TMI Blog2016 (11) TMI 249X X X X Extracts X X X X X X X X Extracts X X X X ..... d payable nor will leave what is due to him. We have carefully gone through the terms of agreement dt. 01/12/2007 between the assessee and IL&FS for payment of interest on share application money and found that it is not a suo motto decision of the Assessee as alleged by the Ld. AO. The decision of payment of interest is consideration for use of funds for the purpose of business of the company hence allowable. It is neither payment to related party which attracts section 40A(2)(b) nor personal expense or capital expense. It is expense for the business of the assessee hence' fully allowable under the provisions of the Act. - Decided in favour of assessee - ITA No. 1437/Mum/2012, ITA No. 1258/Mum/2012 - - - Dated:- 19-10-2016 - Shri R. C. Sharma, AM And Shri Amarjeet Singh, JM Assessee by : Shri H. N. Singh Revenue by : Shri Vijay Mehta ORDER Per R. C. Sharma ( A. M ) These are the cross appeals filed by the assessee and the Revenue against the order of Ld. CIT(A) for the AY 2008-2009, in the matter of order passed under section 143(3) of the Income Tax Act. 2. The assessee has taken the following grounds in its appeal: 1. The Ld. CIT(A) erred in law a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ating income received by the assessee companies from Malls in the form of rent and other service charges as income from house property and the Id. CIT(A) was correct in treating the same as business income of the assessee companies by following the rule of consistency after having found that there was no change in the relevant facts and circumstances of the case. 13. It is also observed that while accepting the claim of the assessee companies that operational income in the form of rent and service charges constituted their business income on merit, the Id. CIT(A) has considered all the judicial pronouncements cited by the assessee as well as relied upon by the A.O. and decided the issue in favour of the assessee by applying the legal position emanating from the said judicial pronouncements. While doing so, he has duly taken into consideration the nature of business activity of the assessee company as well as the terms and conditions of the relevant agreements under which the commercial space in the Malls was given on hire by the assessee companies to the concerned parties. He has also taken into account the various services provided by the assessee companies during the course ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Tribunal holding that giving space with services and facilities of varied and wide nature would definitely constitute a business and the relationship between the parties in such case is distinguished from that merely of a landlord and tenant relationship. We therefore find no infirmity in the impugned orders of the Id. CIT(A) treating the operational income received by the assessee companies from running of Malls in the form of rent and service charges as their business income and upholding the same on this issue, we dismiss these appeals filed by the Revenue. 16. In the result, appeals of the Revenue are dismissed. 5. We have carefully gone through the orders of authorities below as well as order of Tribunal and found that issue under consideration is squarely covered by the order of the Tribunal in assessee's own case, wherein Tribunal have held that operational income received by the assessee company from running of Malls in the form of rent and service charges are assessable as business income in place of income from house property. Respectfully following the order of the Tribunal we do not find any infirmity in this part of order of the Ld. CIT(A) accepti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ey pending allotment during the year under consideration, and the assessee paid interest for the said amount, was eligible for deduction of interest as expenditure. 9. Further in support of proposition of deductibility of interest in the year of crystallisation reliance was placed on the decision of Delhi Bench in case of Urban Improvement Co. (P.) Ltd. Vs. ITA [177 Taxman(Mag) 104], wherein it was held that assessee was entitled to deduction on account of interest relating to earlier year, on the plea that same was crystallized only during the year under consideration. Reliance was also placed on the decision of Delhi High Court in case of Krishak Bharati Cooperative Ltd. Vs. CIT (45 taxmann.com 437), in support of the proposition that interest expenditure is deductible in the year of crystallization of liability. 10. We have considered the rival contention and deliberated on the judicial pronouncement referred by lower authorities in their respective orders and cited by the Ld. AR OR during the hearing before us in the context of factual matrix of the instant case. From the record we found that interest was paid on the share application money kept deposited with the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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