BOMBAY STOCK EXCHANGE LTD, MUMBAI V. ADDL CIT 2(1), MUMBAI

ITA 152/MUM/2016

• Counselvise Citation: [2019] 116 COUNSELVISE.COM (IT) 1717 (ITAT-MUMBAI)
• Duration Of Justice: 3 year(s) 4 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-05-2019
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: Not Allotted
• Assessment Year: 2010-2011
• Appeal Filed On: 11-01-2016
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Keywords: Business income; Depreciation; Business expenditure; Opportunity of being heard; Earning of tax free income; Rule 8D; Set aside
• Section: 143(3); 14A; 10

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH B , MUMBAI BEFORE SHRI C.N. PRASAD, HON'BLE JUDICIAL MEMBER AND SHRI RAJESH KUMAR , HON'BLE ACCOUNTANT MEMBER ITA NO. 5748/ MUM/201 5 (A.Y: 2010 - 11) & ITA.NO. 4820/MUM/2016 (A.Y: 2010 - 11) DCIT 2 (1) (1) ROOM NO. 561 , 5 TH FLOOR, AAYAKAR BHAVAN, M.K. ROAD, MUMBAI - 400 020 V. M/S. BOMBAY STOCK EXCHANGE LTD., 25 TH FLOOR, PHIROZE JEEJEEBHOY TOWER S , DALAL STREET, FORT, MUMBAI 400 001 PAN: AA CCB 6672 L (APPELLANT) (RESPONDENT) ITA.NO. 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., {NOW KNOWN AS BSE LTD., } 25 TH FLOOR, PHIROZE JEEJEEBHOY TOWERS, DALAL STREET, FORT, MUMBAI 400 001 PAN: AACCB 6672 L V. DCIT 2(1)(1) ROOM NO. 561, 5 TH FLOOR AAYAKAR BHAVAN, M.K. ROAD MUMBAI - 400 020 (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI NIRAJ SHETH DEPARTMENT BY : SHRI RAVINDRA DATE OF HEARING : 04 .04.2019 DATE OF PRONOUNCEMENT : 31 .0 5 .2019 2 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., O R D E R PER C. N. PRASAD (JM) 1. THESE THREE APPEALS ARE FILED BY THE REVENUE AND ASSESSEE FOR THE ASSESSMENT YEAR 2010 - 11 AGAINST THE ORDER OF THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) 4, MUMBAI [HEREINAFTER IN SHORT LD.CIT(A)] DATED 08.09.2015. 2. ON A PERUSAL OF THE APPEALS FILED BY THE REVENUE IN ITA.NO. 5748/MUM/2015 AND ITA.NO. 4820/MUM/2016, WE FIND THAT THE REVENUE HAS FILED MULTIPLE APPEALS FOR THE A.Y. 2010 - 11 AGAINST THE ORDER OF THE LD.CIT(A) - 4 DATED 08.09.2015. ONE APPEAL WAS FILED ON 22.12.2015 IN ITA.NO. 5748/ MUM /2015 AND THE OTHER APPEAL WAS FILED ON 19.07.2016 IN ITA.NO. 4820/ MUM /2016 WITH A DELAY OF 206 DAYS. IN BOTH THESE APPEALS THE REVENUE RAISED THE FOLLOWING GROUND: - 2. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE AND IN LAW, THE CIT(A) HAS ERRED IN DIRECTING THE AO TO ALLOW SECURITY AND WATER CHARGES OVER AND ABOVE STANDARD DEDUCTION OF 30% ALLOWED TO THE ASSESSEE AS PER THE PROVISIONS OF SECTION 24(A), HOLDING THAT THESE EXPENSES SHOULD BE ALLOWED ON THE GROUND THAT HE ASSESSEE IS PECULIAR ASSESSEE AND NOT LIKE A GENERAL AS SESSEE. 