TMI Blog2014 (6) TMI 803X X X X Extracts X X X X X X X X Extracts X X X X ..... under the head business income as claimed by the assessee. - Decided in favor of assessee. The details of expenditure incurred by the assessee reveals that the expenses are for keeping the premises alive for earning the income from legitimate business of activity of renting - the legal fees expense claimed by the assessee is for the purpose of safeguarding the company’s tenanted properties - the income received from the business centre has to be treated as business income in pursuance of the adjudication and the fact that the expenditures have nexus with the business income, the expenditures claimed by the assessee have also to be allowed as business expenditure – the AO is directed to allow the expenditure claimed by the assessee – Deci ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... annot be treated as business of the assessee. Aggrieved by the impugned decision the assessee is in appeal before us. 2.1 Having heard both the sides and perused the material on record, it is pertinent to mention that the assessee has been earlier engaged in the business of manufacturing embroidery fabrics since 1947 and has been renting out surplus premises since 1967. The incomes from embroidery division as well as property division have been treated as business income and taxed accordingly. The perusal of the memorandum and articles of the association of the company available in the paper book indicates that there are 21 activities stated therein which carry equal status and cannot be distinguished into main activity and sub-ordinate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntre the member shall not be deemed to have acquired any such right, title are interest in any manner whatsoever. The reading of aforementioned paragraphs in the agreement suggests that the assessee has given the premises for the purpose of providing business services to the clients. As regards the contention of the Revenue that the Ward Inspector s report dated 23.12.2011 states that no furniture and fixture have been provided by the assessee, it is pertinent to mention that the assessee has not been provided opportunity to controvert the report and hence has no evidentiary value. In this connection, it is relevant to state that the High Court of Gujarat in the case of ACIT Vs. Saptarshi Services Ltd. (2004) 265 ITR 379 (Guj), the case whe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... we direct the AO to treat the impugned receipts in both the assessment years under the head business income as claimed by the assessee. 3. As regards the decision of the Ld. CIT(A) in confirming the action of the AO in disallowing the expenditures incurred by the assessee, the relevant facts are that the assessee had claimed certain expenditures during the AY 2007-08 which included the expenditures on account of interest of Rs.8,14,903/-, depreciation of Rs.60,561/-, bank charges of Rs,16,560/-, compensation of Rs.1,32,000/-licence fees of Rs.1305/-, rent paid of Rs.71,078/-. In the assessment framed, the AO disallowed the said expenditures on the reason that the interest of Rs.8,14,903/-, depreciation of Rs.60,561/- claimed by the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X
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