TMI Blog2014 (3) TMI 500X X X X Extracts X X X X X X X X Extracts X X X X ..... ces – Expenditure not proved - Held that:- On this claim CIT(A) has further disallowed 50% against which the Counsel of the assessee submitted that the assessee is not in appeal - The assessee has incurred expenditure in earning income from other sources - Assessee has himself disallowed u/s 14A and balance has been claimed by the assessee - CIT(A) has allowed 50% of the expenditure - the expenses have been found to be bogus or the concerned vouchers were lacking – thus, there is no infirmity in the order of the CIT(A) in this regard – Decided against revenue. - I.T.A. No. 2490/DEL/2012 - - - Dated:- 12-3-2014 - Shri I. C. Sudhir And Shri Shamim Yahya,JJ. For the Petitioner : Sh. Pradeep Dinodia R.K. Kapoor, CA For the Respondent : M s. Y. Kakkar, DR. ORDER Per Shamim Yahya: AM. This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals-XVII, New Delhi dated 27.3.2012 pertaining to assessment year 2008-09. 2. The first issue raised is that Ld. CIT(A) erred in deleting the addition of Rs. 3,14,66,394/- by treating income from business of letting out of property as rental income and allowing deduction u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t clear from the assessment order as to how the AO had come to the conclusion that rent received by the assessee is disproportionate of the value of the house property. He observed that it is not the AO s case that assessee has received rent from sister concern nor he was of the view that the rent receipt is disproportionate to market rent. Ld. CIT(A) observed that rental income needs to be taxed as income from house property whether such rental income is high or low. Ld. CIT(A) concluded as under:- Considering the fact that the appellant has been consistently showing this rental income as income from house property from A.Y. 2003-04 onwards and also the fact that the Department had accepted this position in scrutiny assessments in the preceding two assessment years, there is no reason to come to a different conclusion for this year that the appellant is using colourable device to reduce its tax liability. The appellant is owner of the property and the TDS certificates clearly indicate that the appellant had received rental income. Thus this rental income is assessable as income from house property only and there is nothing on record for the AO to come to a conclusion that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onergys India Services (P) Ltd. and the rental income received was shown as income from house property. Assessee firm has a branch office which is in trading in shares and the income of which was shown as business income. This rent was shown under the head house property from asstt. year 2003-04 onwards and the assessments for the A.Y. 2006-07 2007-08 were completed u/s. 143(3) accepting the rental income as income from house property. 7.1 AO has not doubted the ownership of the assessee or the fact that premises are given on rent. AO s observation that rental income is too high is not at all a reason to treat the income as income from business. AO has not made out any case that assessee has been providing services and hence, the claim of rental income is to be disallowed. We agree with the Ld. Counsel of the assessee that the Income Tax Act does not make any distinction between commercial property and other property for the classification of income from house property. In these circumstances, nothing has been brought on record by the AO to show that the income returned as house property is actually income from business. 7.2 In this regard, Ld. Counsel of the assessee has a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sources and this consists of interest received of Rs. 29,56,629/- and miscellaneous income of Rs. 20,223/-. Against this income, the appellant has claimed an expenditure of Rs. 2,14,476/- after disallowing proportionate expenditure Rs. 3,10,289/- attributable to exempt income. In other words, the total expenditure deducted form income from other sources was Rs. 5,24,765/- and the appellant itself disallowed Rs. 3,10,289/- from this expenses and only the balance of amount of Rs. 2,14,476/- was claimed as deduction from income from other sources. However, the AO had disallowed the entire amount of Rs. 2,14,476/- without assigning any cogent reason. According to the appellant s AR, this expenditure is admissible as per section 57(iii) of the I.T. Act, 1961. Considering the nature of these expenditure being legal and professional expenses, office maintenance charges, salary paid, conveyance expenses. etc., I restrict the disallowance made by the AO to 50% of Rs. 2,14,476/- claimed by the appellant. As a result, the appellant gets a relief of Rs. 1,07,238/- and the addition of Rs. 1,07,238/- made by the AO is sustained. 12. Against the above order Revenue is in appeal before us. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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