3. SINCE THE REVENUE FILED TWO APPEALS FOR THE A.Y. 2010 - 11 AGAINST THE ORDER OF THE LD.CIT(A) DATED 08.09.2015 , ONE ON 22.12.2015 AND THE OTHER ON 19.07.2016 , THE APPEA L FILED ON 22.12.2015 IS TAKEN ON RECORD AND THE APPEAL FILED ON 19.07.2016 IN ITA.NO. 4820/MUM/2016 IS DISMISSED TREATING THE SAME AS MULTIPLE APPEAL. 3 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., 4. IN SO FAR AS THE ASSESSEE APPEAL IS CONCERNED I.E. ITA.NO. 152/ MUM /2016, ASSESSEE RAISED THE FOLLOWING GROUNDS: - 1) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DISALLOWING . 7,97,80,444/ - U/S. 14A R.W.R. 8D: A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN CONFIRMING THE ACTION OF THE ASSESSING OFFICER OF DISALLOWANCE OF .7,97,80,444/ - U/S.14A R.W.R 8D AS AGAINST THE AMOUNT DISALLOWED BY THE APPELLANT IN THEIR RETURN OF INCOME OF .54,18,960/ - . THE L EARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT THE APPELLANT HAD WORKED OUT THE DISALLOWANCE U/S.14A BY ADOPTING A RATIONAL, OBJECTIVE AND SCIENTIFIC METHOD. B) WITHOUT PREJUDICE TO THE ABOVE, IT IS SUBMITTED THAT THE LEARNED COMMISS IONER OF INCOME TAX (APPEALS) HAS ALSO DIRECTED THE ASSESSING OFFICER TO VERIFY THE TOTAL VALUE OF INVESTMENTS NOT CAPABLE OF EARNING EXEMPT INCOME AND IF THE CONTENTION OF THE APPELLANT IS FOUND TO BE CORRECT, THE DISALLOWANCE U/S. 14A R.W.R. 8D SHALL BE RESTRICTED TO .1,47,57,377/ - . THE ASSESSING OFFICER BE DIRECTED TO RESTRICT THE DISALLOWANCE U/S.14A TO RS. 54,18,960/ - AS WORKED OUT BY THE APPELLANT AND OFFERED TO TAX IN THE RETURN OF INCOME. C) FURTHER YOUR APPELLANTS SUBMIT THAT THE ASSESSING OFFICER HAS NOT APPLIED HIS MIND AND HAS SUMMARILY REJECTED THE APPELLANTS WORKING CARRIED OUT U/S.14A R.W.R 8D. 2) A) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN PARTLY CONFIRMING THE ACTION OF THE ASSESSING OFFICER IN DISALLOWING THE EXPENDITURE OF BUILDING REPAIRS AND MAINTENANCE AMOUNTING OF .1,99,36,710/ - OUT OF TOTAL EXPENDITURE OF .3,22,89,187/ - WHIL E CALCULATING 'THE INCOME FROM HOUSE PROPERTY'. THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) FAILED TO APPRECIATE THAT OUT OF TOTAL EXPENDITURE OF .3,22,89,187/ - INCURRED BY THE APPELLANT UNDER THE HEAD 'BUILDING REPAIRS & MAINTENANCE', ONLY . 1,30,03 ,201/ - WERE INCURRED IN RELATION TO THE ELECTRICAL MAINTENANCE EXPS . 