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2021 (12) TMI 1208 - ITAT MUMBAICorrect head of income - earning income from leasing of the properties - income from house property or business income - HELD THAT:- The intention of the assessee can be understood only by its actions. Considering the fact that assessee is an individual and over the years assessee has declaring the income only under the head "Income from House Property" and it is far-fetched for the assessee to rely on the decision in the case of Chennai Properties & Investment Ltd. [2015 (5) TMI 46 - SUPREME COURT] with the assessee’s case. Therefore, we do not find any reason to entertain the grounds raised by the assessee. Accordingly, it is dismissed. Addition of bad debts - Assessee has earned the property for the purpose of earning interest income and assessee has declared the source of income in the return of income. From the record we observed that the company M/s. Rusam Developer Pvt. Ltd., has gone into liquidation and assessee could not recover anything from them including loan amount and the interest. Since the assessee has already declared the interest income as business income and revenue has accepted the source of income therefore the bad debts incurred by the assessee is certainly an expenditure allowable deduction u/s. 37 of the Act. Therefore, we direct the Assessing Officer to allow the bad debts claimed by the assessee. Accordingly, Ground No. 2 is allowed. Disallowing business loss as incurred by the Assessee due to cancellation of property booked by the Assessee with the Builder - Assessee recovered the cost of the property based on the agreement with the builder and the cost incurred by the assessee for registration are remained as expenditure. Since the property is clearly bought for the purpose of lease and this income will be charged to tax under the head "Income from House Property" and the cost incurred by the assessee by not recovery of registration charges can be a loss claimable under the head "Income from House Property". Accordingly, we direct the Assessing Officer to allow the loss claimed by the assessee.
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