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2020 (9) TMI 955 - ITAT MUMBAICorrect head of income - Taxability of rental income in respect of the property at Fort (Mumbai) under the head 'Profits and gains of business or profession' OR 'Income from house property' - Whether letting out of the property is not the part of business activity of the assessee and that letting out of property was an isolated activity of the assessee? - HELD THAT:- The assessee has declared its income from letting out of house properties under the head ‘Income from House Property' which falls under Chapter IV-C of the 1961 Act containing Section 22 to 27.Thus, the assessee will be entitled only for deductions prescribed under sections 22 to 27 of Chapter IV-C of the Act, while computing ‘income from house property’ chargeable to tax. This chapter IV-C of the Act does not provide for depreciation on immovable properties as one of deductions from income earned by assessee from letting out of such house property. However, section 32 of the Act provides for depreciation and falls under Chapter IV-D which concerns itself with computation of income from Profits or Gains from ‘Business or Profession’. Thus, there is no question of allowing any deduction as depreciation under section 32 for the period for which this property was let out and income thereof was offered for tax under the head 'income from house properties'. Thus, we concur with the finding of the assessing officer. Office house property (office premises) earlier used for the purpose of business is not used for the purpose of business during the year under consideration and that the assessee has let out the same for the first time on rent and assessing officer may restrict to a fair proportionate part of asset for the purpose of depreciation - We find convincing force in the contention of assessee and restore back this issue to file of assessing officer to examine the issue afresh on this contention and pass the order in accordance with law. Needless to order that before passing the order the assessing officer shall grant opportunity to the assessee as per the new procedure of assessment. The assessee is also directed to provide all information and evidence to the assessing officer. - Decided in favour of assessee for statistical purpose. Disallowance under section 14A in respect of expenditure attributable to earning of exempt income - HELD THAT:- Assessee fairly conceded that ground is covered against the assessee by the decision of Hon’ble Apex Court in Maxopp Investment Ltd Vs CIT [2018 (3) TMI 805 - SUPREME COURT]. - Decided against assessee. Disallowance under Rule 8D(iii) - Assessee limited prayer that only those investment which yielded the exempt income during the year may be considered for computing the average value of investment which yielded exempt income during the year - HELD THAT:- We find convincing force in Assessee's submission that only those investments which yielded exempt income during the year be considered for computing the average value of investment. Therefore, the assessing officer is directed to re-compute the disallowance under Rule 8D(2)(iii) by following the decision of Special Bench of Delhi Tribunal in Vireet Investment P. Ltd.[2017 (6) TMI 1124 - ITAT DELHI] Deduction in respect of education cess - admission of additional ground of appeal - HELD THAT:- Considering the fact that the ground of appeal raised by assessee is purely legal in nature and no new facts are necessary to be brought on record for considering the relief claimed under this grounds of appeal and further, considering the decision of Sesa Goa [2020 (3) TMI 347 - BOMBAY HIGH COURT] we admit the ground of appeal and direct the AO to consider the claim of assessee and allow appropriate relief in accordance with the decision above wherein it was held that Education Cess and Higher and Secondary Education Cess are liable for deduction in computing income chargeable under head of 'profits and gains of business or profession’. Hence, this ground of appeal is admitted and restored to the file of assessing officer to consider and allow appropriate relief to the assessee.
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