55,66,231/ - + SECURITY EXPS 80,30,637/ - + WATER CHARGES 43,21,840/ - ] AND NOT . 1,99,36,710/ - . 3) THE LEARNED COMMISSIONER OF INCOME TAX (APPEALS) ERRED IN DIRECTING THE ASSESSING OFF ICER TO RECALCULATE THE INTEREST U/S.234C. YOUR APPELLANTS SUBMIT THAT INTEREST U/S. 234C HAS TO BE CHARGED ON THE BASIS OF RETURNED INCOME. AS PER THE RETURN OF INCOME FILED BY YOUR APPELLANTS INTEREST U/S.234C COMES TO .60,52,602/ - , WHEREAS AS PER THE T AX COMPUTATION FORM, INTEREST U/S.234C IS CHARGED AT .74,50,677/ - . FURTHER YOUR APPELLANTS SUBMIT THAT, INTEREST U/S.234C IS CONSEQUENTIAL IN NATURE. THEREFORE INTEREST U/S.234C IS CHARGEABLE ONLY TO AN EXTENT OF .60,52,602/ - AND THE EXCESS INTEREST OF .13,98,075/ - OUGHT TO BE DELETED. 5. GROUND NO.1 OF THE GROUNDS OF APPEAL OF THE ASSESSEE IS DIRECTED AGAINST CONFIRMING THE DISALLOWANCE MADE U/S. 14A OF THE ACT AT .7,97,80,44 4 / - AND WITHOUT PREJUDICE IT IS THE CONTENTION OF THE ASSESSEE 4 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., THAT DISALLOWANCE U/ S. 14A R.W. RULE 8D OF I.T RULES SHALL BE RESTRICTED TO . 1 , 47 , 57 , 377/ - OR . 54 , 18 , 960/ - AS WORKED OUT BY THE ASSESSEE. 6. BRIEFLY STATED THE FACTS ARE THAT, THE ASSESSING OFFICER WHILE COMPLETING THE ASSESSMENT NOTICED THAT ASSESSEE MADE INVESTMENTS IN LONG TERM INVESTMENTS BEING UNQUOTED SHARES, BONDS, NON - CONVERTIBLE DEBENTURES, UNITS OF GROWTH ORIENTED SCHEMES OF MUTUAL FUNDS AND THE INCOME FROM WHICH DO NOT FORM PART OF TOTAL INCOME AND IS EXEMPT UNDER THE PROVISIONS OF SECTION 10 OF THE ACT. HE ALS O NOTICED THAT ASSESSEE HAS DEBITED VARIOUS EXPENSES IN ITS PROFIT AND LOSS ACCOUNT UNDER VARIOUS HEADS FOR EARNING BOTH TAXABLE AND EXEMPT INCOMES. HE NOTICED THAT ASSESSEE ITSELF DISALLOWED AN AMOUNT OF .54,18,960/, HOWEVER THE SAID DISALLOWANCE IS NOT AS PER SECTION 14A R.W. RULE 8D OF I.T. RULES. ASSESSEE WAS REQUIRED TO JUSTIFY THE DISALLOWANCE. ASSESSEE MADE SUBMISSIONS AND WITHOUT PREJUDICE ASSESSEE ALSO FILED SUOMOTO WORKING OF DISALLOWANCE U/S. 14A R.W. RULE 8D AT .7,97,80 ,444/ - . AFTER CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE WORKING SUBMITTED IN THE COURSE OF THE ASSESSMENT PROCEEDINGS THE ASSESSING OFFICER WORKED OUT THE DISALLOWANCE AT .7,43,61,484/ - BASED ON THE WORKING SUBMITTED BY THE ASSESSEE AND AFTER EXCLU DING THE DISALLOWANCE OF . 54,18,960/ - WHICH WAS ALREADY MADE IN THE RETURN. 