DCIT CENT. CIR. -4(1), CENTRAL RANGE-4, MUMBAI V. M/s. RUNWAL DEVELOPERS P. LTD., MUMBAI

ITA 7048/MUM/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 7188 (ITAT-MUMBAI)
• Duration Of Justice: 1 year(s) 3 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-04-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2012-2013
• Appeal Filed On: 11-12-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: SINCE FACTS ARE IDENTICAL; ARE DISPOSED OF
• Assessee Lawyers: THIS CONSOLIDATED
• Keywords: Business income; Business expenditure; Revised return; Set aside

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES D , MUMBAI BEFORE SHRI G. MANJUNATHA, ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, JUDICIAL MEMBER, ITA NOS.7048 & 7050/MUM/2017 ASSESSMENT YEARS: 2012-13 & 2014-15 DCIT, CENTRAL CIRCLE-4(1), R. NO.1916, 19 TH FLOOR, AIR INDIA BUILDING, NARIMAN POINT, MUMBAI-400021 / VS. M/S RUNWAL DEVELOPERS PVT. LTD. 5 TH FLOOR, RUNWAL & OMKAR SQUARE, OFF. EASTERN EXPRESS HIGHWAY, SION (EAST), MUMBAI-400021 ( / REVENUE) ( /ASSESSEE) P.A. NO.AAACR0395J / DATE OF HEARING : 28/02/2019 / DATE OF ORDER: 10/04/2019 / O R D E R PER G. MANJUNATHA, (ACCOUNTANT MEMBER) THESE TWO APPEALS FILED BY THE REVENUE ARE DIRECTED AGAINST SEPARATE, BUT IDENTICAL ORDERS OF THE LD. CIT(A)-52, MUMBAI, BOTH DATED 05/09/2017 AND THEY PERTAINS TO ASSESSMENT YEARS 2012-13 AND 2014-15. SINCE FACTS ARE IDENTICAL AND ISSUES ARE COMMON, FOR THE SAKE OF CONVENIENCE, THESE APPEALS WERE HEARD TOGETHER AND ARE DISPOSED OF BY THIS CONSOLIDATED ORDER. / REVENUE BY SHRI SANJAY SINGH / ASSESSEE BY SHRI GAURAV KABRA 2 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. 2. THE REVENUE, HAS MORE OR LESS FILED COMMON GROUN DS OF APPEAL FOR BOTH ASSESSMENT YEARS. FOR THE SAKE OF BREVITY, GROUNDS OF APPEAL TAKEN FOR ASSESSMENT YEAR 2012-13 ARE REPRODUCED HEREUNDER:- 1. 'WHETHER ON THE FACTS AND CIRCUMSTANCES OF THE C ASE AND IN LAW, THE LD. CIT(A) WAS JUSTIFIED IN DIRECTING THE AO TO ALLOW T HE CLAIM OF EXPENSES FROM THE BUSINESS INCOME AFTER VERIFICATION, DESPITE THE ASS ESSEE NOT APPORTIONING ANY EXPENSES TOWARDS EARNING THE RENTAL INCOME, WHICH I S INCIDENTAL TO ITS CORE BUSINESS ACTIVITY? 2. 'WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES O F THE CASE AND IN LAW, THE LD. CIT(A)'S DECISION IN ALLOWING THE CLAIM OF EXPE NSES FROM THE BUSINESS INCOME OF THE ASSESSEE IS PERVERSE TO THE FACTS THA T THE ASSESSEE HAS FAILED TO DISCHARGE ITS ONUS OF PROVING THAT THE VARIOUS EXPE NSES CLAIMED IN ITS BOOKS HAVE BEEN WHOLLY AND EXCLUSIVELY INCURRED FOR THE P URPOSE OF EARNING ITS BUSINESS INCOME?.' 