TMI Blog2017 (11) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... s, interest expenses etc. - These were disallowed by the lower authorities since the rental income earned by the assessee, as per their opinion, was chargeable under the head Income from house Property against which the assessee was eligible for fixed statutory deduction of 30% - Held that:- Since, we have already allowed assessee’s appeal qua head under which rental income would be assessable, we deem it fit to restore the matter of allowance of various expenditure to the file of jurisdictional Assessing Officer with a direction to re-appreciate the same and verify their allowability as per law. The assessee, in turn, is directed to substantiate the same forthwith failing which Ld. AO shall be at liberty to dispose-off the same on the basis of material available on record. Resultantly, all other grounds stands allowed for statistical purposes. - ITA Nos. 1133,558 & 724/Hyd/2010, ITA Nos.1010/Hyd/2009 And ITA No.308/Hyd/2012, ITA No.897/Hyd/2010, ITA No.2745/Mum/2013, ITA No.2748/Mum/2013 And .T.A. No.1992/Mum/2013 - - - Dated:- 4-10-2017 - SHRI D.T. GARASIA, JM AND SHRI MANOJ KUMAR AGGARWAL, AM For The Assessee : Naresh Jain, Ld. AR For The Revenue : R.P.Meena Saura ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eals) erred in treating the Lease Rentals income on house property equipment as Income from house property as against Business Income as done by your appellant. 3. On the facts and circumstances of the case, the learned Commissioner of Income tax (Appeals) grossly erred in not considering the claim of depreciation on equipment and amenities provided by your appellant to the tune of ₹ 8.70 crores. 4. On the facts and circumstances of the case, the Learned Commissioner of Income Tax (Appeals) grossly erred in confirming Assessing Officer s order with respect to denial of claim of depreciation on building denial of deduction of other expenditure which are permissible under business head. 5. On the facts and circumstances of the case, Ld. Commissioner of Income Tax (Appeal) erred in disallowing prepayment charges of ₹ 19,72,233/- by stating that foreclosure penalty is not covered in the definition of interest and cannot be allowed under the head income from house property. 6. On the facts and circumstances of the case, the Ld. Commissioner of Income Tax erred in disallowing interest on additional loan of ₹ 5 Cr. Obtained from HDFC Bank amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fresh loan obtained during the impugned AY, an amount of ₹ 5 crores was advanced to sister concern as interest free advances and accordingly, Ld. AO disallowed proportionate interest against the same which came to ₹ 10,81,707/-. 2.5 It was further noted that the assessee paid foreclosure amount of ₹ 19,72,233/- to Indusind Bank Limited, the deduction of which could not be granted to the assessee under Income from House Property in view of the statutory provisions. 2.6 Finally, by making above adjustments, the income of the assessee was re-computed as ₹ 99,63,333/-. 3. Aggrieved, the assessee contested the same without any success before Ld.CIT(A) vide impugned order dated 02/03/2010. During appellate proceedings, the assessee submitted written submissions against which a remand report was called for. The assessee reiterating the contentions submitted the transaction was composite letting out of Building and Plant Machinery along with various other amenities / facilities like centralized AC, DG Set, Car Parking, Elevators etc. and therefore, the same was assessable as Business Income. The attention was drawn to the fact that borrowed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eliance on CBDT Circular No.16/2017 dated 25/04/2017 where it has been clarified that the rental income earned by undertakings operating industrial Park / SEZ as per approved scheme would be chargeable to tax as Business Income. 4.4 Per Contra, Ld. DR while placing reliance on the stand of lower authorities, fairly conceded the settled legal position. 5. We have carefully heard the rival contentions and perused relevant material on record including cited case laws. At the outset, we are inclined to reproduce the main objects of the assessee company as evident from copy of Memorandum of Association placed on record:- A. THE MAIN OBJECTS TO BE PURSUED BY THE COMPANY ON ITS INCORPORATION ARE: To purchase, acquire, take on lease or in exchange or in any other lawful manner any area, land, buildings, structure and turn the same into account, develop the same and dispose of or maintain the same and to build Hi-tech parks, Software development zones, Software Technology Parks, Ports, Bio-tech Parks, Industrial estates, Industrial parks, townships, markets or other buildings, residential and commercial or conveniences, drainage facility electric, telephonic, televi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ltantly, this ground of assessee s appeal succeeds. 6. The assessee, in other grounds, is aggrieved by disallowance of various expenditure viz. depreciation, business expenses, interest expenses etc. These were disallowed by the lower authorities since the rental income earned by the assessee, as per their opinion, was chargeable under the head Income from house Property against which the assessee was eligible for fixed statutory deduction of 30%. Since, we have already allowed assessee s appeal qua head under which rental income would be assessable, we deem it fit to restore the matter of allowance of various expenditure to the file of jurisdictional Assessing Officer with a direction to re-appreciate the same and verify their allowability as per law. The assessee, in turn, is directed to substantiate the same forthwith failing which Ld. AO shall be at liberty to dispose-off the same on the basis of material available on record. Resultantly, all other grounds stands allowed for statistical purposes. Finally, the assessee s appeal stands partly allowed. 7. Now, we take up Assessee s Appeals ITA Nos.724/Hyd/2010 for AY 2006-07 ITA No. 308/Hyd/2012 for AY 2008-09. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y allowed whereas ITA No. 1010/Hyd/2009 stands dismissed, being infructuous. 10. Now, we take up revenue s appeal ITA No. 897/Hyd/2010 for AY 2006-07 where the revenue is aggrieved by certain relief provided to the assessee by Ld. CIT(A) qua interest expenditure. Since in assessee s appeal, we have already restored the issue of allowance of expenditure to the file of Ld. AO for re-adjudication, the revenue s appeal stands allowed for statistical purposes. 11. In revenue s appeal ITA Nos. 2745/Mum/2013 2748/Mum/2013 for AYs. 2007-08 2009-10, identical worded grounds has been raised. The revenue is aggrieved by the stand of Ld. CIT(A) that certain interest income earned by the assessee on advances and FDRs was assessable under the head Business Income as against Income from other sources taken by Ld. AO. Since, we have restored the issue of interest in all other appeals to the file of Ld. AO, the same is also restored back to the file of Ld. AO to re-adjudicate the same in the light of our decision in this appeal . Resultantly both these appeals stands allowed for statistical purposes. 12. As a logical consequence, Ld. AO is directed to re-compute the book pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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