5 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., 7. ON APPEAL THE LD.CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE THAT THE AVERAGE VALUE OF TOTAL INVESTMENTS WAS WRONGLY ADOPTED AT .1531.75 CRORES INSTEAD OF CONSIDERING AVERAGE VALUE OF INVE STMENTS WHOSE INCOME DOES NOT FORM PART OF TOTAL INCOME IS ONLY .295.14 CRORES , THE DISALLOWABLE EXPENDITURE CAME TO BE WORKED OUT AT . 1,47,57,377/ - , IF THESE CORRECT FIGURES WERE TAKEN INTO CONSIDERATION T HE L D.CIT(A) DIRECTED THE ASSESSING OFFICER TO EXAMINE THE CONTENTION OF THE ASSESSEE AS THE FACTS REQUIRED VERIFICATION AND FACTUAL ANALYSES OF THE VALUE OF TOTAL INVESTMENTS . HE FINALLY HELD THAT IF THE CONTENTION OF THE ASSESSEE IS FOUND TO BE CORRECT THEN THE DI SALLOWANCE OF EXPENDITURE U/S. 14A R.W. RULE 8D SHOULD BE RESTRICTED TO .1,47,57,377/ - AND FURTHER REDUCED BY THE DISALLOWANCE ALREADY SHOWN BY THE ASSESSEE AT .54,18,960/ - IN THE RETURN . 8. BEFORE US, LD. COUNSEL FOR THE ASSESSEE REITERATED THE SUBMISSIONS MADE BEFORE T HE LOWER AUTHORITIES. HE FURTHER REFERRING TO PAGE NO. 102 OF THE PAPER BOOK SUBMITS THAT ASSESSEE HAS GIVEN DETAILS OF EXPENDITURE WHICH WERE DISALLOWED IN THE RETURN OF INCOME BEING COSTS OF EMPLOYEES IN TREASURY SECTION AS THIS SECTION ONLY DOES THE IN VESTMENT BUSINESS. REFERRING TO THE PAGE NOS. 103 AND 114 OF THE PAPER BOOK IT IS SUBMITTED THAT THE TRIBUNAL FOR THE A.Y. 2007 - 08 TO A.Y. 2009 - 10, ALLOWED THE CLAIM OF THE ASSESSEE OBSERVING THAT ASSESSING OFFICER HAS NOT POINTED ANY 6 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., DEFECT OR INCORRECTNESS IN THE CLAIM OF THE ASSESSEE. LD. COUNSEL FOR THE ASSESSEE SUBMITS THAT THE TRIBUNAL OBSERVED THAT THERE IS NO SATISFACTION RECORDED BY THE ASSESSING OFFICER WHILE APPLYING RULE 8D OF I.T. RULES. RELIANCE WAS ALSO PLACED ON THE DECISION O F ASSESSEES OWN CASE FOR THE A.Y. 2013 - 14 IN ITA.NO. 6504/MUM/2017 DATED 28.01.2019 WHEREIN THE TRIBUNAL CONSIDERED THE SUOMOTO DISALLOWANCE MADE BY THE ASSESSEE AND IN THE ABSENCE OF NO SATISFACTION RECORD REJECTING THE CLAIM OF THE ASSESSEE BY THE ASSES SING OFFICER THE DISALLOWANCE WAS DELETED. 9. LD. DR VEHEMENTLY SUPPORTED THE ORDERS OF THE AUTHORITIES BELOW. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. IN SO FAR AS NON - RECORDING OF SATISFACTION IS CONCERNED , WE HAVE O BSERVE D THAT THE ASSESSEE IN THE COURSE OF ASSESSMENT PROCEEDINGS VIDE LETTER DATED 24.12.2012 SUBMITTED ITS SUOMOTO WORKING , THOUGH WITHOUT PREJUDICE CLAIM , COMPUTING THE DISALLOWANCE OF EXPENDITURE AT .7,97,80,444/ - . THE ASSESSING OFFICER WHILE COMP LETING THE ASSESSMENT CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AS WELL AS THE SUOMOTO