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2020 (10) TMI 85 - AT - Income TaxCorrect head of income - treatment of rental income received on account of letting out the surplus area of factory building - “income from house property” or “income from other sources” - Standard deduction u/s.24 against income earned on letting out of industrial shed along with office while holding such income as Income from house property - HELD THAT:- CIT(A) while deciding the issue has considered various decisions including the decision of M/s. Universal Plast Ltd. & others [1999 (3) TMI 15 - SUPREME COURT] relied on by the revenue in the grounds of appeal and after considering the totality of the facts of the case has given a finding that there is no activity carried out by the assessee except in the capacity of a normal owner of property carrying out normal maintenance and repairs and providing the standard facilities such as power, clean drinking water etc. and came to the conclusion that such income should be treated as income from house property. In view of the detailed reasoning given by the Ld. CIT(A) while treating the income as “income from house property” and considering the fact that in the past also such income was accepted by the revenue as income from house property. we do not find infirmity in the order of the Ld. CIT(A) on this issue - Decided against revenue. Addition u/s 14A u/s 8D(2)(ii) - CIT-A allowed part claim - HELD THAT:- We find the Ld. CIT(A) while directing the AO to reduce the interest income from the gross interest and thereafter compute the disallowance u/s 8D(2)(ii) has followed the decision of Morgan Stanley India Securities [2017 (6) TMI 864 - ITAT MUMBAI] - Decided against revenue. Disallowance of expenses incurred for payment to Shri K.Shrinivas & Shri Dinesh N. Jain - assessee failed to substantiate genuineness of services rendered by these persons in sale of shares - CIT- A deleted the addition - HELD THAT:- We find Ld. CIT(A) deleted the addition on the ground that such expenditure was approved by the Board Resolution which includes for payment of the remuneration in connection with the sale of the shares. He has further given a finding that Shri K Shri Niwas and Shri Dinesh N Jain had declared such income and paid taxes @ 30% whereas the assessee company was liable to tax @ 20% on the capital gain and therefore the intention of the assessee can not be considered as malafide. Shri K Shri Niwas who is a Mechanical Engineer and a diploma holder in advance management program from IIM, Bangalore is a professional director associated with the assessee company and does not hold any shares of the company. Similarly Shri Dinesh Nandan Jain has a long association with the promoters of Kenmore Vikas and is not a shareholder in the company. He has considered the role of Shri K Shri Niwas and Shri Dinesh Nandan Jain in the transaction and after considering the nature of services has allowed the claim - claim of the assessee was not based on 37(1) but u/s 57(iii) and the expenditure was incurred by the assessee for earning the huge capital gain. Since the Ld. CIT(A) has passed a detailed order giving reasons and since Ld. DR could not controvert the findings given by the Ld. CIT(A), therefore, we do not find any infirmity in the same - Decided against revenue.
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