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2021 (1) TMI 27 - AT - Income TaxDisallowance of Lease Deed Registration Charges - registration charge for a leased property - allowable expenditure u/s 37(1) or not? - HELD THAT:- For the purpose of the payment of lease deed registration charges and stamp duty, Alok Industries will bring in the money into the joint venture. However, that does not mean that liability of the assessee does not exists for payment of stamp duty. In fact the source of the fund for payment of the stamp duty is by way of share capital and share premium from M/s. Alok Industries Ltd. Liability to pay the above sum remains with the assessee. Therefore, the above expenditure has to be incurred by the assessee and not by Alok Industries. Only the source of the funds in the joint venture company is to be provided by Alok Industries. When the leased premises are to be used for the purposes of business of the assessee, necessary lease registration charges are also liability of the assessee. Merely because Joint venture partners decides about who puts in money in J V for what purposes, it is merely that they are deciding about the sources of the funds, expenditure of J V may be financed out of that , but that does not make it the liabilities of J V partners, Instead of J V Itself. Therefore, in view of this we hold that the expenditure is incurred by the assessee for registration of lease deed. Therefore, such expenditure is allowable in the hands of the assessee under Section 37(1) of the Act. Hence the orders of the lower authorities are reversed and the Assessing Officer is directed to allow and delete the disallowance - Decided in favour of assessee.
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