WORKING FURNISHED BY THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS COMPUTED THE DISALLOWANCE ACCEPTING THE SUOMOTO DISALLOWANCE COMPUT ED THE DISALLOWANCE U /S. 14A R.W. RULE 8D TAKING THE BASIS OF SUOMOTO DISALLOWANCE MADE BY THE ASSESSEE AND AFTER 7 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., REDUCING THE DISALLOWANCE WHICH WAS MADE IN THE RETURN ARRIVED AT THE DISALLOWANCE OF .7,43,61,484/ - . IN SUCH CIRCUMSTANCES WE OBSERVE THAT THERE WAS NO OCCASION FOR THE ASSESSING OFFICER TO LOOK INTO THE CORRECTNESS OF THE SUOMOTO DISALLOWANCE MADE IN THE RETURN OF INCOME. BUT HE HAS GONE BY THE ALTERNATIVE WORKING FURNISHED BY THE ASSESSEE IN THE COURSE OF THE ASSESSMENT PROCEEDINGS. THUS, WE OBSERVE THAT THE ASSESSING OFFICER HAD NO OCCASION TO RECORD THE SATISFACTION REJECTING THE CLAIM OF THE ASSESSEE TO ACCEPT THE SUOMOTO DISALLOWANCE AS MADE IN THE RETURN OF INCOME. THUS, IN THE PECULIAR FACTS OF THIS CASE THIS CONTENTION OF THE ASSESSEE THAT ASSESSING OFFICER HAS NOT RECORDED ANY SATISFAC TION ON SUOMOTO DISALLOWANCE MADE IN THE RETURN HAS NO RELEVANCE IN R EGARD TO THE FACTS OF THE CASE. HENCE THIS CONTENTION IS REJ ECTED. 11. COMING TO THE DIRECTION GIVEN BY THE LD.CIT(A), WE OBSERVE THAT THE LD.CIT(A) IN FACT ACCEPTED THE SUBMISSIONS MADE IN THE COURSE OF THE APPELLATE PROCEEDINGS THAT THE DISALLOWANCE SHALL WORK OUT TO ONLY .1,47,57,377/ - IF THE AVERAGE VALUE OF TOTAL INVESTMENT WHOSE INCOME DOES NOT FORM PART OF THE TOTAL INCOME ARE CONSIDERED AT .295.14 CRORES AS AGAINST AVERAGE VALUE OF TOTAL INVESTMENTS OF .1531.75 CRORES ADOPTED BY THE ASSESSEE WHILE SUBMITTING THE SUOMOTO WORKING TO ASSESSING OFFICER . CONSIDERING THE SUBMISSIONS OF THE ASSE SSEE WHICH WERE MADE IN THE COURSE OF THE APPELLATE PROCEEDINGS THE LD.CIT(A) 8 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., DIRECTED THE ASSESSING OFFICER TO EXAMINE THE CONTENTI ONS VIS - - VIS TOTAL INVESTMENTS, S INCE THE FACTS REQUIRE VERIFICATION AND FACTUAL ANALYSIS AND FINALLY DIRECTED TO RESTRICT THE DISALLOWANCE TO .1,47,57,377/ - IF THE CONTENTIONS OF THE ASSESSEE ARE PROVED TO BE CORRECT. HE ALSO DIRECTED TO EXCLUDE THE SUOMOTO DISALLOWANCE OF . 54,18,960/ - MADE IN THE RETURN FROM .1,47,57,377/ - WHICH WORKING WAS GIVEN BY THE ASSESSEE. IN THE CIRCUMSTANCES, WE DO NOT F IND ANY VALID REASON TO INTERFERE WITH THE FINDINGS OF THE LD.CIT(A). THE GROUND RAISED BY THE ASSESSEE STATING THAT LD.CIT(A) CONFIRMED THE DISALLOWANCE OF .7,97,80,444/ - IS FACTUALLY WRONG AS THE LD.CIT(A) HAD IN FACT SET ASIDE TO EXAMINE THE CONTENTION OF THE ASSESSEE AND TO RECOMPUTE THE DISALLOWANCE U/S. 14A R.W. RULE 8D OF I.T. RULES. THUS, THE GROUND S ON THIS ISSUE ARE DISMISSED. 