3. THE BRIEF, FACTS OF THE CASE ARE THAT THE ASSESS EE COMPANY IS ENGAGED IN THE BUSINESS OF RESIDENTIAL, COMMERCIAL AND MALL CONSTR UCTION AND RUNNING AND MANAGING MALL. THE ASSESSEE HAS FILED ITS RETURN OF INCOME FOR ASS ESSMENT YEAR 2012-13 ON 30/09/2012, DECLARING TOTAL INCOME AT RS.23,97,99,030/- AND THE SAME HAS BEEN REVISED BY FILING REVISED RETURN OF INCOME ON 20/07/2013, DECLARING T OTAL INCOME AT RS.24,14,83,100/-. DURING THE ASSESSMENT PROCEEDINGS, THE AO OBSERVED THAT THE ASSESSEE DERIVES LEAVE AND LICENSE FEES FROM RUNNING AND MANAGING MALL AND RENTING OF PREMISES AND SUCH RENT WAS ASSESSED UNDER THE HEAD INCOME FROM HOUSE PROP ERTY WHEREAS, OTHER INCIDENTAL RECEIPTS OF MALL OF MAINTENANCE INCLUDING CAR PARKI NG, ETC ARE ASSESSED UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSEE HAS COMPUTED I NCOME FROM HOUSE PROPERTY AFTER CLAIMING STANDARD DEDUCTION @ 30% U/S 24(A) OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) ON GROSS TOTAL INCOME. HOWEVER, WHILE COM PUTING INCOME UNDER THE HEAD INCOME FROM BUSINESS, THE ASSESSEE HAS NOT APPORTIONED TO TAL EXPENDITURE DEBITED INTO PROFIT & 3 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. LOSS ACCOUNT TOWARDS EXPENDITURE PERTAIN TO THE ACT IVITY OF INCOME FROM HOUSE PROPERTY AND EXPENDITURE PERTAINS TO INCOME ASSESSABLE UNDER THE HEAD INCOME FROM BUSINESS OR PROFESSION. THEREFORE, AFTER CONSIDERING THE EXPE NDITURE DEBITED IN THE PROFIT & LOSS ACCOUNT APPORTIONED EXPENSES PERTAINS TO INCOME ASS ESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND INCOME ASSESSABLE UNDER TH E HEAD INCOME FROM BUSINESS AND MADE DISALLOWANCE OF RS.1,29,32,222/- AFTER GIVING SET OFF FOR EXPENDITURE OF RS.17,61,837/- SUO-MOTO DISALLOWED BY THE ASSESSEE ON THE GROUND THAT THE ASSESSEE HAS ALREADY CLAIMED STANDARD DEDUCTION TOWARDS REPAIRS AND OTHER MAINTENANCE EXPENSES IN RESPECT OF INCOME FROM HOUSE PROPERTY. 4. AGGRIEVED BY THE ASSESSMENT ORDER, THE ASSESSEE PREFERRED AN APPEAL BEFORE THE LD. CIT(A). 5. BEFORE THE LD. CIT(A), THE ASSESSEE HAS FILED E LABORATE WRITTEN SUBMISSIONS WHICH HAS BEEN REPRODUCED AT PARA 5.2 OF PAGE 3 TO 6 OF THE ORDER OF LD. CIT(A). THE SUM AND SUBSTANCE OF THE ARGUMENTS OF THE ASSESSEE BEFO RE THE LD. CIT(A) ARE THAT THE ASSESSEE HAS MADE SUO-MOTO DISALLOWANCE OF EXPENSES RELATES TO INCOME FROM HOUSE PROPERTY WHICH IS BASED ON ACTUAL EXPENDITURE INCUR RED IN RESPECT