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2013 (11) TMI 1317 - ITAT DELHIClassification of head of Income i.e. “income from house property” or “income from other sources” – Held that:- There was no letting of any machinery, plant or furniture belonging to the assessee. Once this finding of fact is not controverted, then there can be only one conclusion that letting of building which has certain amenities for which no separate charges are being recovered by the assessee would be liable to tax under the “income from house property” - A.O. in prior years has himself taxed the rental income of DLF Centre as “income from house property” and no changes in the facts and circumstances of the case are discernible in the year under review - Deduction of depreciation and annual repairs would be allowed to the assessee - CIT(Appeals) is correct in holding that the income from DLF Centre should be held under the head “Income from house property” – Decided against the Revenue. Addition on account of enhanced compensation received on acquisition of land – Held that:- Judgment of the Hon’ble High Court has been followed in assessee’s own case[1981 (12) TMI 21 - DELHI High Court] - Compensation received by the assessee on acquisition of agricultural land was exempt - It is only the enhanced compensation received this year against the acquisition of same land - Its nature cannot be different than the original compensation received by the assessee – Exemption allowed on the enhanced compensation on land – Decided against the Revenue. Recovery of Bad-Debts to be taxable u/s 41(1) of the Income Tax Act - Maintenance charges paid by the assessee on behalf of RPG Home Finance Pvt.Ltd. were debited to the account of RPG Home Finance Pvt.Ltd. in the earlier year. Since they defaulted in making the payment of even the purchase price of the property, the amount debited as maintenance charges to them was treated as bad debt in the year under consideration - Subsequently, a compromise took place and RPG Home Finance Pvt.Ltd. not only made the payment of outstanding purchase consideration but also of the outstanding maintenance charges – Held that:- Maintenance charges have been offered as income in AY 2005-06. Thus, at one hand, when the assessee has claimed the maintenance charges as bad debt, the same is disallowed and when it is recovered, it is treated as income. It would be double jeopardy because in AY 2005-06, the recovery of the maintenance charges can be taxed under Section 41(1) only if the deduction for the maintenance charges is allowed in the year under consideration – Decided against the Revenue. Disallowance on account of writing off of balance due from a wholly owned subsidiary set up for the proposed hotel project at DLF City, Gurgaon, which was subsequently abandoned by the company - Expenditure written off was claimed as allowable expense u/s 36(1)(vii) of the Act – Held that:- The expenditure was not incurred by the assessee but by M/s DLF Infrastructure, a subsidiary company of the assessee. Further, the expenditure was in respect of an entirely new project, that too, incurred in the earlier year - Amount cannot be allowed as a bad debt also because it was never reflected as income in the profit & loss account.
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