12. COMING TO THE G ROUND NO.2 OF GROUNDS OF APPEAL , THE ASSESSING OFFICER W HILE COMPLETING THE ASSESSMENT NOTICED THAT ASSESSEE RECEIVED RENT AND MAINTENANCE CHARGES OF .13 , 51 , 33 , 935/ - AND OFFERED THE SAME UNDER THE HEAD INCOME FROM BUSINESS . ASSESSEE WAS REQUIRED TO EXP LAIN AS TO WHY THE RENTAL INCOME SHOULD NOT BE ASSESSED UNDER THE HE AD INCOME FROM HOUSE PROPERTY. THE ASSESSEE SUBMITTED THAT THE PREMISES HAVE BEEN GIVEN TO MEMBERS PROVIDING INFRASTRUCTURE FACILITIES, THE PROPERTY RENTED TO THE MEMBERS/BROKERS IS NOT FOR HABITATION BUT FOR CARRYING OUT THE BUSINESS ACTIVITIES . THE ASSESSING OFFICER AFTER ANALYZING 9 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., THE LEASE AGREEMENTS ENTERED INTO BY THE ASSESSEE WITH THE TENANTS AND PL ACING RELIANCE ON THE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE OF SHAMBHU INVESTMENTS PVT. LTD., V. CIT [ 263 ITR 143] HELD THAT THE MONTHLY RENT RECEIVED BY THE ASSESSEE FROM LETTING OUT OF PREMISES WITH FURNITURE AND FIXTURES IS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND ACCORDINGLY HE COMPUTED THE INCOME FROM HOUSE PROPERTY AFTER ALLOWING PROPERTY TAXES PAID AND 30% TOWARDS REPAIRS. THE CLAIM OF THE ASSESSEE TOWARDS BUSINESS EXPENSES TOWARDS REPAIRS AND MAINTEN AN CE , DEPRECIATION ETC., FROM SUCH RENTAL AND MAINTENANCE CH A RGES WERE DENIED BY THE ASSESSING OFFICER SINCE THE INCOME WA S ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROPERTY . 13. ON APPEAL THE LD.CIT(A) CONSIDERING THE SUBMISSIONS OF THE ASSESSEE AND THE ACCEPTANCE OF ASSESSEE THAT THE RENT AND MAINTEN AN CE CHARGES A RE INCOME FROM HOUSE PROPERTY AND NOT BUSINESS INCOME , HE SU STAINED THE ACTION OF THE ASSESSING OFFICER IN ASSESSING THE SAID RENTAL INCOME AND MAINTENANCE CHARGES UNDER THE HEAD INCOME FROM HOUSE PROPERTY . HOWEVER , IN SO FAR AS VARIOUS EXPENSES INCURRED AS TABULATED IN PARA NO . 4.1 OF THE LD.CIT(A) ORDER, T HE LD.CIT(A) HELD THAT ELECTRICAL MAINTENANCE EXPENSES, SECURITY EXPENSES AND WATER CHARGES ARE INCIDENTAL TO MAINTAIN , UPKEEP AND TO MAKE WOR KABLE CONDITION OF THE BUILDING, T HE SAME WERE ALLOWED. HOWEVER, AT THE END , HE DIRECTED THE 10 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., ASSESSING OFFICER TO A LLOW .1 , 23 , 52 , 477/ - [SECURITY EXPENSES + WATER EXPENSES ] . 