OF INCOME FROM HOUSE PROPERTY, BUT DEBITED INTO THE PROFIT & LOSS ACCOUN T, WHEREAS, THE AO HAS DETERMINED DISALLOWANCE ON AD-HOC BASIS TAKING INTO ACCOUNT I NCOME DECLARED UNDER THE HEAD INCOME FROM HOUSE PROPERTY AND INCOME FROM OTHER SO URCES WITHOUT ANY BASIS. THE LD. CIT(A), AFTER CONSIDERING THE RELEVANT SUBMISSIONS OF THE ASSESSEE AND ALSO BY FOLLOWING THE DECISION OF ITAT, MUMBAI, IN ASSESSEES OWN CAS E FOR ASSESSMENT YEAR 2010-11 & 4 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. 2011-12 HELD THAT THE ITAT HAS SET-ASIDE THE ISSUE TO THE FILE OF THE AO WITH A SPECIFIC DIRECTION TO EXAMINE THE EXPENSES CLAIMED UNDER THE HEADS BUSINESS PROMOTION, ADVERTISEMENT EXPENSES, ETC FOR QUANTIFYING THE DIS ALLOWANCE OF EXPENSES RELATED TO RUNWALL MALL BEING CLAIMED BY THE ASSESSEE WHILE CO MPUTING INCOME UNDER THE HEAD INCOME FROM BUSINESS. THEREFORE, BY FOLLOWING TH E DECISION OF ITAT, MUMBAI, SET-ASIDE THE ISSUE TO THE FILE OF THE AO AND DIRECT HIM TO R E-COMPUTE THE DISALLOWANCES IN THE LIGHT OF FINDINGS OF ITAT. 6. AGGRIEVED BY THE ORDER OF THE LD. CIT(A), THE R EVENUE IS IN APPEAL BEFORE US. 7. THE LD. AR FOR THE ASSESSEE, AT THE TIME OF HEAR ING, SUBMITTED THAT THIS ISSUE IS SQUARELY COVERED IN FAVOUR OF THE ASSESSEE BY THE D ECISION OF THE ITAT, MUMBAI, IN ASSESSEES OWN CASE. THE ITAT, MUMBAI, D BENCH IN ITA NO.4824/MUM/2014 FOR ASSESSMENT YEAR 2011-12 HAD CONSIDERED SIMILAR ISSU E AND BY FOLLOWING ITS EARLIER ORDER FOR THE ASSESSMENT YEAR 2010-11 SET-ASIDE THE MATTE R TO THE FILE OF THE AO FOR VERIFICATION OF VARIOUS EXPENSES LIKE BUSINESS PROMOTIONS EXPENS ES AND OTHER EXPENSES. THEREFORE, A SIMILAR DIRECTION MAY BE GIVEN TO THE AO TO VERIFY THE SUO-MOTO DISALLOWANCE MADE BY THE ASSESSEE IN THE LIGHT OF FINDINGS OF THE TRIBUNAL. 8. THE LD. DR, ON THE OTHER HAND, FAIRLY ACCEPTED T HAT THE ISSUE IS COVERED IN FAVOUR OF THE ASSESSEE BY THE DECISION OF THE ITAT IN ASSESSE ES OWN CASE BY EARLIER ORDER. 9. WE HAVE HEARD BOTH THE PARTIES, PERUSED MATERIALS A VAILABLE ON RECORD AND GONE THROUGH THE ORDERS OF AUTHORITIES BELOW. THE ISSUE INVOLVED IN THE PRESENT APPEAL IS A 5 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. RECURRING ISSUE, WHICH IS SUBJECT MATTER OF CONSIDE RATION BY THE CO-ORDINATE BENCH OF ITAT MUMBAI D BENCH IN ASSESSEES OWN CASE FOR EARLIER ASSESSMENT YEARS, WHERE UNDER IDENTICAL SET OF FACTS, THE ISSUE HAS BEEN SET-ASID E TO THE FILE OF THE AO TO DETERMINE THE DISALLOWANCE CONSIDERING VARIOUS EXPENSES DEBITED B Y THE ASSESSEE INTO THE PROFIT & LOSS ACCOUNT, INCLUDING BUSINESS PROMOTION EXPENSES, ADV ERTISEMENT EXPENSES AND OTHER EXPENSES WHICH ARE DIRECTLY ATTRIBUTABLE TO EARNING LEASE RENTAL INCOME AND WHICH IS ASSESSABLE UNDER THE HEAD INCOME FROM HOUSE PROPER TY. THE RELEVANT FINDINGS OF THE TRIBUNAL ARE AS UNDER:- '10. