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2023 (11) TMI 632 - AT - Income TaxDisallowance u/s 14A r.w.r.8D - HELD THAT:- As disallowance under section 14A cannot exceed exempt income earned by the assessee during the year. Ground of appeal so taken by the Revenue is dismissed. Claim of depreciation @ 30% on the buses as against 15% allowed by the AO - HELD THAT:- Hon'ble jurisdictional ITAT in the case of Dabwali Transport Co . Ltd. vs. DCIT, Bathinda [2016 (6) TMI 1283 - ITAT AMRITSAR] held that the buses were entitled for higher rate of depreciation at the rate of 30%. Correct head of income - rental income under the head Income from Business & Profession or income from House Property as treated by the AO - HELD THAT:- The question is whether the fact that rent has been fixed as a percentage of gross sales is sufficient enough to classify a particular transaction as business transaction or there should be other factors or terms and conditions of the agreement which should be considered before taking a final view in the matter. Agreements have to be read and understood holistically to get a clear picture of business understanding between the two parties, and one cannot be swayed solely by how the revenues are distributed or the operations have to be carried out. Unfortunately, we do not have the benefit of either of the agreements before us and therefore, in absence of the same, we are of the considered view that the matter deserve to be set-aside to the file of the ld CIT(A) to examine the same a fresh taking into consideration the aforesaid discussions and decide the same as per law. The ld CIT(A) shall also take into consideration the decision of Sheetal Khurana Food Private Limited [2011 (1) TMI 763 - PUNJAB AND HARYANA HIGH COURT] as well as Tranvancore Sugar and Chemicals [2022 (4) TMI 396 - KERALA HIGH COURT] and any other authority which the assessee, as advised wishes to bring on record and decide the applicability thereof in the facts of the present case. In the result, the ground of appeal is allowed for statistical purposes. Characterization of the transaction - Allowing cost of improvement claimed by the assessee against the Short Term Capital Gain (STCG) on sale of land at village - CIT(A) has treated the transaction as adventure in nature of trade and not as transfer of capital asset - HELD THAT:- Revenue has not disputed this re- characterization of the transaction done by the ld CIT(A). Therefore, where the transaction is treated as adventure in nature of trade, the net profit resulting from the said transaction can be brought to tax. The assessee has established the necessary nexus of incurrence of expenditure of Rs 18 lacs by way of purchase of non-forest land and transfer thereof directly in favour of Forest Department for getting the necessary change of land use and permission to develop ecotourism resort. Therefore, the same has been rightly allowed by the ld CIT(A) while bringing the transaction to tax. Also where the said cost as claimed by the Revenue (as part of its ground of appeal) has already been allowed in the year of purchase i.e, A.Y 2013-14, the assessee cannot claim the same again in the year under consideration. The matter is accordingly set-aside to the file of the AO to examine whether the said amount has been allowed to the assessee in the year A.Y 2013-14 or not and where the same is found to be correct, the benefit thereof cannot be allowed to the assessee. In the result, the ground of appeal is partly allowed for statistical purposes.
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