The Income Tax Appellate Tribunal (ITAT) Kolkata Bench held that amenities provided to tenants of house property compute under the head of Income from House Property.Therefore the bench deleted the double addition made by the assessing officer and also deleted computing the income under the head ‘Profit and gains from business.
Assessee, Bagaria More Co. Ltd filed an appeal against the order of National Faceless Appeal Centre before the tribunal .The Appeal was filed against the double addition made by Assessing Officer on account of cost of amenities provided to tenants of assessee’s house property while computing income under the head ‘Profit and gains from business.”
Before the bench ,P. R. Kothari, counsel for the assessee submitted that the assessee had suo moto made disallowance of Rs.9973966/- on account of cost of amenities to the tenants out of his business/professional income.However the CPC again disallowed the said amount and assessed the income from profit and gains from profession.
Further the CIT(A) however considered the said disallowance out of the income from house property and confirmed the addition.
B. K. Singh, Counsel for the revenue supported the decision of the lower authorities
The Tribunal after considering the arguments has consistently allowed the claim of the assessee in respect of expenditure incurred on amenities provided to the tenants duly considering the nature of services rendered to the tenants in the form of repair and maintenance of lift and other electrical installations apart from the standard deduction in relation to the income from house property under Section 24 of the Income Tax Act.
After considering the facts and circumstances of the case and also explanation of the assessee two member bench of Sanjay Garg ( Judicial Member) and Dr. Manish Borad,( Accountant Member) held that amenities provided to tenants of house property compute under the head of Income from House Property.
Income From house rent can not be claimed as business expenditure, Hence there was no question of disallowance of the same from business expenditure.
Therefore the bench allowed the appeal filed by the assessee.
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