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND A LSO PERUSED THE MATERIAL AVAILABLE ON RECORD. WE HAVE OBSERVED THAT THE ASSESSEE HAS R ECEIVED LEAVE AND LICENSE FEES AMOUNTING TO RS. 6,03,27,131/- FROM THE TENANTS. WE HAVE OBSERVED THAT AS CONTENDED BY THE LD. COUNSEL, THIS ISSUE IS COVERED BY THE DE CISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEES OWN CASE FOR ASSESSMENT YEAR S 2010-11 IN ITA NO. 4777/MUM/2013 VIDE TRIBUNAL ORDERS DATED 12TH APRIL , 2016 WHEREBY THE TRIBUNAL HAS DISCUSSED THE ISSUE IN DETAIL AND IN THE INSTANT AP PEAL THE FACTS ARE IDENTICAL. THE FINDINGS OF THE TRIBUNAL IS REPRODUCED BELOW:- 2. THE BRIEF FACTS QUA FIRST ISSUE ARE THAT, ASSES SEE IS IN THE BUSINESS OF BUILDERS AND DEVELOPERS, GENERATION AND SALE OF ELECTRICITY AND HAS ALSO RENTED OUT PROPERTIES DURING THE YEAR. THE AO NOTED THAT, ASSESSEE HAS LE ASED OUT IMMOVABLE PROPERTY OWNED BY IT IN THE FORM OF R MALL, LBS MARG, MULUN D (WEST), MUMBAI. FROM LEASING OF SUCH PROPERTY, THE ASSESSEE HAS EARNED LEAVE AND LICENSE FEES OF RS.5,36,46,388/-. BESIDES THIS, THE ASSESSEE HAS ALSO EARNED OTHER RE NTAL INCOME OF RS.3,82,456/- AND RS.19,58,050/-. ALL THESE RECEIPTS HAVE BEEN SHOWN RENTAL RECEIPTS CHARGEABLE UNDER THE HEAD INCOME FROM HOUSE PROPERTY. WHILE COMPUT ING THE INCOME FROM HOUSE PROPERTY, THE ASSESSEE HAS REDUCED PROPERTY TAX OF RS.23,92,857/- AND ALSO THE STANDARD DEDUCTION @ 30% UNDER SECTION 24(1) ON ACC OUNT OF REPAIRS AND ACCORDINGLY, SUM OF RS.3,75,15,126/- WAS OFFERED AS TAXABLE INCO ME. THE AO OBSERVED THAT THE ASSESSEE, WHILE COMPUTING ITS INCOME FROM BUSINESS HAS FAILED TO APPORTION AND DISALLOW EXPENSES DEBITED TO THE PROFIT AND LOSS AC COUNT WHICH CAN BE ATTRIBUTABLE TO RENTAL INCOME EARNED BY IT. SINCE THE ASSESSEE HAD TAKEN THE ADVANTAGE OF 30% REPAIR ALLOWABLE BY THE STATUTE AS A STANDARD DEDUCTION, T HEREFORE, IT SHOULD HAVE SUO MOTO APPORTIONED CERTAIN EXPENSES TO THE RENTAL INCOME A ND DISALLOW THE SAME IN ITS COMPUTATION OF INCOME WHILE FILING ITS RETURN. IN R ESPONSE TO THE SHOW CAUSE NOTICE BY THE AO, THE ASSESSEE SUBMITTED DETAILS OF DIRECT EX PENSES INCURRED FOR THE BUSINESS CARRIED OUT BY IT. IT WAS ALSO POINTED OUT THAT EXP ENSES TO