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2016 (8) TMI 1579 - AT - Income TaxAllowable business expenses u/s 37(1) - expenses incurred for the running of the business of the assessee OR Income from house property - disallowing the claim of expenses from the business income on the alleged plea that the said expenses was claimed by the appellant against the Income from Houses Property - as per DR All the expenses have to be included for disallowance as business is composite - HELD THAT:- Respectfully following the afore-stated decision of the co-ordinate bench of this Tribunal in assessee’s own case in the immediately preceding assessment year [2016 (4) TMI 1435 - ITAT MUMBAI] for assessment year 2010-11 as facts are identical in the instant appeal, we are also inclined to set aside the matter to the file of the A.O. for verification of the various expenses like business promotion expenses , advertisement expenses and any other expenses debited to Profit and Loss which are directly attributable to earning of lease rental income having regards to the account of the assessee , will be disallowed by the A.O. It is also noted that in the preceding assessment year , the assessee suo motu voluntarily disallowed electricity expenses incurred in relation to R-Mall but the same are not disallowed in the instant assessment year under appeal which aspect shall also be looked into by the AO. This disposes of Ground No. 1, 2 & 3 raised by the assessee in the memo of appeal filed with the Tribunal as set out above. We order accordingly. Disallowance u/s 14A - as contended no expenses have been incurred for earning the exempt income as the assessee was having sufficient own funds for the investments made in the shares - HELD THAT:- We find that on identical facts in the immediately preceding year, the co-ordinate Bench of this Tribunal in assessee’s own case [2016 (4) TMI 1435 - ITAT MUMBAI] for assessment year 2010-11 has set aside the matter back to the file of the A.O. to decide the matter in accordance with the ratio of case of Cheminvest Ltd. [2011 (11) TMI 267 - DELHI HIGH COURT] and also work out disallowance of interest expenses after considering the availability of assessee’s own funds vis-à-vis investments made which yields exempt income - thus we set aside and restore the matter back to the file of the A.O. with the same directions as were given in the Tribunal afore-stated order for the immediately preceding assessment year. Disallowance u/s 40(a)(ia) being the alleged difference between amount mentioned in the tax audit report and the return of income - assessee is in second appeal before the Tribunal - HELD THAT:- As observed that the assessee has failed to deduct tax at source on the work-in-progress - Since the work-in-progress is part of the P&L account , the assessee was required to disallow the same on the grounds of non-deduction of tax as per provisions of Section 40(a)(ia) of the Act and the same cannot be claimed as expenses while computing income from business as the tax has not been deducted at source. Assessee has submitted that it has disallowed voluntarily the said amount of its own in WIP while filing return of income which needed verification by the authorities below and hence we are inclined to set aside and restore this issue to the file of the AO for de-novo determination of the issue on merits after considering the relevant evidences of the assessee. Needless to say proper and adequate opportunity of being heard shall be provided by the AO to the assessee in accordance with principles of natural justice in accordance with law. Disallowance u/s 80G - Difference as per the tax audit report the deduction calculated and assessee had claimed deduction u/s 80G - HELD THAT:- The assessee submitted that if an opportunity is provided to the assessee, the necessary documents in support of the claim of the assessee can be submitted which can be verified by the AO and deduction can then be allowed on merits as per provisions of Section 80G of the Act. The ld. D.R. submitted that he has no objection in granting an opportunity to the assessee to submit the relevant documents and matter may be restored to the file of AO for verification. In our considered view and in the interest of justice, we set aside and restore this issue to the file of the A.O. for verification of the claim of the assessee with respect to allowability of deduction on account of donation paid by the assessee as per provisions of Section 80G. Assessee’s appeal partly allowed for statistical purposes.
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