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Dy. Commissioner of Income-Tax 1 (3) , Centre-1, Mumbai Versus M/s. Shubham Properties Ltd. and M/s. Shubham Properties Ltd. Versus Asst. Commissioner of Income-Tax 1 (3) , Mumbai

2016 (6) TMI 1127 - ITAT MUMBAI

Carry forward of losses under the head “Income from House Property” as provided for in Section 71B - Held that:- ITAT ‘F’ Bench in case of Vaidehi Estates Ltd. Vs. DCIT (OSD) [2015 (7) TMI 1131 - ITAT MUMBAI] on similar issue decided the same in favour of assessee. Nothing contrary was brought to our knowledge on behalf of Revenue. Facts being similar, so following same reasoning, we hold that income assessee is to be computed as ‘Income from House Property’. Accordingly, assessee’s claim in thi .....

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y Revenue and assessee against the order of Commissioner of Income-Tax (Appeals)-7, Mumbai, dated 25.03.2013 for A.Y. 2007-08. 2. In ITA No.5256/Mum/2013, Revenue has filed the appeal on the following ground: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT (A) erred in allowing carry forward of losses u/s.71B of the I.T. Act without appreciating the fact that the Ld. CIT(A) himself has confirmed the expenses as Pre-operative expenses and such expense can be claimed U .....

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puted under the head Income from House Property . 4. Assessee purchased an immovable property on 6th floor of the building Times Tower at Kamala Mills Compound, Lower Parel, Mumbai, that was registered in the name of assessee in May 2006. Property was purchased out of unsecured loans taken by assessee from its holding company on which interest @ 8% per annum amounting to ₹ 85,15,695/- was paid by assessee during the year. Though property was registered in the month of May 2006, the Occupat .....

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ut in the subsequent financial year and hence no rent was received or receivable in respect of the said property. While filing its return of income, assessee computed the annual value of the said property under the head Income from House Property at Rs.Nil and claimed a deduction of interest paid on loan u/s.24 of the Act. Accordingly, a loss of ₹ 85,15,655/- was computed by assessee under the head Income from House Property and assessee claimed that the same be carried forward u/s.71B of .....

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as a pre-operative expenditure and thereby also disallowed the claim of assessee for carry forward of loss under the head Income from House Property as provided for in Section 71B of the Act. 5. Matter was carried before the First Appellate Authority, wherein various contentions were raised on behalf of assessee and having considered the same, CIT(A) observed that assessee was incorporated with the sole objective of acquiring the immovable property for the purpose of letting it out. It is not is .....

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income from rentals and the annual value of the property may be considered as nil. Therefore, these need to be allowed against 'Income from house property'. CIT(A) observed that assessee had itself stated that it is income from business and not income from house property. Without prejudice to the foregoing, even if the contention of assessee was accepted which was not acceptable, the property couldnot be said to be lettable as assessee had acquired the property only in the month of Janua .....

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be allowed in the year under consideration. The ALY of the property could not be taken as nil as the property cannot be reasonably expected to let out in the year under consideration. Therefore, the submissions of assessee was rejected and addition made by Assessing Officer was upheld. In case of pre-operative expenses, if the income is held as income from business, the business of assessee was not set off in the year under consideration, the same could not be allowed u/s.37 of the Act. Thus, t .....

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