THE TUNE OF RS.13,11,0361- ON ACCOUNT OF ELECTRICITY CHARGES FOR PERTAINING TO MALL WAS SUO-MOTTO DISALLOWED BY THE ASSESSEE. AS REGARDS ADMINISTRATIVE AND OTHER E XPENSES THEY WERE UNIVERSAL EXPENSES WHICH WERE INCURRED FOR THE RUNNING OF THE BUSINESS, IRRESPECTIVE OF WHETHER OR NOT PROJECTS WERE BEING EXECUTED OR RENTAL ACTIV ITY WAS THERE OR NOT. THESE 6 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. EXPENSES HAVE BEEN INCURRED TO CONTINUE THE CORPORA TE SET UP OF THE COMPANY AND FOR MAINTAINING ITS CORPORATE IDENTITY. THERE WOULD NOT HAVE BEEN ANY CHANGE IN THE CLAIM OF EXPENSES EVEN IF ASSESSEE WOULD NOT HAVE L EASED OUT ANY OF ITS PROPERTIES. FURTHER, THIS ISSUE OF ALLOCATION OF EXPENSES HAD N EVER ARISEN IN THE PAST ASSESSMENT YEARS. 3. HOWEVER, THE LD. AO REJECTED THE ASSESSEE'S CONT ENTION AND OBSERVED THAT, EXCEPT FOR PROPERTY TAX, NO OTHER IMPLICIT DISALLOWANCE HA VE BEEN MADE BY THE ASSESSEE TOWARDS RENTAL RECEIPTS. THE ASSESSEE HAS NOT APPOR TIONED ANY OF THE EXPENSES DEBITED TO THE PROFIT AND LOSS ACCOUNT WHICH HAS BE EN CLAIMED AS BUSINESS EXPENDITURE TOWARDS THE RENTAL RECEIPTS. HE HELD TH AT THE ASSESSEE'S CONTENTION THAT AS ON GOING CONCERN AND BUSINESS ENTERPRISE IT HAS TO INCUR CERTAIN EXPENDITURES EVEN IF NO RENTAL INCOME WOULD HAVE ARISEN, IS NOT TENAB LE, BECAUSE EARNING OF INCOME FROM LEASING OUT OF PREMISES OF 'R. MALL' IS INCIDENTAL TO ITS BUSINESS ACTIVITIES. THE EXPENSES STATED TO HAVE BEEN INCURRED IN THE COURSE OF OTHER BUSINESS ACTIVITY MAY HAVE BEEN USED FOR EARNING OF RENTAL INCOME ALSO, F OR EXAMPLE, SALARY PAID TO THE EMPLOYEES, ELECTRICITY CHARGES PAID FOR THE OFFICE AND OTHER SUCH EXPENSES MAY HAVE A COMPONENT TOWARDS EARNING OF RENTAL INCOME. THUS, T HERE HAS TO BE SOME ALLOCATION OF THE EXPENSES AND ACCORDINGLY, DISALLOWANCE SHOUL D BE WORKED OUT. THE ASSESSEE HAS CLAIMED HUGE STANDARD DEDUCTION OF 30% AND MUNI CIPAL TAX AS DEDUCTION FROM RENTAL INCOME, BUT WHILE CALCULATING THE BUSINESS I NCOME, THE ASSESSEE HAS NOT APPORTIONED ANY OF THE EXPENSES TOWARDS ITS RENTAL RECEIPTS. LASTLY, IN THE EARLIER YEARS, THE ASSESSING OFFICERS AND DEPARTMENTAL AUTH ORITIES HAD NOT EXAMINED THIS ASPECT OF THE MATTER, THEREFORE, THIS IS THE NEW IS SUE WHICH HAS BEEN RAISED IN THIS YEAR. SO ACCORDINGLY, HE MADE A DISALLOWANCE OF RS. 1,60,77,911/- IN THE FOLLOWING MANNER:- '6.5 IT IS VERY DIFFICULT TO PIN POINT AT THE EXPEN SES THAT HAVE BEEN DIRECTLY INCURRED FOR THE SAKE OF EARNING RENTAL INCOME BY THE ASSESSEE. EVEN THE ASSESSEE