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2020 (12) TMI 771 - AT - Income TaxDisallowance of stamp duty and registration fee paid at the time of registration of tenancy agreement - HELD THAT:- On a reading of the tenancy agreement as a whole it does not appear that there is transfer of property by the landlord to the assessee as concluded by Commissioner (Appeals). Though, it may be a fact that the tenancy agreement is silent on the duration of the terms of the tenancy, however, there are various terms and conditions in the tenancy agreement which make it clear that the right, title and interest over the tenanted property still remains with the landlord and have not been transferred to the assessee. It is a fact on record that the tenancy agreement has been executed and registered under the Maharashtra Rent Control Act,1999. Also a fact on record that the monthly rent paid by the assessee and the landlord has been allowed as expenditure. That being the case, there is no reasonable basis for disallowing the stamp duty and registration charges by holding it as capital expenditure. Though Commissioner (Appeals) has referred to a Board resolution to conclude that the assessee has acquired enduring right over the property, however, the terms of the tenancy agreement speak differently. If one goes by the tenancy agreement, there cannot be any doubt that there is no perpetual right granted to the assessee. In view of the aforesaid, we hold that the expenditure incurred by the assessee towards stamp duty and registration charges for registering the tenancy agreement is revenue in nature and allowable. Accordingly, we direct the Assessing Officer to delete the addition. Ground no.1, raised by the assessee is allowed. Disallowance of expenditure - AO found that the chemical business earlier carried on by the assessee is no longer in existence therefore, he was of the view that various expenses claimed by the assessee which do not have any nexus with the interest income earned cannot be allowed - HELD THAT:- Undisputedly, the expenditure claimed by the assessee was disallowed solely for the reason that the chemical business of the assessee is no longer in existence. It is the claim of the assessee that the business has not been closed permanently. In our view, if the assessee can bring on record sufficient evidence to prove that the business is continuing and has not been permanently closed, the expenditure relating to such business has to be allowed. However, since the assessee requires to establish its claim through proper evidence, we are inclined to restore the issue to the Assessing Officer for fresh adjudication after providing reasonable opportunity of hearing to the assessee. The ground raised by the assessee is allowed for statistical purposes.
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