14. SUBSEQUENTLY ASSESSEE FILED A PETITION FOR RECTIFICATION BRINGING TO THE NOTICE OF THE LD.CIT(A) THAT WHILE COMPUTING THE ALLOWABLE EXPENSES AT . 1 , 23 , 52 , 477/ - THE ELECTRICAL MAINTENANCE EXPENSES OF . 55 , 66 , 231/ - WAS INADVERTENTLY OMITTED TO BE CONSIDERED. THE LD.CIT(A) BY ORDER DATED 17.05.2016 RECTIFIED THIS MISTAKE AND RECOMPUTED THE ALLOWABLE EXPENDITURE AT . 1 , 79 , 18 , 708/ - BEING THE EXPENSES TOWARDS ELECTRICAL MAI NTENANCE , SECURITY EXPENSES AND WATER CHARGES AND DIRECTED THE ASSESSING OFFICER TO CONSIDER THESE EXPENSES FOR ALLOWING WHILE C OMPUTING THE INCOME FROM HOUSE PROPERTY . 15. LD. COUNSEL FOR THE ASSESSEE , BEFORE US , SUBMITS THAT THE EXPENSES INCURRED ON REPAIRS A ND MAINTENANCE IN RESPECT OF BE LAPUR PREMISES OF . 2,2 6 , 728/ - ARE TO BE ALLOWED AS DEDUCTION SINCE THE PREMISES IS NOT GIVEN ON RENT BUT WAS USED FOR BUSINESS PURPOSES OF THE ASSESSEE. THE LD. COUNSEL FOR THE ASSESSEE REFE RRING TO THE PAGE NO. 141 OF TH E PAPER BOOK SUBMITTED THAT THE TOTAL EXPENSES INCURRED TOWARDS BUILDING REPAIRS AND MAINTENANCE IS .3 , 22 , 89 , 187/ - OUT OF WHICH THE EXPENSES PERTAIN TO THE BUILDINGS WHICH WERE GIVEN ON RENT WERE . 1 , 30 , 03 , 201/ - AN D THE BALANCE EXPENDITURE OF . 1 , 92 , 85 , 986/ - WAS INCUR RED ON THE PROPERTY 11 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., WHICH WAS USED FOR BUSINESS PURPOSES BY THE ASSESSEE. THEREFORE, IT WAS SUBMITTED THAT THE ASSESSING OFFICER BE DIRECTED TO RESTRICT THE DISALLOWANCE TO 1 , 30 , 03 , 201/ - ONLY. LD. COUNSEL FOR THE ASSESSEE FURTHER SUBMITS THAT THE ASSESSI NG OFFICER W HILE COMPLETING THE ASSESSMENT FOR THE A.Y. 2012 - 13 ACCEPTED THE CLAIMS MADE BY THE ASSESSEE IN RESPECT OF EXPENSES INCURRED AND CLAIMED FOR BOTH THE PROPERTIES GIVEN ON RENT AND THE PROPERTIES USED FOR BUSINESS PURPOSES. HE REFERRED TO THE C OPY OF THE ASSESSMEN T ORDER FOR THE A.Y. 2012 - 13 PASSED U/S. 143(3) OF THE ACT WHICH IS PLACED AT PAGE NO. 224A TO 224E OF THE PAPER BOOK. 16. LD. DR VEHEMENTLY SUPPORTED THE OR DERS OF THE AUTHORITIES BELOW. 17. WE HAVE HEARD THE RIVAL SUBMISSIONS, PERUSED THE ORDERS OF THE AUTHORITIES BELOW. THE BREAKUP OF REPAIRS AND MAINTENANCE EXPENSES SAID TO HAVE BEEN SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE A.Y. 2010 - 11 IN RESPECT OF PROPERTIES LET OUT AND THE PROPERTIES USED FOR BUSINESS PURPOSES HAVE BEEN SHOWN AS UNDER: - SR. NO. PARTICULARS AMOUNT 1 BUILDING REPAIRS & MAINTENANCE 1,27,45,577 2 BUILDING REPAIRS & MAINTENANCE (ROTUNDA) 2,57,624 EXPENSES PERTAINING TO RENTAL EXPENSES (A) 