HAS NOT GIVEN ANY SUCH WORKING, EVEN THOUGH IT WAS ASKED TO DO SO , WITHOUT PREJUDICE, IN THE NOTICE DATED 02.01.2013. THEREFORE SUCH EXPENSE HAS TO BE ESTIMATED ON THE BASIS OF THE AVAILABLE FACTS AND INFORMATION. NOW IN ORDER TO CO MPUTE THE DISALLOWANCE OF EXPENSES TO BE MADE ON ACCOUNT OF THE ABOVE DISCUSS ION, THERE ARE TWO CHOICES AVAILABLE WITH THE UNDERSIGNED: 1. TO DISALLOW THE SAME AMOUNT OF DEDUCTION FROM TH E BUSINESS EXPENSES, AS THE AMOUNT OF DEDUCTION CLAIMED RS. 1,60,77,911/- AS 30 % REPAIRS AS PER THE LAW. THE SAME CAN BE DISALLOWED AT FIRST CHOICE. 2. TO DISALLOW THE FRACTION OF TOTAL EXPENSES CLAIM ED BY THE ASSESSEE, AS IS THE PROPORTION OF INCOME FROM RENT TO THE GROSS INCOME OF THE ASSESSEE AS PER THE P&L ACCOUNT, I.E. IN THE PROPORTION OF 5,59,85,895 X 7,20,08,371 =16,60,380 242,80,30,091 6.6 KEEPING IN MIND THE ABOVE COMPUTATION THE FIRST CHOICE IS EXERCISED IN THE INTERESTS OF THE REVENUE. THEREFORE A DISALLOWANCE OF RS. 1,60,77,911/- IS MADE OUT OF THE BUSINESS EXPENSES CLAIMED BY THE ASSESSEE IN IT S RETURN. THIS AMOUNT OF DISALLOWANCE IS ADDED TO THE BUSINESS INCOME OF THE ASSESSEE. 4. BEFORE THE CIT(A), ASSESSEE SUBMITTED THAT, EXPE NSES DIRECTLY RELATED TO THE RENTAL INCOME BEING MUNICIPAL TAXES OF RS.23, 92,88 7/- AND ELECTRICITY CHARGES OF RS. 13,11,0361- HAD ALREADY BEEN DISALLOWED BY THE ASSE SSEE. THE OTHER EXPENSES DEBITED 7 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. TO THE PROFIT AND LOSS ACCOUNT MAINLY RELATED TO OT HER BUSINESS SEGMENT CARRIED OUT BY THE ASSESSEE AND OR FOR GENERAL & ADMINISTRATIVE EX PENSES INCURRED WERE PURELY FOR RUNNING OF THE BUSINESS, IRRESPECTIVE OF WHETHER OR NOT PROJECTS BEING EXECUTED OR RENTAL ACTIVITY WAS THERE OR NOT. THESE EXPENSES AR E ESSENTIALLY FOR RUNNING OF COMPANY AND MAINTAINING ITS CORPORATE IDENTITY. ONE VERY IMPORTANT FACT WHICH WAS BROUGHT TO THE NOTICE OF AND IN THE RECORD OF THE C IT(A) WAS THAT, ASSESSEE HAD ENTERED INTO AN AGREEMENT WITH M/S VEER PROPERTY PV T. LTD., FOR RUNNING AND MANAGING THE MALLS AND THE SAID COMPANY HANDLED ALL THE WORK RELATED TO THE MALL AND, THEREFORE, ASSESSEE DID NOT HAD TO INCUR ANY E XPENDITURE FOR THE MAINTENANCE OF THE MALLS. FURTHER, IT WAS THE ONUS OF THE AO TO PR OVE THAT THE EXPENSES DEBITED BY THE ASSESSEE HAS NOT BEEN INCURRED FOR THE OTHER BU SINESS INCOME. ALTERNATIVELY, IT WAS SUBMITTED THAT, IF ANY AMOUNT IS DISALLOWABLE THEN SAME SHOULD BE RESTRICTED TO 2%. 