TMI Blog2021 (3) TMI 176X X X X Extracts X X X X X X X X Extracts X X X X ..... must, in the first instance, determine whether the claim of the assessee in that regard is correct and the determination must be made having regard to the accounts of the assessee. The satisfaction of the AO must be arrived at on an objective basis. It is only when the AO is not satisfied with the claim of the assessee, that the legislature directs him to follow the method that may be prescribed. Sub-s. (3) of s. 14A provides for the application of sub-s. (2) also to a situation where the assessee claims that no expenditure has been incurred by him in relation to income which does not form part of the total income under the Act. See GODREJ AND BOYCE MFG. CO. LTD [ 2010 (8) TMI 77 - BOMBAY HIGH COURT] - Decided in favour of assessee. - Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appellant-Revenue and Mr.N.Devanathan, learned counsel for the respondent-assessee. 5. It is not disputed before us that the substantial questions of law raised by the Revenue in these appeals have been decided against the Revenue in T.C.A.Nos.732 and 733 of 2018 dated 07.07.2020 in the case of Commissioner of Income Tax Vs. M/s.Tidel Park Limited . The operative portion of the judgment reads as follows: 4. We take up for consideration the substantial question of law no.2 referred above. The tribunal in paragraph No.8.1, held that the Assessing Officer is not justified in making excessive disallowance and that the CIT(A) rightly restricted the disallowance to the extent the dividend income declared by the assessee. In fact the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ch is the relationship of the expenditure with income which does not form part of the total income-a disallowance has to be effected. All expenditure incurred in relation to income which does not form part of the total income under the provisions of the Act has to be disallowed under s. 14A. Income which does not form part of the total income is broadly adverted to as exempt income as an abbreviated appellation. Under sub-s. (2), the AO is required to determine the amount of expenditure incurred by an assessee in relation to such income which does not form part of the total income under the Act in accordance with such method as may be prescribed. The method, having regard to the meaning of the expression 'prescribed' in s. 2(33), mu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come under the Act. 7. The above legal position has been rightly followed by the tribunal while deciding the assessee's case and therefore, rightly dismissed the appeal filed by the revenue. Thus, we find that the Substantial Question of Law No.2 has to be answered against the revenue and in favour of the assessee. 8. So far as Substantial Question of Law No.1 is concerned, it has to be seen as to whether the income derived from letting out of the property in an industrial park/SEZ including the amenities and the income received by the owners for such property and the amenities therein would be business income in the hands of the owner of the property. 9. We need not labour much on this issue, on account of the circular ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase of CIT Vs. Chennai Properties and Investments Limited, reported in (2005) 274 ITR 117 , it was pointed out that income derived from letting out of the property with all amenities and facilities would be income from business and cannot be assessed either as income from house property or as income from other sources. The said decision of the Hon'ble Division Bench was appealed against by the revenue before the Hon'ble Supreme Court in SLP No.11638 of 2013 and we are informed that the appeal was dismissed on 27.01.2020 on the ground of Low Tax Effect. 12. Considering all those facts as wells as the circular issued by CBDT, substantial question of law No.1, has to be answered against the revenue and in favour of the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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