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2016 (11) TMI 249 - AT - Income TaxOperational income from mall - treated as capital gain or income from business - Held that:- Issue under consideration is squarely covered by the order of the Tribunal in assessee's own case, wherein Tribunal have held that operational income received by the assessee company from running of Malls in the form of rent and service charges are assessable as business income in place of income from house property. Respectfully following the order of the Tribunal we do not find any infirmity in this part of order of the Ld. CIT(A) accepting assessee’s claim of income from business. Disallowance of interest expenses - Held that:- In the instant case though the interest payable relates to share application money taken in earlier year the liability to pay interest was crystallized during the year as the assessee as well as IL&FS has decided not to proceed with the allotment of shares in pursuance of agreement dt. 01/12/2007. It was not a suo motto decision of the assessee. No prudent businessman will suo motto make payment of expense unless and until it is due and payable nor will leave what is due to him. We have carefully gone through the terms of agreement dt. 01/12/2007 between the assessee and IL&FS for payment of interest on share application money and found that it is not a suo motto decision of the Assessee as alleged by the Ld. AO. The decision of payment of interest is consideration for use of funds for the purpose of business of the company hence allowable. It is neither payment to related party which attracts section 40A(2)(b) nor personal expense or capital expense. It is expense for the business of the assessee hence' fully allowable under the provisions of the Act. - Decided in favour of assessee
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