5. THE LD. CIT(A) AFTER CONSIDERING THE ASSESSEE'S SUBMISSIONS AND ALSO THE FINDING OF THE AO, OBSERVED THAT, DESPITE OPPORTUNITY GIVEN BY THE AO AS WELL AS IN THE COURSE OF THE APPELLATE PROCEEDINGS, THE ASSESSEE COULD NO T ESTABLISH DIRECT CORRELATION WITH THE EXPENSES WHICH WERE DIRECTLY RELATED TO THE BUS INESS INCOME OTHER THAN RENTAL INCOME. UNDER THE HEAD 'ADMINISTRATION AND SELLING EXPENSES' ASSESSEE HAS DEBITED SALARY AMOUNT OF RS.292.85 LAKHS; DIRECTORS' REMUNE RATION OF RS.21 LAKHS; CONVEYANCE EXPENSES OF RS.24.60 LAKHS; ELECTRICITY EXPENSES OF RS.28.95 LAKHS; OFFICE REPAIRS AND MAINTENANCE EXPENSES OF RS. 11.5 LAKHS; PROFESSIONA L FEES OF RS. 47.28 LAKHS; SOCIETY CHARGES OF RS. 12.06 LAKHS; STAFF WELFARE EXPENSES OF RS. 13.06 LAKHS; AND TRAVELLING EXPENSES OF RS. 14.44 LAKHS, WHICH ASSESSEE COULD N OT PROVE THAT SAME WAS EXCLUSIVELY FOR THE PURPOSE OF OTHER BUSINESS INCOME AND DID NO T RELATE TO EARNING OF RENTAL INCOME. THE ONUS IS ON THE ASSESSEE TO SHOW THAT TH E EXPENDITURE HAVE BEEN INCURRED WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF THE BUSIN ESS. HE ALSO REFERRED TO CERTAIN DECISIONS FOR THE PROPOSITION THAT, THE BURDEN TO P ROVE THAT EXPENDITURE HAVE BEEN INCURRED FOR THE BUSINESS IS ON THE ASSESSEE. THESE DECISIONS HAVE BEEN REFERRED IN PAGES 5 & 6 OF THE APPELLATE ORDER. AS REGARDS THE AGREEMENT WITH MI VEER PROPERTIES P. LTD. FOR THE MAINTENANCE OF THE MALL, THE ASSESSEE COULD NOT PRODUCE ANY DETAILS AND BREAK-UP OF EXPENSES INCURRED BY THE SA ID COMPANY FOR MAINTENANCE OF THE MALL AND HENCE THIS ARGUMENT OF THE ASSESSEE IS NOT SUBSTANTIATED. LASTLY, THE ASSESSEE'S CONTENTION THAT IT HAS SUO MOTO DISALLOW ED PROPERTY TAX PAYMENT AND ELECTRICITY PAYMENT IS NOT RELEVANT, BECAUSE THE AO HAS DISALLOWED THE EXPENDITURE FROM THE ADMINISTRATION AND SELLING EXPENSES WHICH IS THERE IN SCHEDULE 'E'. ACCORDINGLY, HE CONFIRMED THE ENTIRE DISALLOWANCE M ADE BY THE AO OF RS. 1,60,77,991/- 6. BEFORE US, THE LD. COUNSEL FOR THE ASSESSEE MR. RAKESH JOSHI, AFTER EXPLAINING THE ENTIRE FACTS SUBMITTED THAT, THE ASSESSEE IS HAVING HUGE BUSINESS INCOME FROM CONSTRUCTION ACTIVITIES AND OTHER RECEIPTS. THE REC EIPTS FROM THE CONSTRUCTION ACTIVITY ITSELF WAS MORE THAN RS.235 CRORES. THAT APART, THE ASSESSEE HAD OTHER RECEIPTS WHICH WERE ALSO TAXABLE UNDER HEAD 'BUSINESS INCOME', WHI CH IS EVIDENT FROM PROFIT AND LOSS ACCOUNT APPEARING AT PAGE 6 OF THE PAPER-BOOK. THE TOTAL INCOME SHOWN BY THE ASSESSEE IS MORE THAN RS.244 CRORES. UNDER THE HEAD 'ADMINISTRATION AND SELLING EXPENSES' THE AMOUNT DEBITED IS APPROXIMATELY