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2018 (3) TMI 1312 - AT - Income TaxTreatment to the warehouse rent - income from business OR house property income - Held that:- Respectfully following the decision of the Hon’ble Supreme Court in the case of Chennai Properties [2015 (5) TMI 46 - SUPREME COURT], we hold that the ld CIT-A had rightly directed the ld AO to treat the warehouse rentals as income from business and consequentially allow the expenditure claimed in the return as business expenditure. Accordingly, the Ground No.1 raised by the revenue is dismissed. Disallowance of commission paid to related parties by invoking provisions of section 40A(2) - Held that:- The assessee had made payment of commission at 4% on sales made to both related as well as unrelated parties. Hence the percentage of commission at 4% is determined to be at Arm’s Length. Hence the same cannot be construed as excessive or unreasonable within the meaning of section 40A(2) of the Act. There is no evidence to prove that the impugned transaction of payment of commission was prompted by consideration of tax avoidance. On the contrary, the evidences suggest that the payee had suffered taxes on the said commission income at maximum marginal rate and had also derived commission income of ₹ 16.12 crores which admittedly includes commission payments made by the assessee herein. CIT-A had rightly appreciated these facts and contentions of the assessee and had rightly deleted the disallowance and we find no infirmity in the said order of the ld CITA in this regard. Accordingly, the Ground No. 2 raised by the revenue is dismissed Grant depreciation at 15% on Electrical Installations - Held that:- CIT-A had given a categorical finding that the electrical installations were integral part of plant and machinery installed at the factory and that the electrical installations inter alia included items such as transformers, electrical panels, HT wirings etc which were necessary for operating plant and machineries installed at the factory. He further held that without the aid and use of supporting electrical installations, the assesee’s factory could not have become operational. These findings are not controverted by the revenue before us. Hence we do not find any infirmity in the order of the ld CITA in this regard. Accordingly, the Ground No. 3 raised by the revenue is dismissed.
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