TMI Blog2017 (8) TMI 320X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee shall be chargeable under the head ‘Business Income’. We are of the considered opinion that disallowance computed by AO under Rule 8D require re-appreciation / re-working in the light of our decision in revenue’s appeal. Therefore, we deem it fit to restore this matter back to the file of AO for re-appreciation / re-working of disallowance u/s 14A read with Rule 8D. We accordingly direct so. To reiterate, the rental income earned by assessee shall be assessed as ‘Business Income’ against which business expenditure as per law shall be allowable. The disallowance u/s 14A read with Rule 8D shall be computed denovo. The assessee shall be allowed set-off of unabsorbed depreciation in terms of our above order. The set-off / carried forwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ces as against returned income of Rs. Nil filed by the assessee on 14/10/2010. The assessee was engaged in the business of providing business center facilities, leasing of properties / Plant machinery and investment in shares/properties/securities during impugned AY. During assessment proceedings, AO noted that the assessee earned rental income of ₹ 533.16 Lacs which was reflected under the head Business Income , which in the opinion of AO, was taxable under the head Income from House property . After hearing assessee s contention and placing reliance on various judicial pronouncements and status of assessment in earlier years, AO treated the same under the head Income from House Property against which the assessee was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y stated that the issue stood covered in assessee s favor in the wake of all these judicial pronouncements. This being the settled position, we dismiss Ground No. 1 of revenue s appeal. Consequently, the assessee becomes entitled to claim the business expenditure as per law against the same, which results into dismissal of Ground No.2 of revenue s appeal. Regarding the set-off of unabsorbed depreciation of AY 1995-96, the Ld. AR has placed reliance on the judgment of Hon ble Gujarat High Court in the case of General Motors India P. Ltd. Vs DCIT [354 ITR 244 23/08/2012] to contend that the set-off of unabsorbed depreciation has been allowed by the Gujarat High Court after considering the relevant statutory provisions of Section 32 as amend ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t any success vide order dated 24/02/2015, against which the assessee is in appeal before us. 5. The Ld. AR, while drawing our attention to the financial statements of the assessee, contended that the assessee incurred administrative expenditure under various heads, the majority of which were directly relatable to the leasing business carried on by the assessee and nothing to do with investment or earning of exempt dividend income. Therefore, such heavy disallowance was not warranted in the circumstances and the disallowance, at the most, be restricted to the extent of ₹ 10,12,650/- being exempt income earned by the assessee. Per Contra, Ld. DR opposed the same on the premises that the assessee could not bring on record any mater ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the light of our decision in revenue s appeal. Therefore, we deem it fit to restore this matter back to the file of AO for re-appreciation / re-working of disallowance u/s 14A read with Rule 8D. We accordingly direct so. To reiterate, the rental income earned by assessee shall be assessed as Business Income against which business expenditure as per law shall be allowable. The disallowance u/s 14A read with Rule 8D shall be computed denovo. The assessee shall be allowed set-off of unabsorbed depreciation in terms of our above order. The set-off / carried forward of business losses / depreciation, if any, shall also be reworked. The assessee s appeal stands allowed for statistical purposes. 7. In nutshell, the revenue s appeal st ..... X X X X Extracts X X X X X X X X Extracts X X X X
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