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2015 (4) TMI 748 - AT - Income TaxTreatment of rental income by giving counters/spaces/shops in Retail Mall - Income from House Property vs Profits & Gains of Business - Dis-allowance of various expenses - Allowability of interest paid to partners u/s 24(b) - Additional ground submitted before ITAT- Held that:- The issue in the present case is as to whether the income earned from letting out of counters, spaces is to be considered as “business income” or “Income from house property”. We find that ld. CIT(A) after considering the detailed submissions of the Assessee has reached to a conclusion that the activity of giving counters/spaces/shops was never taken up as a business venture but was to earn rent. With respect to the allowability of interest paid to partners as interest allowable u/s. 24(b), we find that ld. CIT(A) has noted that interest allowable u/s. 24(b) cannot be equated with interest allowable u/s. 36(1)(iii) of the Act. Before us, ld. A.R. has relied on the decision in the case of Neha Builders Pvt. Ltd. [2006 (8) TMI 105 - GUJARAT HIGH COURT]. However, we find that the ratio of the aforesaid decision is not applicable to the facts of the case because the rental income which was earned from the property in case of Neha Builders was held as “stock in trade” whereas in the case of Assessee, A.O has noted that the property was shown as “capital work in progress” and not as “stock in trade” - Taxable as income from House property - Decided against the assessee. In the case of Sane and Doshi Enterprises [2015 (4) TMI 707 - ITAT MUMBAI], we find that expenditure for claim of deduction u/s. 24(b) was allowed by following the decision of the Tribunal in assessee’s own case for earlier years. Considering the aforesaid facts, we are of the view that the decisions cited and relied upon by the ld. A.R. are not applicable to the present case. Further deduction u/s. 24(b) is allowable when the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital. In the present case no material has been brought on record to demonstrate that the borrowed capital has been used for the acquisition of property. Considering the totality of the aforesaid facts, we find that no reason to interfere with the order of ld. CIT(A) and thus the grounds are dismissed. - Deduction of interest not allowed - Decided against the assessee. Set off of brought forward business loss - With respect to the additional ground we find that this ground has been taken before us for the first time and was not taken before ld. CIT(A) and therefore ld. CIT(A) had no occasion to examine the issue. In view of these facts, we are of the view that the additional ground taken by the Assessee needs to be examined at the end of ld.CIT(A). We therefore remit the issue to the file of ld. CIT(A) to decide the ground on merits after considering the submissions of the Assessee and in accordance with law. Needless to state ld. CIT(A) shall adequate opportunity of hearing to both the parties. Before the CIT(A), the assessee shall be free to produce additional documents, if so desired, subject to the fulfillment of the requirement under Rule 46A of the Income Tax Act. In the result, the ground of Assessee is allowed for statistical purposes. - Decided partly in favour of assessee.
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