Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2012 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2012 (12) TMI 324 - ITAT MUMBAIIncome from house property - computation of ALV - Sec. 7 of the Bombay Rents, Hotel and Lodging House Rates Control Act, 1947 is not applicable in respect of Flat C of the Madhukunj property - Held that:- Flat ‘C’ of Madhu Kunj property has been let out since July, 1970 & that Flat ’C’ of Madhu kunj became the asset of the firm M/s. Premchand Roychand & Sons with effect from June, 1979, thus Flat ‘C’ is on the same platform as Flat A & B of Madhukunj property and therefore the ALV of the flat ‘C’ should be computed in the same line as that of Flat A & B - The findings of the CIT(A) are reversed as ALV of Flat ‘C’ has to be determined as per the standard rent - No reason to sustain the money value of interest free deposit of Rs. 60,88,738/- as computed by the AO and confirmed by CIT(A). Therefore, the AO is directed to delete the addition of money value of interest free deposit - in favour of assessee. Disallowance being 10% of telephone, telex, and fax charges - Held that:- Considering the chart submitted by assessee it depicts that out of total debit of Rs. 14,06,991/- the assessee has recovered a sum of Rs. 9,58,197/- from its tenants thereby resulting into a net amount of Rs. 4,48,794/-. As it appears that this bifurcation of expenses was not before the lower authorities it is fit to restore this matter back to the file of AO to verify the details of this chart and restrict the disallowance of 10% to net amount only - in favour of assessee for statistical purposes. Disallowance of payment made to Ramabai Kokre - settlement amount in relation to a suit filed in the Small Causes Court in 1991 - Held that:- As the assessee had filed a plea made to Small Causes Court stating that the settlement has been arrived between the assessee and the wife of the driver by which the assessee has agreed to pay ex-gratia amount as paid by cheque No. 971080 dt, 17.11.1997 which has been acknowledged by the Legal heir of the deceased driver. Thus such payments are made to avoid unnecessary litigation and to buy peace of mind therefore need to allow the claim as business expenditure - in favour of assessee. Disallowance of expenditure of purchase of paintings - Held that:- Considering the nature of the business of the assessee he has to maintain the business centre by giving it a decent look therefore display of painting on its wall is to be treated as business expenditure. Having allowed the sum as business expenditure, the assessee will have to forego the depreciation on this amount which has been allowed by the AO - in favour of assessee. Disallowance of deduction being 10% of the motor car expenses - Held that:- Considering the chart submitted by the assessee as noted in Ground 2 it is found that out of the debits under the head motor car expenses, the assessee has also shown credits in the form of recoveries from tenants which has resulted into a net gain of Rs. 9388/-. The AO is directed to verify the details as per the chart and if the net result is actually a gain, then no disallowance can be made under this head - in favour of assessee for statistical purposes. Disallowance of professional fees - CIT(A) allowed the claim - Held that:- AO has not assigned any reason for not accepting the claim of the assessee except that the assessee has separately claimed expenses under the head office repairs and maintenance, office equipments etc. Thus the AO has not made out any case of making such addition - in favour of assessee. Disallowance of expenditure on computer software - CIT(A) allowed the claim - Held that:- As new and improved version of the softwares are available which render the existing software obsolete. Therefore, it cannot be said that these softwares give any enduring benefit. Accordingly no reason to interfere with the finding of CIT(A) - in favour of assessee. Disallowance of expenditure under the head repairs and maintenance - CIT(A) allowed the claim to an extent - Held that:- Since all the expenses so incurred are periodic costs which are necessary to maintain a business centre. The nature of business of the assessee has also to be kept in mind and in this line of business , the center needs new and better look every year in the form of wall paintings , new furniture and carpets . Therefore, no reason to interfere with the findings of CIT(A) - in favour of assessee. Disallowance of expenditure in respect of payment made to Conwood Contractor and Architects and for fixing new woolen carpet in office premises - CIT(A) allowed the claim - Held that:- Considering the explanation above & considering the nature of the business of the assessee, these expenses are nothing but period costs and are recurring in nature and allowed them as Revenue expenditure - in favour of assessee.
|