ITAT deletes Disallowance made toward Rental Expenses Incurred for Property taken on Rent for Business Purpose [Read Order]
![ITAT deletes Disallowance made toward Rental Expenses Incurred for Property taken on Rent for Business Purpose [Read Order]](https://www.taxscan.in/wp-content/uploads/2023/11/ITAT-Disallowance-toward-Rental-Expenses-Incurred-for-Property-Rent-for-Business-Purpose-TAXSCAN.jpg "ITAT deletes Disallowance made toward Rental Expenses Incurred for Property taken on Rent for Business Purpose [Read Order]")
The Income Tax Appellate Tribunal (ITAT), Delhi bench, deleted the disallowance made towards the rental expenses incurred for a property taken on rent for business purposes. The assessee, U & I Business Services Pvt. Ltd., is a resident corporate entity engaged in the business of leasing property. During the assessment proceedings, the Assessing Officer (AO) noted that the assessee...
The Income Tax Appellate Tribunal (ITAT), Delhi bench, deleted the disallowance made towards the rental expenses incurred for a property taken on rent for business purposes.
The assessee, U & I Business Services Pvt. Ltd., is a resident corporate entity engaged in the business of leasing property. During the assessment proceedings, the Assessing Officer (AO) noted that the assessee had paid rent of Rs. 60,00,000 to two persons. Holding the view that the concerned premises were not used for the purpose of the assessee's business, the Assessing Officer disallowed the rental expenses of Rs. 60,00,000.
Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeal) CIT(A), who allowed the appeal. Subsequently, the revenue filed an appeal before the tribunal.
The tribunal observed that out of the three properties taken on rent, one of the properties was used as the registered office and business premises of the assessee. This was confirmed by documents available from the Ministry of Corporate Affairs' website, as well as copies of bills from various vendors addressed to the said business premises.
Therefore, since the property was being used for business purposes, the rent paid of Rs. 48,00,000 relating to that property had to be allowed as business expenses.
After reviewing the facts and records, the two-member bench of Dr. B.R.R. Kumar (Accountant Member) and Saktijit Dey (Vice-President) observed that one of the properties taken on rent was actually used for the business of the assessee. Consequently, the bench directed the deletion of the disallowance made towards the rental expenses incurred for the property taken on rent for business purposes.
Therefore, the bench dismissed the appeal filed by the revenue. Sapna Bhatia, counsel, appeared for the revenue, and NL Anand, counsel, appeared for the assessee.
To Read the full text of the Order CLICK HERE
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