TMI Blog2014 (11) TMI 976X X X X Extracts X X X X X X X X Extracts X X X X ..... income of the above discussed items in the light of the judgment of the hon'ble jurisdictional High Court by means of a speaking order. - Decided in favour of assesse for statistical purposes. Non-granting of exemption under section 10(23G) of the Act in respect of the abovereferred items of income - Held that:- Only when the correct nature of income is determined as to whether it is "income from other sources" or "business income", that the position regarding the allowability or otherwise of exemption under section 10(23G) can be ascertained. We, therefore, direct the Assessing Officer to decide the question of exemption under section 10(23G) in respect of the above items of income, after first ascertaining the correct nature of income as discussed above. Disallowance of depreciation - CIT(A) allowed the claim - Held that:- It has not been denied by the Assessing Officer that the assessee exercised dominion over such property having right to occupy and use the same. In such circumstances, the assessee shall be treated as the owner of such properties entitled to claim of depreciation. In so far as the second objection of the Assessing Officer about the claiming of depreciati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income from core activity, the Assessing Officer allowed exemption under section 10(23G). As regards the income from other activity consisting of interest on deposit, interest on staff loan, interest on Government securities, service charges for handling UNDP programme, miscellaneous income, profit on sale of fixed assets, difference in exchange, commitment fee, application fee, MNES service charges, the Assessing Officer treated it as income from other sources and, hence, did not allow the benefit of exemption under section 10(23G). When the matter finally came up before the Tribunal, it was held that such items of income were in the nature of business income and, hence, could not be considered as income from other sources . Consequently, the benefit of exemption under section 10(23G) was allowed by the Tribunal. The Revenue challenged the order of the Tribunal before the hon'ble High Court for these assessment years. The hon'ble jurisdictional High Court vide its judgment dated October 21, 2011, observed that the Tribunal did not discuss the factual matrix pertaining to each item of the income as discussed above with reference to its source, the purpose and object i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... our considered opinion, the ends of justice would meet adequately if the matter is sent back to the Assessing Officer for elaborating, considering and then deciding the true nature of income of the above discussed items in the light of the judgment of the hon'ble jurisdictional High Court by means of a speaking order. 4. The second issue remitted by the hon'ble High Court to the Tribunal is about the granting or non-granting of exemption under section 10(23G) of the Act in respect of the abovereferred items of income. In our considered opinion, the second question is consequential to the first question. Only when the correct nature of income is determined as to whether it is income from other sources or business income , that the position regarding the allowability or otherwise of exemption under section 10(23G) can be ascertained. We, therefore, direct the Assessing Officer to decide the question of exemption under section 10(23G) in respect of the above items of income, after first ascertaining the correct nature of income as discussed above. 5. In the result, these appeals are allowed for statistical purposes to the above extent. Assessment year 2003-04 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue after rendering decision on the question of exemption under section 10(23G) in respect of the above items of income. 9. In the result, both appeals are allowed for statistical purposes to the above extent. Assessment year 2004-05 10. There are two cross-appeals-one by the assessee and the other by the Revenue-which arise out of the order passed by the Commissioner of Income-tax (Appeals) on December 14, 2007. The first ground raised by the Revenue is against the direction given to the Assessing Officer for calculating disallowance of expenses relating to earning of exempt income. The second ground of the Revenue's appeal is against the deletion of disallowance of deduction under section 36(1)(viii) amounting to ₹ 19,13,03,000. The assessee is aggrieved against the treatment of different items of income as discussed above being considered as income from other sources as against its claim of profit and gains of business or profession . The next issue is against the granting of exemption under section 10(23G) and the last issue is about the computation of deduction under section 36(1)(viia)(c). The first ground about the filing of revised return not beari ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee. 14. The only other ground is against the direction given by the learned Commissioner of Income-tax (Appeals) for allowing depreciation amounting to ₹ 11,29,023. Briefly stated, the facts apropos this ground are that the assessee claimed depreciation of ₹ 10,04,990 and ₹ 1,24,033 on office building and residential building at the rate of 10 per cent. and 5 per cent. respectively. As per note No. 5 appended with the return of income, conveyance deeds in respect of these leasehold buildings were yet to be executed in favour of the company. The assessee was called upon to explain as to how the depreciation could be allowed on the cost of building without any conveyance deed. The Assessing Officer also observed that the cost of land was also embedded in the total cost on which depreciation was claimed. In the absence of any registered sale deeds, registering these properties in the name of the assessee, the Assessing Officer disallowed depreciation. The learned Commissioner of Income-tax (Appeals) accepted the assessee's contention relying on the judgment of the hon'ble Supreme Court in the case of Mysore Minerals Ltd. v. CIT [1999] 239 ITR 775 (S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e are two cross-appeals-one by the assessee and the other by the Revenue-which arise out of the order passed by the Commissioner of Income-tax (Appeals) on August 31, 2010. The only issue raised by the assessee in its appeal is against the decrease in deduction under section 36(1)(viia)(c). The Revenue is aggrieved against the treatment of various items of income as business income as against the Assessing Officer's opinion of income from other sources . The second ground is about the allowing of exemption under section 10(23G) and the third ground is about allowing of deduction under section 36(1)(viii) of the Act. 18. After considering the rival submissions and perusing the relevant record, we find that there is no discussion in the assessment order about the nature of each item of income. The authorities below have applied their respective earlier views without discussing in detail the nature of income. Following the view taken hereinabove, we set aside the impugned order and remit the matter to the Assessing Officer for firstly determining the correct nature of these items of income and, thereafter, deciding the question of allowing exemption under section 10(23G) and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssions and perusing the relevant record, we find that the issues raised in these appeals are similar to those taken up and decided for the earlier years. Following the same view, we set aside the impugned order and send the matter back to the file of the Assessing Officer for deciding them in conformity with our decision given in the earlier paras, after allowing a reasonable opportunity of hearing to the assessee. 27. In the result, the appeals are allowed for statistical purposes to extent indicated above. Assessment year 2009-10 28. The Revenue has preferred this appeal against the order passed by the learned Commissioner of Income-tax (Appeals) on July 2, 2012. 29. Here again, we find that the first ground is about the treatment of various items of income accepted as Business income as against the Income from other sources as held by the Assessing Officer ; the second ground is about the deduction under section 36(1)(viii) ; and the last ground is about entitlement of depreciation of office premises as well as the residential flat. 30. Both sides are in agreement that the facts and circumstances of these grounds are similar to those discussed above for earl ..... X X X X Extracts X X X X X X X X Extracts X X X X
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