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2022 (12) TMI 541 - AT - Income TaxAllowability of expenditure u/s 37(1) from “Income from Business” - income earned by the assessee from letting out of property - interest and processing charges on home loan as allowable expenditure - HELD THAT:- As could be seen from MOA one of the main objects of the assessee company is to construct, acquire hold buildings, tenements and such other movable and immovable property and to rent let on hire and managed immovable property. Therefore, we noticed that undoubtedly the main objects of the assessee company provides to carrying on the business of letting out of properties and the assessee has let out its property during the year and earned rental income Which was offered to tax under the head “Income from Business”. Applying the ratio of the decisions of Rayale Corporation Ltd. [2016 (8) TMI 522 - SUPREME COURT] and Chennai Properties Ltd. [2015 (5) TMI 46 - SUPREME COURT] and also the other decisions referred to above, we hold that the income earned by the assessee from letting out of property is assessable under the head “Income from Business”. The decision of Sultan Brother [1963 (12) TMI 4 - SUPREME COURT] relied upon by the Ld. AO has already been distinguished by the Apex Court in Chennai Properties (Supra). As noted above, the property was let out by the assessee as per defined business objectives and lease rent earned by the assessee is rightly disclosed as business income. As we have held that the income from letting out of property is assessable under the head “Income from Business” the expenses incurred by the assessee towards interest and processing charges are allowable as deduction u/s 37(1) of the Act. We sustain the order of the Ld. CIT(A) and reject the grounds raised by the Revenue.
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