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2020 (1) TMI 1016 - AT - Income TaxCorrect head of income - Income bifurcation - Income from letting of the property - adding back one-third statutory deduction after treating the income from house property as income from business - whether the assessee was justified in bifurcating the receipts from M/s. PACL Ltd. as income under two heads, i. e., "income from house property" and "income from business"? - HELD THAT:- We notice that the AO had ignored the addendum agreement as the same was not registered. Whereas it is also a factual position that even the agreement dated December 31, 2010 was also an unregistered document, therefore, in such a situation, the Assessing Officer was not expected to adopt the pick and choose method. Even otherwise, the Revenue failed to demonstrate as to how the addendum dated April 12, 2011 was compulsory registerable. AO had simply mentioned that the addendum dated April 12, 2011 was an afterthought. As per the factual position, the said addendum cannot be termed as an afterthought as the same was submitted before the Assessing Officer along with the agreement dated December 31, 2010 at the time of assessment proceedings and when once both the documents were presented by the assessee to the Assessing Officer during the course of assessment proceedings, thus, in that circumstances, it was incumbent upon the Assessing Officer to verify the genuineness and veracity of the said document. The Assessing Officer was not expected to adopt the short method and simply reach to the conclusion that the said addendum dated April 12, 2011 was an afterthought without recording any reasons or basis for reaching to the said conclusion. Bifurcation done by the assessee under the two heads of income, i. e., "income from house property" and "income from business" is in conformity with law and the same has been done on the basis of comparative market rate as charged by him from the other parties including that of the hon'ble High Court. That since the bifurcation has been done on scientific basis and no infirmity has been pointed out on record by the Assessing Officer by placing on record any counter rates or has not been able to rebut the said comparative market rates placed on record by the assessee, no new facts or circumstances have been brought before us in order to controvert or rebut the well reasoned finding, so recorded by the Commissioner of Income-tax (Appeals), thus, we have no reasons to interfere into or deviate from the findings so recorded by the learned Commissioner of Income-tax (Appeals). Therefore, this ground raised by the Revenue stands dismissed. Additions made on account of claim of depreciation - HELD THAT:- Similar additions were also made in the assessment year 2011-12 which were deleted by the Commissioner of Income-tax (Appeals) vide order dated May 25, 2017 wherein 100 per cent. depreciation was allowed by the Commissioner of Income-tax (Appeals). On handsets, phones 80 per cent. depreciation has been allowed and 60 per cent. depreciation was allowed on projector, therefore, following the said decisions the Commissioner of Income-tax (Appeals) had decided this ground. Revenue has not placed on record any material to rebut the contentions of the Commissioner of Income-tax (Appeals) or has not placed on record any order of higher authority disagreeing with the order of the Commissioner of Income-tax (Appeals) in the earlier orders. Thus, we find no reasons to interfere into the said finding recorded by the Commissioner of Income-tax (Appeals). Therefore, this ground raised by the Revenue also stands dismissed.
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