition of Rs. 6,66,91,587/- made by the AO by holding them to be in capital nature. 16. The Commissioner of Income Tax(Appeals) has erred in law and on the facts of the case in deleting the addition of Rs. 2,34,40,014/- made by AO under different heads by holding them being personal in nature. 17. The Commissioner of Income Tax(Appeals) has erred in law and on the facts of the case in deleting the addition of Rs. 45,15,42,738/- on account of disallowance of expenses for operation and maintenance of helicopter and air craft not being wholly & exclusively for business purpose. 18. The Commissioner of Income Tax(Appeals) has erred in law and on the facts of the case in deleting the addition of Rs. 257,90,00,000/- on account of notional i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee. Even otherwise he submitted that the issues are covered in favour of the assessee by the decision of the coordinate bench. He submitted that only new issue that remains to be adjudicated in this appeal is ground number 16 which relates to the disallowance of expenses on account of same not incurred only and exclusively for the business purposes and held them to be of personal nature in case of the assessee amounting to Rs. 23,440,014/- and ground number 20 wherein the disallowance out of legal and professional expenses paid to Mr. Ajay Khanna of Rs. 3 crores is concerned. He otherwise submitted that there is no other issue in the appeal of the AO which are not decided in favour of the assessee. He therefore submitted that his arguments are supporting the orders of the coordinate bench and the learned CIT-A who has allowed the claim of the assessee. 07. Coming to the appeal of the assessee the learned authorised representative submitted that ground number one with respect to the addition made by the learned assessing officer on account of notional rent whether security deposit is received but no rental income is shown wherein the learned assessing officer has made t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2006-07 and 2007-08 as Under;- "21. Coming to the issue of addition on account on notional rent where security deposits were received but no rental was shown, amounting to Rs. 10,91,270/-. It has been pointed out by both the parties that this issue now stands covered in favour of the assessee by the Tribunal in assessee's own case for the Assessment Year 2007-08 vide order dated 01.11.2017 in ITA No.3846/D/2012. 22. The addition has been made on the ground that assessee despite being owner of the Kiosks has not disclosed rental income in its books and the same has been transferred to M/s. DLF Services Ltd. by over riding title. M/s. DLF Services Ltd is providing maintenance and upkeep services of the mall including Kiosks. In return for consideration for these services, the appellant vide authority letter dated 12/12/2005 has granted M/s DLF Services Ltd., right to recover the rental receipts from the third parties using said Kiosks. Assessee has not claimed any expenditure in the name of M/s DLF Services Ltd. in connection with maintenance services of the mall. In view of above arrangement, M/s. DLF Services Ltd. is showing the receipts from the Kiosk as a par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sion of lease rent. It is further relevant to take note of the fact that such lease rent has been subjected to tax in case of M/s. DLF Services Ltd. 46. After considering the facts of the case, we are of the view that there is no justification for addition of Rs. 12,60,000/- as same was towards business obligation and for specific services rendered by M/s. DLF Services Ltd. and accordingly the impugned disallowance is directed to be deleted." 24. Thus, following the aforesaid precedence in assessee's own case, we decide this issue in favour of the assessee and the impugned addition is directed to be deleted." Therefore respectfully following the decision of the coordinate bench, ground number one of the appeal is allowed. 11. Ground number 2 of the appeal is against the confirmation of the disallowance of expenses out of legal and professional expenses by treating them as a capital expenditure amounting to Rs. 8,635,131/-. The claim of the assessee is that out of these expenses assessee itself has disallowed a sum of Rs. 7,973,331 in its return of income and balance is also of revenue nature. Identical issue has been decided by us in additional ground raised by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aph number 11 of the order Dismissed 6 Deletion of disallowance on account of net contingency deposit Decided in favour of assessee as per paragraph number 108 - 111 Decided in favour of the assessee as per paragraph number 12 Dismissed 7 Deletion of disallowance on account of net interest free security deposit Covered in favour of the assessee per paragraph number 112 - 115 Covered in favour of assessee by paragraph number 13 Dismissed 8 Deletion of disallowance of net registration charges Decided in favour of assessee by paragraph number 116 - 120 Decided in favour of assessee per paragraph number 14 Dismissed 9 Deletion of disallowance on account of non-allocation of overhead is to group companies Decided in favour of assessee by paragraph number 125 - 130 Decided by paragraph number 15 in favour of assessee Dismissed 10 Deletion of disallowance u/s 14 A Decided in favour of assessee by paragraph number 131- 132 Decided in favour of the assessee as per paragraph number 16 -18 Dismissed 11 Deletion of disallowance/reclassification of income of income from house property to income from business and profession Decided in favour of assessee as per paragr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 23,440,014. Accordingly ground number 16 of the appeal is dismissed. 15. Ground number 19 of the appeal is with respect to the addition on account of carbon credits amounting to Rs. 122,34,040/-. The assessee has submitted that this issue is squarely covered in favour of the assessee by the decision of the honourable on the per the High Court in Commissioner of income tax versus my home Power Ltd 365 ITR 82. Assessee has claimed the above sum as a capital receipt whereas the learned assessing officer has made the addition on the ground that the decision of the coordinate bench in case of my home Power Ltd dated 2 November 2012 has not been accepted by the revenue and is further challenged. Now we find that above decision has been confirmed by the honourable Andhra Pradesh High Court in [2014] 46 taxmann.com 314 (Andhra Pradesh)/[2014] 225 Taxman 8 (Andhra Pradesh)(MAG.)/[2014] 365 ITR 82 (Andhra Pradesh)/[2015] 276 CTR 92 (Andhra Pradesh wherein it has been held that:- "3. We have considered the aforesaid submission and we are unable to accept the same, as the learned Tribunal has factually found that "Carbon Credit is not an offshoot of business but an offshoot of environment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... due to his continuous ill-health he left the services and was engaged by the assessee company as a consultant on retainer basis. The assessee further claimed before the learned CIT-A that these expenses have already been allowed in the earlier years and therefore same cannot now be disallowed without any new facts coming to the knowledge of the assessing officer. The learned CIT-A following the decision of the honourable Delhi High Court in 254 ITR 377 allowed the claim of the assessee. He further held that the term commercial expediency is to be judged from the angle of the assessee/businessman. With respect to the provision of the services he also held that services have been availed by the assessee in earlier years also. Accordingly he deleted the disallowance. The learned departmental representative could not controvert the decision of the learned and CIT-A. We also find that when the expenditure has been allowed to the assessee in earlier year, no new facts are coming into the knowledge of the assessing officer which proves otherwise, the agreement supports the payment, the recipient was providing services to the company, he was also an employee of the group concern and the se ..... X X X X Extracts X X X X X X X X Extracts X X X X
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