TMI Blog2013 (12) TMI 782X X X X Extracts X X X X X X X X Extracts X X X X ..... 40a(ia) does not arise. - Held that:- In the case of M/s. Narne Constructions (P) Ltd [2013 (3) TMI 412 - ITAT HYDERABAD], it was observed that; unless the assessee claims this item as expenditure / payment, the A.O. cannot allow or disallow the same - Decided in favor of assessee. - ITA. No. 1230/Hyd/2013, ITA. No. 1298/Hyd/2013 - - - Dated:- 13-12-2013 - Shri Chandra Poojari, A.M. And Smt. Asha Vijayaraghavan, J.M.,JJ. For the Petitioner : Shri KC Devdas For the Respondent : Shri B. Yadagiri ORDER Per Smt. Asha Vijayaraghavan, J. M. These cross-appeals are filed by the Revenue and Assessee against the Order of the CIT(A)-III, Hyderabad dated 30.07.2013 for the assessment year 2007-2008. Since, common issues are inv ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tive of role played by the assessee in these transactions, as the income credited to profit and loss account being the lease rentals for the civil structure (building), the income is liable to tax under the head 'Income from House Property' only. The A.O. further observed that the assessee itself credited the rental income under the head 'Other Income' instead of under the head 'Income from business' in the accounts prepared under the Companies Act. The A.O. pointed out that this act of the assessee in treating the rental income as income from 'Other Sources' proves that there was no business activity. Therefore, the A.O. concluded that the assessee as a landlord merely let out the property and the assessee is not rendering other services s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng systems are liable for disallowance u/s. 40(a)(ia) as the assessee did not deduct tax at source under section 194C/194I". 4. Aggrieved, assessee filed appeal before the CIT(A) and the learned CIT(A) confirmed the order of the A.O. with respect to the lease rents paid to M/s. Rack India Pvt. Ltd. holding that TDS was to be deducted on these lease rentals. The learned CIT(A) hold that the amount in question is liable for deduction under section 40(a)(ia) of the Act and directed the A.O. accordingly. 5. Still aggrieved, the assessee filed the present appeal before the Tribunal. The learned Counsel for the assessee Shri K.C. Devdas pointed out that from the profit and loss account the assessee did not claim the above mentioned amounts as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... O. could disturb the same and disallow an expenditure claimed in the P L a/c. to the extent of 10%, which, in our opinion, is reasonable. On the other hand, if it is balance sheet item, the A.O. is precluded from doing so." 8. The above view has been further followed by the Coordinate Bench of this Tribunal in the case of M/s. Godavari Developers in ITA.No. 918/Hyd/2011 dated 31st October, 2012. 9. In the present case before us, no claim of expenditure has been made in the profit and loss account and we have verified the same from the profit and loss account for the year ending 31st March, 2007 at page 3 of the paper book where rent has not been claimed under the head "Expenditure" and we are convinced that the assessee is only an i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of rent. 6. The CIT(A) erred in granting relief for the expenses as business income as the assessee has not carried out any business activity. 7. The CIT(A) erred in holding the income received on let out of furniture and fixtures and generator rightly assessed as 'Income from other sources', to be assessed as business income. 8. Any other ground that may be urged at the time of hearing." 12. Brief facts of the issue, in ground Nos. 2 to 6, are with reference to the treatment of rental income derived from the property leased out as 'income from business' instead of treating the same as 'income from house property'. In this case, a warehouse/godown was let out by the assessee for preservation of goods belonging to M/s. Hindustan Leve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... were taxable as business income and not income from house property, more so when receipts were assessed as business income in the past and there was no change in factual or legal position." 5. In view of the above ratio laid down by the Tribunal, we are inclined to confirm the order of the CIT(A) on this issue. Ground Nos. 2 to 6 of the Revenue are dismissed. 6. With regard to the next issue (ground No. 7) the facts are that the assessee also has disclosed certain income from letting out of furniture fixtures and generator. The Assessing Officer has treated the said income received from furniture fixtures and generator as income from other sources. The Assessing Officer has refused to treat the same as rental income of furniture f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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