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2014 (7) TMI 955 - AT - Income TaxRepair expenses disallowed Amount paid to society as compensation Held that:- Assessee has not claimed the expenditure during the AY under consideration and the mere fact that the payment has been made during the AY under consideration cannot be the basis for disallowing the same - the AO is directed to delete the expenditure already allowed in the earlier AY and further verify the quantum of expenditure incurred during the year - the AO is directed to decide in accordance with law, the allowability of the expenditure incurred during the year after providing reasonable opportunity of being heard to the assessee Decided partly in favour of Assessee. The expenditure is a reimbursement of cost incurred by the society and there is no income element which requires deduction of tax at source - the payment has not been paid as damages for breach of any agreement/infraction of law which is clear from the reading MOU - the authorities are not justified in making/confirming the disallowance Decided in favour of Assessee. License fees treated as business income Held that:- The rent has been received for the office premises which are owned by the assessee - even if house property is held as stock in trade, the rental income has to be assessed as income from house property as the assessee is owner of the house property and the house property is not used by the assessee for his own purpose - the AO is directed to verify whether the premises rented out to Reliance Life Insurance Ltd is different from the premises involved in the AY 2005-06 and the same is not forming part of the business centre and accordingly tax the rent as income from house property- Decide d in favour of Assessee. Notional interest on debit balance Held that:- CIT(A) has wrongly recorded that the assessee has not filed fund flow statement whereas the assessee filed the same providing source of withdrawals supported by bank statements for the claim of the assessee that no interest bearing funds are used for making payments to partners thus, the matter is remanded back to the Ao for fresh adjudication Decided in favour of Assessee.
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