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2014 (5) TMI 822 - HC - Income TaxAssessment of rental income from property Income from business or Income from house property Held that:- Relying upon Universal Plast Ltd. vs. Commissioner of Income-Tax [1999 (3) TMI 15 - SUPREME Court] - both the properties are owned by the assessee - the appellant is carrying on his own business without any break - Only certain portion of two properties in question were let down by the assessee due to certain financial crisis - The properties were business assets and used by the assessee for his own business - the Tribunal was rightly of the view that letting out of the commercial asset was business income - whether a particular letting is a business has to be decided in the circumstances of each case and each case has to be looked into from the businessman's point of view to find out whether letting was the doing of business or exploitation of his property by an owner - letting out was for the purposes of business - the premises City Centre, the Mall, has been taken back by the assessee and further in major portion of the premises assessee is already carrying out his own business - the asessee has rightly show his income as business income Decided against Revenue. Deletion of disallowance of interest on borrowed capital Facts not properly appreciated Held that:- The Tribunal was of the view that the assessee had claimed that the opening balance of advances from the customers was Rs. 36.92 lakhs as on 1.4.1996 - if the assessee has claimed the deduction of interest it has to prove that the borrowed funds have been utilized by it in its business but if part of the interest bearing funds have been diverted to other parties on which no income was being earned, the proportionate interest has to be disallowed - Revenue has to prove that the interest bearing funds have been diverted to other concerns for non-business purposes - the interest free advances with the assessee were far in excess of advances/investment made in purchasing the shares - CIT(A) was rightly appreciated the facts and deleted the addition - interest free advance with the assessee were far in excess to the investment made in purchasing the share, it is proved that borrowed funds have been utilized in business - the order of the Tribunal is upheld Decided against Revenue.
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