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2015 (6) TMI 1160 - AT - Income TaxAssessability of leave and licence income received - to be assessed as profit and gains of business or as income from other sources - Held that:- As discussed the director’s report dated 26/08/2003 with respect to licence fee with American Express Bank, which came to an end on 31/03/2003 after which a new licence agreement was entered into by the assessee with British Deputy High Commission, ratio laid down in Sultan Brother Pvt. Ltd. (1963 (12) TMI 4 - SUPREME COURT), Karanpura Development Company Ltd. vs CIT (1961 (8) TMI 7 - SUPREME COURT) identical fact in the case of Chennai properties [2015 (5) TMI 46 - SUPREME COURT] laid down the proposition that where as per the object clause in the Memorandum of Association, was to acquire and hold properties which in turn were let out, then the income arising from such letting out was assessable in the hands of the assessee as income from business - decided in favour of the assessee. Claim of expenses on account of staff recruitment/ training expenses - Held that:- The issue arising in the present appeal is squarely covered against the assessee in view of the order of the Hon'ble High Court in the case the assessee.[2015 (6) TMI 638 - ITAT MUMBAI] as held an overall appreciation of the evidence and explanation submitted on behalf of the assessee, we are of the view that the assessee has failed to explain and substantiate that the expenditure on staff training and salary pad to Mr. Naval Kumar was wholly and exclusively for the purpose of business of the assessee. We, therefore, confirm the orders of revenue authorities - Decided against assessee. Set off of unabsorbed depreciation - rectification of mistake u/s 154 - Assessing Officer opined that in view of section 32(2) of the Act such unabsorbed depreciation is not allowable to be set off of against the income of assessment year 2007-08 - Held that:- The decision in Mepco Industries Ltd. (2009 (11) TMI 24 - SUPREME COURT), Soora Subramanian (2009 (10) TMI 579 - MADRAS HIGH COURT) and Sri Ram Chits (Bang.) Ltd. (2013 (12) TMI 481 - ITAT HYDERABAD) held that the assessment based upon the Supreme Court decision cannot be rectified on subsequent retrospective amendment of law. Thus order of rectification u/s 154 of the Act, for AY 1998-99, levying interest for the first time 234B is not valid and since it was a debatable issue no rectification u/s 154 of the Act is permissible. We are in agreement with the conclusion drawn by the ld. Commissioner of Income Tax (Appeals) because in Mepco Industries Ltd. held that debatable issue cannot be rectified u/s 154 of the Act, thus, the order of rectification dated 14/10/2011 was rightly quashed by the ld. Commissioner of Income Tax (Appeals). We find no infirmity in the order, thus, appeal of the Revenue is dismissed.
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