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2016 (7) TMI 133 - ITAT MUMBAI

2016 (7) TMI 133 - ITAT MUMBAI - TMI - (I) While computing annual value of property which has been let out - disallowance made on account of brokerage charges, legal expenses, maintenance charges and insurance expenses being not as per section 24. (II) Expenses, which were not incurred wholly and exclusively for the purposes of earning the income from other sources, cannot be allowed deduction u/s 57 - Held that:- The claim of the assessee in respect of brokerage charges and legal expenses, .....

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interest of FDRs, commission, speculative profit and loss from shares - AO was of the opinion that only receipt in the nature of business arising out of speculation in shares and the remaining receipts were in the nature of income of other sources and accordingly held that the expenses were not allowable u/s 57 - Held that:- the activity of the assessee of investing money in the FDRs in the banks in no way can be treated as receipt from the business and we agree with the view taken by the lower .....

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ther sources. After considering facts and circumstances, we are of the opinion that the order passed by the ld. CIT(A) is correct and accordingly, we uphold he order of the ld. CIT(A) by dismissing the appeal of the assessee on this issue.- Decided against assessee - I.T.A. No.7414/Mum/2013 - Dated:- 8-6-2016 - SHRI MAHAVIR SINGH, JM AND SHRI RAJESH KUMAR, AM For The Assessee : Ms.Apurva R Shah For The Revenue : Shrimati Bharti Singh ORDER PER RAJESH KUMAR, A. M: This appeal by the Assessee is d .....

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stated to be incurred wholly and exclusively for the purpose of business of investment etc however was not allowed by the AO and also upheld by the ld.CIT(A). 3. Facts in brief are that the assessee filed his return of income declaring total income of ₹ 59,40,420/- on 3.8.2010. The return was processed under section 143(1) of the Act. Thereafter, the case of the assessee was selected for scrutiny and the statutory notices u/s 143(2) and 142(1) were issued and served upon the assessee. It .....

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f the Act provide for deduction of such expenses in respect of property let out. 4. Before the ld. CIT(A), the assessee raised the issue of disallowance of ₹ 7,65,658/- on account of brokerage charges, legal expenses, maintenance charges and insurance expenses and the ld. CIT(A) partly allowed the appeal of the assessee by directing the AO to verify whether maintenance charges were paid to the housing society and by observing and holding as under : 2.3 I have considered the facts of the ca .....

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on account of expenditure incurred by the assessee on the aforesaid heads can be allowed as claimed by him. 2.3.1 As regards the allowability of deduction on account of maintenance charges, the assessee has placed reliance on the decision of the Hon'ble Mumbai Tribunal in the case of Sharmila Tagore (supra) in support of his contention. However, in the case of Sharmila Tagore, what was held to be allowable as a deduction by the Hon'ble Tribunal even while determining the annual value of .....

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ty. However, if the same is not paid to the housing society, no deduction shall be allowed in computing the income under the head "Income from House Property". The ground of appeal filed by the assessee is, accordingly, partly allowed. 5. After hearing both the parties and considering the material placed on record, we are of the view that the claim of the assessee in respect of brokerage charges and legal expenses, of the property are not as per the provisions of section 24 of the Act .....

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was worked out after claiming expenses of ₹ 21,06,469/-. These expenses were claimed against the receipt of ₹ 23,80,386/- which consisted of interest income of ₹ 24,09,421/- from banks deposits, commission of ₹ 12,000/-, speculative profit of ₹ 24,009/- and loss from shares ₹ 65,044/-. During the course of scrutiny-assessment proceedings, the AO observed that the assessee has only activity of business from trading in shares in which no delivery of shares were .....

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nication, car insurance, repairs salary, depreciation etc. and having no nexus with the earning of interest income and also held expenses are not covered under the provisions of section 57 of the Act. 7. The matter was carried before the ld.CIT(A). Before the ld.CIT(A), the assessee submitted that the business was being continued for the last several years and the assessee has proper office set up in order to take decisions relating to trading in shares and on investment of surplus funds. The ld .....

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of the case and the submissions made by the assessee. I agree with the decision of the Assessing Officer that by no stretch of imagination the interest earned on fixed deposits can be considered as an income chargeable under the head "Income from Business and Profession". The activity of the assessee of making fixed deposits and earning interest thereon cannot be regarded as a business activity. All that the assessee is doing is to invest his surplus funds in fixed deposits or manage t .....

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g the income from the fixed deposits. Hence, no deduction u/s 57 can be allowed to the assessee. The assessee has also not shown that these expenses have been incurred in the course of carrying out any business and that the same were laid out or expended wholly and exclusively for the purpose of any business or profession carried out by him. In view of the aforesaid reasons, the action of the Assessing Officer of not allowing the deduction of the expenditure of ₹ 21,06,469/ - is upheld. Th .....

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