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Order u/s.254(1)of the Income-tax Act,1961(Act) लेखा सद�य लेखा सद�य राजे�� राजे�� केकेकेके अनुसार अनुसार PER RAJENDRA, AM- लेखा लेखा सद�य सद�य राजे�� राजे�� अनुसार अनुसार Challenging the order dated 11.04.2016 of CIT(A)-3, Mumbai the assessee had filed the present appeal. Assessee-, company, deriving income from house property and income from other sources filed its original return of income on 25.09.2012 declaring total income of Rs.6.30 lakhs.Initially return was processed u/s. 143(1) of the Act. Later on, the assessment was reopened as per the provisions of section 147 of the Act and the Assessing Officer (A.O) completed the assessment,u/s.143(3) r.w.s. 147, on 23.03.2015 determining income of the assessee at Rs.11.15 lakhs. 2.First Ground of appeal is about deduction in respect of air conditioning and other charges. During the assessment proceedings, the AO called upon the assessee to submit the copy of bill in respect of expenditure incurred for air conditioning and other charges.After considering the details filed by the assessee in that regard the AO made a disallowance of Rs.2.94 lakhs. He observed that the assessee had not produced bills /vouchers for the expenses claimed. 2.1.Aggrieved by the order of AO the assessee preferred an appeal before the First Appellate Authority (FAA). Before him, it was argued that it had shifted its office, that paper related with the expenditure were not traceable, that it was trying to locate the same. As the assessee
4290/M/16(12-13) Sulakshana Securities Ltd. had not filed any evidence of incurring of expenditure before the FAA, so, he upheld the order of the AO.
2.2.During the course of hearing before us, the Authorised Representative (AR) stated that identical issue was restored back to the file of the AO by the Tribunal in AY.s 2006-07 and 2009-10 (In ITA/7271/Mum/2011 dt.11.4.14 and ITA/6427/Mum/2013 Dt.27.5.15) We are reproducing para No.4-5 at page-3&4 of the order for AY 2009-10 (supra) and it reads as under:- “4. Before us, at the outset, the Ld. A.R. of the assessee has stated that the issue for the earlier assessment year 2006-07 had travelled up to the level of Tribunal. We have perused the Tribunal’s order for the assessment year i.e. A.Y. 2006-07 passed in dated 11.04.2014. We find that the Tribunal, while adjudicating the identical issue for A.Y. 2006-07, has restored the matter to the file of the AO observing as under: “7. We have carefully considered the rival contentions and perused the material available on record. Insofar as the issue, whether receipt from air conditioning and other charges are to be assessed under the head "income from other sources" or under the head "income from h o u s e p r o p e r t y " i s c o n ce rn ed , t h e s a me h a s b e en se t t l ed b y t h e Tribunal in favour of the assessee in assessee's own case, by holding that such receipts are to be assessed under the head "income from other sources", which has been accepted by the learned Commissioner (Appeals) also. However, the learned Commissioner (Appeals), without analysing the nature of expenditure incurred by the assessee in relation to Mafatlal Centre building, has simply directed the Assessing Officer to allow electricity charges only. Such a direction is wholly misconceived as all the necessary expenditures which are attributable to the earning of the receipts which are shown under the head "income from other sources" has to be considered under section 57(iii). The Tribunal also gave similar directions to the Assessing Officer to allow the expenditure after examining the same under section 57. In this year also, consistent with the stand taken by the Tribunal, we set aside the impugned order passed by the learned Commissioner (Appeals) and restore back the issue to the file of the Assessing Officer and direct him to consider the expenses as shown by the assessee and to see it s deductibility under section 57 of the Act. Thus, the grounds raised by the assessee are allowed for statistical purposes.”
5. Since the facts are identical and the Ld. CIT(A) in the impugned order had also followed the decision of his predecessor relevant to A.Y. 2006-07, hence in view of the fact that the issue has been considered and restored by the Tribunal to the file of the AO for A.Y. 2006-07, we accordingly set aside the impugned order of the Ld. CIT(A) and restore the issue to the file of the AO in terms of the direction given by the Tribunal on identical facts in earlier assessment year 2006-07 and direct the AO to decide it accordingly.” Respectfully following the same,issue is restored back to the file of AO for fresh adjudication who will decide the issue after affording a reasonable opportunity of hearing to the assessee. Ground No.1 is decided in favour of the assessee in part.
3.Ground of appeal No.2 is about deduction of expenditure incurred towards fee, legal and professional fee for maintaining corporate status amounting to Rs.1.91 lakhs. During the assessment proceedings the AO found that the assessee had shown expenses of Rs.1,40,450/- and Rs.50,628/- under the heads audit fee and professional fee respectively. He directed the assessee to explain as to why the said expenditure should not be disallowed.
4290/M/16(12-13) Sulakshana Securities Ltd.
3.1.After considering the submission of the assessee the AO held that the main activity /source of income of the assessee was income from House Property and income from other sources, that it had been allowed deduction in respect of House Property as per the provisions of the Act, that the expenditure claimed by it towards audit and legal charges could not be allowed, as the assessee did not have business income for the year under consideration. During the appellate proceedings the FAA upheld the order of the AO holding that the assessee had not shown any business income for the year under consideration.
3.2.During the course of hearing before us the Authorised Representative (AR) argued that expenditure was incurred for maintaining corporate status and same had to be allowed u/s.57 of the Act. He referred to the cases of Rampur Timber and Turnery Co. Ltd. (129ITR58); Preimus Investments and Finance Ltd. (ITA 4879/Mum/2012, AY 06-07 dt.13.5.15); Ganga Properties Ltd.(199ITR094) and Banaras Electric Light and Power Co.Ltd(204ITR804); Nakodar Bus service (P.)Ltd.(179ITR506). The Departmental Representative (DR) supported the order of the FAA.
3.3.We have heard the rival submissions and perused the material available before us. In the case of Rampur Timber and Turnery Co. Ltd. (supra), the Hon'ble High Court of Allahabad had dealt with the provisions of section 57(iii) of the Act.In that matter the company had discontinued its business and had claimed certain expenditures under the heads miscellaneous expenses, salary, legal expenses for retaining the status of company .The Hon’ble Court held that such expenditure had to be allowed as same were incurred wholly and exclusively for the purpose of making/earning income.Respectfully following the above expenditure was incurred for retaining the corporate status of the assessee, hence, same is allowable.Reversing the order of the FAA we decide effective Ground of appeal in favour of the assessee .
As a result, appeal filed by the assessee stands partly allowed. फलतः िनधा�रती �ारा दािखल क� गई अपील अंशतःमंजूर क� जाती है. Order pronounced in the open court on 12th April, 2017. आदेश क� घोषणा खुले %यायालय म' (दनांक 12 अ)ैल , 2017 को क� गई । Sd/- Sd/- (राम लाल नेगी राम लाल नेगी राम लाल नेगी / Ram Lal Negi) (राजे�� / Rajendra) राम लाल नेगी �याियक सद�य / JUDICIAL MEMBER लेखा लेखा लेखा सद�य लेखा सद�य सद�य / ACCOUNTANT MEMBER सद�य मुंबई Mumbai; (दनांक/Dated : 12 .04 .2017. Jv.Sr.PS. आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत/Copy of the Order forwarded to : आदेश आदेश आदेश क� क� �ितिलिप �ितिलिप अ�ेिषत अ�ेिषत 1.Appellant /अपीलाथ+ 2. Respondent /),यथ+ 3
4290/M/16(12-13) Sulakshana Securities Ltd.