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2023 (3) TMI 966 - ITAT MUMBAIDisallowance of expenses - calculation on proportionate basis - Revenue contended that since the assessee has both ‘income from licensing activities’ and ‘business income’, the assessee cannot claim deduction under both the heads - AR stated that the expenses pertaining to brokerage, security and telephone expenses are exclusively ‘business expenses’ which are to be fully allowed and the other expenditure pertaining to repair and maintenance, etc. has been allocated by the assessee and only expenses related to the units owned by the assessee or leased out are claimed as expenses - A.O. had disallowed the total expenses by calculating the total area of the project from the leased area and by reducing the suo moto disallowance made by the assessee and had worked out the disallowance HELD THAT:- On a perusal of the profit and loss account of the assessee for the impugned year, it is evident that the assessee has not bifurcated the expenditure pertaining to the leased units and the units which are owned by the assessee. Even otherwise, the assessee has submitted that the assessee’s business premises is situated at Olympia building which was exclusively for carrying out the assessee’s business activity. By assuming that the rest of the properties were leased out by the assessee in which the assessee has received rental income inclusive of maintenance and the assessee has not shown any material evidence to prove that the assessee has not claimed double deduction u/s. 24 and section 57 of the Act. Neither the A.O. nor the ld. CIT(A) has looked into this aspect. The assessee has also not proved by any documentary evidence as how much maintenance the assessee is charging from the lessee for maintaining the area occupied by the lessee. In view of the same, we are of the considered opinion that the said appeal has to be remanded back to the A.O. for proper verification of the fact that the expenses claimed by the assessee pertain to the business activity of the assessee or relevant to the leased units. A.O. is directed to verify whether the maintenance expenses and other expenditures claimed by the assessee has not been claimed under ‘income from house property’ as well as ‘business income’. A.O. is also directed to consider the claim of the assessee in view of the receipts to be filed by the assessee to substantiate its claim and to consider whether the impugned expenditure pertains to ‘income from house property’ or ‘expenditure for business activity’. Revenue appeal is allowed for statistical purpose.
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