1,30,03,201 3 AMC CHARGES FOR 53 DOOR ACCESS CONTROL SYSTEM 2,20,800 4 AMC FOR CCTV SYSTEM 8,04,846 5 BUILDING REPAIRS & MAINTENANCE (DELHI OFFICE) 18,984 6 ELECTRICAL MAINTENANCE EXPENSES 55,66,231 7 REPAIRS & MAINTENANCE (BELAPUR PREMISES) 2,26,728 8 SECURITY EXPENSES 80,30,637 12 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., SR. NO. PARTICULARS AMOUNT 9 WALKIE - TALKIE EXPENSES 95,920 10 WATER CHARGES 43,21,840 OTHER REPAIRS AND MAINTENANCE EXPENSES (B) 1,92,85,986 TOTAL BUILDING REPAIRS & MAINTENANCE EXPENSES (A+B) 3,22,89,187 AS PER PROFIT AND LOSS ACCOUNT 3,22,89,187 18. ON A PERUSAL OF THE ABOVE EXPENSES WE NOTICE THAT ASSESSEE INCURRED EXPENSES ON THE PREMISES GIVEN ON RENT AS WELL AS THE PREMISES USED FOR THE PURPOSE OF ASSESSEES BUSINESS. THE EXPENDITURE INCURRED ON THE PREMISES USED FOR THE BUSINESS PURPOSES HAVE TO BE ALLOWED IN TOTO . WE ARE OF THE VIEW THAT THE ASSESSING OFFICER SHOULD EXAMINE THIS ISSUE IN TH E LIGHT OF THE SUBMISSIONS AN D BIFURCATION OF THE EXPENSES FURNISHED BY THE ASSESSEE. THIS ASPECT OF THE MATTER APPEARS TO HAVE BEEN NOT CONSIDERED BY THE LD.CIT(A) THOUGH SUBMISSIONS WERE MADE BY THE ASSESSEE . THUS WE RESTORE THIS ISSUE TO THE FILE OF THE ASSESSING OFFICER WHO SHALL EXAMINE THE CONTENTIONS OF THE ASSESSEE AND DECIDE AFRESH IN ACCORDANCE WITH LAW , AFTER PROVIDING ADEQUAT E OPPORTUNITY OF BEING HEARD T O THE ASSESSEE. 19. COMING TO THE REVENUES APPEAL THE GROUND RAISED IS WITH REGARD TO THE A LLOWANCE OF EXPENSES FROM INCOME FROM HOUSE PROPERTY OVER AND A BOVE THE STANDARD DEDUCTION COMPUTED BY THE ASSESSING OFFICER AS PER SECTION 24 (A) OF THE ACT. AS WE HAVE SET ASIDE THE ENTIRE ISSUE TO THE FILE 13 ITA NO.5748/MUM/2015 (A.Y: 2010 - 11) ITA.NO. 4820 & 152 /MUM/2016 (A.Y: 2010 - 11) M/S. BOMBAY STOCK EXCHANGE LTD., OF THE ASSESSING OFFICER FOR FRESH EXAMINATION, WE RESTORE THIS GROUND ALSO THE FILE OF THE ASSESSING OFFICER FOR D ENOVO ADJUDICATION . 20. IN THE RESULT, APPEAL IN ITA.NO. 4820/ MUM /2016 IS DISMISSED, APPEAL IN ITA.NO. 152/MUM/2015 IS PARTLY ALLO WED FOR STATISTICAL PURPOSES. AND APPEAL IN ITA.NO. 5748/MUM/2015 IS AL LOWED FOR STATISTICAL PURPOSE. ORDER PRONOUNCED IN THE OPEN COURT ON THE 31 ST MAY , 2019 SD/ - SD/ - ( RAJESH KUMAR ) (C.N. PRASAD) ACCOUNTANT MEMBER JUDICIAL MEMBER MUMBAI / DATED 31 / 0 5 / 2019 GIRIDHAR, SR.PS COPY OF THE ORDER FORWARDED TO : 1. THE APPELLANT 2. THE RESPONDENT. 3. THE CIT(A), MUMBAI. 4. CIT 5. DR, ITAT, MUMBAI 6. GUARD FILE. //TRUE COPY// BY ORDER (ASSTT. REGISTRAR) ITAT, MUM