ARMASOL PROPERTIES PVT. LTD. ,KOLKATA vs. ITO,WARD-12(3), KOLKATA. , KOLKATA

आयकर अपीलीय अधिकरण कोलकाता 'एसएमसी' पीठ, कोलकाता में IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA ‘SMC’ BENCH, KOLKATA श्री राजेश कुमार, लेखा सदस्य एवं श्री संजय शमाा, न्याधयक सदस्य के समक्ष Before SRI RAJESH KUMAR, ACCOUNTANT MEMBER & SONJOY SARMA, JUDICIAL MEMBER I.T.A. No.: 772/KOL/2023 Assessment Year: 2016-17 Armasol Properties Pvt. Ltd........…………………………Appellant [PAN: AAHCA 2901 J] Vs. ITO, Ward-12(3), Kolkata…………………………………Respondent Appearances by: Assessee represented by – Sh. Manish Tiwari, FCA. Department represented by – Sh. B.K. Singh, JCIT, Sr. D/R. Date of concluding the hearing : December 7th, 2023 Date of pronouncing the order : January 5th, 2024 ORDER Per Rajesh Kumar, Accountant Member: This appeal preferred by the assessee is against the order of Learned Commissioner of Income-tax (Appeals)- NFAC, Delhi [hereinafter referred to Ld. ‘CIT(A)’] dated 30.06.2023 for the Assessment Year (in short ‘AY’) 2016-17.

I.T.A. No.: 772/KOL/2023 Assessment Year: 2016-17 Armasol Properties Pvt. Ltd. 2. Ground no. 1 is general in nature and does not require a specific adjudication. 3. The issues raised in ground no. 2 is against the confirmation of disallowance of brought forward losses of Rs. 3,70,075/- which was not pressed at the time of hearing and accordingly the same is dismissed as not pressed. 4. The issue raised in ground no. 3 is against the confirmation of disallowance of Rs. 5,33,759/- by ld. CIT(A) as made by the AO in respect of expenses charged in the profit and loss account under various heads. 5. The facts in brief are that the assessee is a private limited company and derives income from business as well as from house property. During the year the assessee did not have any business income albeit it needs to maintain its office and minimum staff in order to keep the office in a running condition. The assessee has only income from house property. During the year the assessee returned loss from business of Rs. 5,66,441/- and income from house property of Rs. 4,71,653/- thereby the gross total income worked out to be negative i.e. Rs. (-)94,788/-. The Assessing Officer (in short ld. 'AO') during the course of assessment proceedings observed that the house property is the only source of income of the assessee and assessee has availed standard deduction to the tune of 30% and thus offered net income from house property Rs. 4,71,653/-. The AO observed that the assessee has also claimed certain expenses in the profit and loss account which do not relate to the house property income and accordingly

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I.T.A. No.: 772/KOL/2023 Assessment Year: 2016-17 Armasol Properties Pvt. Ltd. the AO held that the assessee is not entitled to claim the set off of these expenses against the house property income and consequently, a sum of Rs. 5,33,759/- was disallowed out of total expenses claimed of Rs. 5,53,684/- and added back to the income of the assessee. 6. In the appellate proceedings ld. CIT(A) observed that the assessee is engaged in the business of real estate and letting out of properties on rent and has shown only income from house property of Rs. 4,71,653/-. Ld. CIT(A) noted that the assessee has claimed Rs. 5,53,684/- in the profit and loss account and since the same were not allowable u/s 24(a) of the Income Tax Act, 1961 (in short the 'Act') and rightly disallowed by the AO. 7. After hearing the rival contentions and perusing the material on record, undisputed facts are that the assessee is a private limited company engaged in the development of the property and leasing/renting. During the year the assessee incurs expenses on running and maintenance of its office to the tune of Rs. 5,53,684/- . The authorities below has disallowed the expenses to the tune of Rs. 5,33,759/- out of the said expenses on the ground that these expenses were not allowable u/s 24(a) of the Act by ignoring the fact that the assessee is a private limited company and needs to maintain its office in order to keep it running. The assessee has also filed a computation of total income in which the income from business as well as income from house property have been shown separately by making necessary adjustments. The expenses claimed in the profit and loss account have been shown under the head income from business and a net loss of Rs. 6,66,441/- was

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I.T.A. No.: 772/KOL/2023 Assessment Year: 2016-17 Armasol Properties Pvt. Ltd. claimed whereas the income under the head house property was shown at Rs. 4,71,653/- after making allowances for property taxes paid and standard deduction u/s 24(a) of the Act. In our opinion, both the authorities below have failed to appreciate and understand the fact that the assessee is a company and has to incur certain expenses to keep its office running. The assessee has rightly claimed the loss of Rs. 5,66,441/- which has to set off against the house property income. Accordingly, we set aside the order of ld. CIT(A) and direct the AO to delete the addition by allowing loss from bsuiness. 8. In the result, the appeal filed by the assessee is allowed. Kolkata, the 5th January, 2024. Sd/- Sd/- [Sonjoy Sarma] [Rajesh Kumar] Judicial Member Accountant Member Dated: 05.01.2024 Bidhan (P.S.) Copy of the order forwarded to: 1. Armasol Properties Pvt. Ltd., 13, Lindsay Tower, Nellie Sengupta Sarani, Kolkata-700 087. 2. ITO, Ward-12(3), Kolkata. 3. CIT(A)-NFAC, Delhi. 4. CIT- 5. CIT(DR), Kolkata Benches, Kolkata. //True copy // By order

Assistant Registrar ITAT, Kolkata Benches Kolkata Page 4 of 4