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TMI Blog2023 (2) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... the head profits and gains of business or profession. Once the income has been held to be taxed under the head profits and gains of business or profession the same has to be computed as per the provision of section 28 to section 43D of the Act and to this extent also there is no infirmity in the directions of the CIT(A). Once the assessee has filed form 26A in respect of the interest payment the same has to be considered in the light of the provisions of section 201 of the Act vis a vis the applicability of the provision of section 40 (a)(ia) of the Act. Accordingly the directions of the CIT(A) are modified and the AO is directed to consider the claim of expenditure in the light of the relevant provisions of the Act after making due ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contractors. 4. The return for the year under consideration was filed on 22.12.2014 declaring income under the head income from house property on account of rent received Rs.3.64 crores on which the assessee claimed deduction of Rs.1,66,96,574/- u/s. 24(b) of the Act on account of interest paid on loan to acquire the property. However, income of the assessee is only from other sources and while computing the business profit the assessee has business expenses of Rs.2897007/- and did not claim any depreciation on the property building. 5. During the year under consideration the assessee has taken a loan of Rs.17.50 crores from Aditya Birla Finance Limited for the purpose of purchasing the property on which interest arose during the year ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the case of Chennai Properties (supra) were as follows: The taxpayer was incorporated with main objective, as stated in the memorandum of association ( MOA ), to acquire the properties in the city and to let out those properties. The taxpayer had rented out such properties and the rental income received therefrom was shown as income from business. The assessing officer took a view that the rental income received by taxpayer was to be taxed as income from house property. The Commissioner of Income-tax (Appeals) as well as the Tribunal accepted taxpayer s claim holding that amount in question was to be taxed as business income. The High Court, however, restored order passed by the Learned Assessing Officer ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ts that the company is the owner of the building which has been given on lease to Aditya Birla Retail Limited. The copy of lease agreement and the agreement for purchase of property has been enclosed as Annexure 2 to the submission. In order to substantiate the taxability of rental income under the head income from house property, the appellant submits that the following three conditions are required to assess the income from house property under the head income fromhouse property: i) That the property should consist of any building, land appurtenant hereto. ii) The assessee is the owner of such building, and iii) Such building is not occupied by the assessee for the purpose of any business or occupation. Based on the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... disputed fact is that the ratio laid down by the Hon ble Supreme Court in the case of Chennai Properties and Investments 373 ITR 673 squarely apply on the facts of the case, therefore, there is no error or infirmity in the decision of the CIT(A) wherein rental income has been taxed under the head profits and gains of business or profession. Once the income has been held to be taxed under the head profits and gains of business or profession the same has to be computed as per the provision of section 28 to section 43D of the Act and to this extent also there is no infirmity in the directions of the CIT(A). However, once the assessee has filed form 26A in respect of the interest payment of Rs.1,66,96,574/- the same has to be considered in the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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