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Income Tax Appellate Tribunal - Mumbai

Bombay Stock Exchange Ltd.(Now Known As ... vs Dcit- Rg 2(1), Mumbai on 18 January, 2017

    IN THE INCOME TAX APPELLATE TRIBUNAL "H" BENCH, MUMBAI
      BEFORE SHRI D. KARUNAKARA RAO, ACCOUNTANT MEMBER
             AND SHRI AMARJIT SINGH, JUDICIAL MEMBER
                 ITA No.1594/M/2015 (AY 2007-2008)
Bombay Stock Exchange Ltd.,       फनाभ/ DCIT, Range 2(1),
(Now Known as BSE Limited)              R.No.551, 5 t h Floor, M.K.
                                  Vs.
Phiroze Jeejeebhoy Towers, 25 t h       Road, Mumbai - 400 020.
Floor, Dalal Street, Fort,
Mumbai - 400 001.
स्थामी रेखा सं ./ PAN : AAACCB6672L
(अऩीराथी /Appellant)                                  ..     (प्रत्मथी / Respondent)


        अऩीराथी की ओय से / Appellant by           :        Shri Rajesh Shah & Rohan
                                                           Shah
        प्रत्मथी की ओय से/ Respondent by          :        Shri M.C. Omi Ningshen, DR


     सन
      ु वाई की तायीख / Date of Hearing                      : 12.01.2017
     घोषणा की तायीख /Date of Pronouncement : 18 .01.2017

                        आदे श / O R D E R
PER D. KARUNAKARA RAO, AM:

This appeal filed by the assessee on 17.3.2015 is against the order of the CIT (A)-4, Mumbai dated 22.12.2014 for the assessment year 2007-2008. In this appeal, assessee raised the solitary ground and the same reads as under:-

"The Ld CIT (A) erred in confirming the action of the AO in disallowing the entire expenditure of building, repairs and maintenance amounting to Rs. 1,93,99,502/- while calculating "the income from house property". The Ld CIT (A) failed to appreciate that out of total expenditure of Rs. 1,93,99,502/- incurred by the appellant under the head "building repairs & maintenance" only Rs. 1,03,69,733/- were incurred in relation to the house property and balance amount of Rs. 90,29,769/- was for business activity. The business expense amounting to Rs. 90,29,769/- should have been allowed as a deduction and accordingly the AO may be directed to restrict the disallowance to Rs. 1,03,69,733/- and not Rs. 1,93,99,502/-."

2. At the outset, Ld Counsel for the assessee brought our attention to the above ground and mentioned that the only issue to be adjudicated by the Tribunal relates to the addition of Rs. 90,29,767/-, which is the part of gross amount of Rs. 1,93,99,502/-. Bringing our attention to the facts of the case, Ld Counsel for the assessee submitted that the assessee earned „rental income‟ and the same was shown as „business income‟. The same is in tune with the objects of the company.

Assessing Officer completed the assessment and passed order u/s 143(3) r.w.s 263 of the Act, wherein the assessed income was determined at Rs.41,00,22,065/-. In the assessment, AO taxed the said rental income under the head „income from house property‟ and allowed the standard deduction @ 30% of the rental income. Further, AO also disallowed a sum of Rs. 1,93,99,502/- on account of building repairs and maintenance. In the process, AO ignored the fact that the disallowable expenditure relatable to the „building repairs and maintenance‟ is not the entire sum of Rs. 1,93,99,502/-. AO should have restricted the disallowance to only Rs. 1,03,69,733/-. The balance amount of Rs. 90,29,769/- is completely unrelated to the "building repairs and maintenance". They actually relate to the AMC charges, maintenance charges, security expenses, water charges etc. These expenses are unconnected to the head of income of "property income". The particulars of page 43 of the paper book, as annexed „Schedule-M‟ of the P & L Account, are relevant in this regard.

3. On going through the above facts and the relevant material placed before us, we are of the opinion prima facie that the said expenditure cannot be linked to the "property income". However, we do not want to decide the issue just based on the name of the head of expenditure given on page 43 of the paper book. In our considered opinion, the matter should be remanded to the file of the AO for examining and fixing up the relationship between the expenditure and disallowability of the same under the head „income from house property‟. For this limited purpose, we direct the AO to decide the issue afresh after granting a reasonable opportunity of being heard as per the set principles of natural justice. In case, AO come to the conclusion that the said expenses amounting to Rs. 90,29,769/- is outside the purview of the head of income relating to the „income from house property, in our opinion, there is no need for disallowing the said amount. We order accordingly.

4. In the result, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 18th January, 2017.

       Sd/-                                                         Sd/-
(AMARJIT SINGH)                                             (D. KARUNAKARA RAO)
 JUDICIAL MEMBER                                             ACCOUNTANT MEMBER
                                              3


भुंफई Mumbai;     ददनांक        18.01.2017
व.नन.स./ OKK , Sr. PS

आदे श की प्रतिलऱपि अग्रेपिि/Copy of the Order forwarded to :

1. अऩीराथी / The Appellant

2. प्रत्मथी / The Respondent.

3. आमकय आमुक्त(अऩीर) / The CIT(A)-

4. आमकय आमुक्त / CIT

5. ववबागीम प्रनतननधध, आमकय अऩीरीम अधधकयण, भंफ ु ई / DR, ITAT, Mumbai

6. गार्ड पाईर / Guard file.

सत्मावऩत प्रनत //True Copy// आदे शानस ु ार/ BY ORDER, उि/सहायक िंजीकार (Dy./Asstt. Registrar) आयकर अिीऱीय अधिकरण, भंफ ु ई / ITAT, Mumbai