RS. 7 .20 CRORES. NOW, ON THESE FACTS, WHETHER THERE CAN BE ANY OCCASION FOR APPORTIONMENT OF EXPENSES FOR EARNING OF A RENTAL INCOME OF RS.5.59 CRORES. AS THERE IS NO DIS PUTE THAT THESE LEASE AND RENTAL INCOME ARE ASSESSED AS 'INCOME FROM HOUSE PROPERTY' . ONCE AN INCOME HAS BEEN ASSESSED UNDER A PARTICULAR HEAD THEN SAME HAS TO B E COMPUTED IN THE MANNER PROVIDED UNDER THAT SPECIFIC HEAD ONLY. ACCORDINGLY , THERE WAS NO REQUIREMENT FOR ANY APPORTIONMENT OF EXPENSES DEBITED IN THE PROFIT AND LOSS ACCOUNT FOR OTHER BUSINESS 8 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. ACTIVITIES TOWARDS EARNING OF RENTAL INCOME. HE FUR THER SUBMITTED THAT, ONE VERY IMPORTANT FACT WHICH HAS NOT BEEN PROPERLY APPRECIA TED BY THE LD. CIT(A) IS THAT, THE ASSESSEE HAD AN AGREEMENT WITH M/S VEEAR PROPERTY P VT LTD. WHEREBY THE ASSESSEE HAS GIVEN THE ENTIRE MANAGEMENT, RUNNING AND MAINTE NANCE OF THE MALL TO THIS PARTY, VIDE AGREEMENT DATED 29TH MARCH, 2009. FOR CARRYING ON THE MAINTENANCE BY THE SAID COMPANY, THE ASSESSEE DOES NOT HAVE TO MAKE ANY PAY MENT, AS THE SAID COMPANY COLLECTS THE MAINTENANCE CHARGES FROM THE TENANTS, OWNERS AND OCCUPIERS OF THE COMPLEXES OF SHOPS IN THE MALL DIRECTLY AND USES IT FOR THE MAINTENANCE. THE ENTIRE ELECTRICITY, AIR-CONDITIONER CHARGES FOR THE COMMON AREAS ARE ALL RUN AND MAINTAINED BY THIS COMPANY, THEREFORE, IN VIEW OF THIS AGREEME NT, THE ASSESSEE DOES NOT HAVE TO INCUR ANY EXPENDITURE AT ALL. HOW, THIS COMPANY RUN S ITS MAINTENANCE BUSINESS OR INCURS ANY EXPENDITURE, THE SAME IS NOT THE CONCERN OF THE ASSESSEE AT ALL THEREFORE, THE LD. CIT(A) HAS COMPLETELY MISDIRECTED HIMSELF I N HOLDING THAT, THE ASSESSEE HAS FAILED TO ESTABLISH THE EXPENSES INCURRED BY M/S VE EAR PROPERTY PVT LTD. THUS, ON THESE FACTS, NO APPORTIONMENT OF EXPENSES SHOULD BE MADE. 7. ON THE OTHER HAND, LD. DR STRONGLY RELIED UPON T HE ORDER OF THE OF THE CIT(A) AND SUBMITTED THAT THE ASSESSEE IS RUNNING COMPOSITE AC TIVITIES, THAT IS, CONSTRUCTION BUSINESS AND ALSO RENTING OUT OF THE PROPERTIES. IF A COMPOSITE ACTIVITY IS BEING CARRIED OUT THEN, POSSIBILITY OF COMMON EXPENDITURE CANNOT BE RULED OUT. THUS, SOME ALLOCATION OF EXPENSES TOWARDS THE EARNING OF RENTA L INCOME HAS TO BE MADE FROM 'ADMINISTRATION AND SELLING EXPENSES'. IN ANY CASE BEFORE THE CIT(A), THE ASSESSEE ITSELF HAS OFFERED THAT 2% OF THE EXPENDITURE SHOUL D BE DISALLOWED ON PROPORTIONATE BASIS. THUS, THE ALTERNATE CONTENTION OF THE ASSESS EE ITSELF GOES TO SHOW THAT SOME, EXPENSES NEEDS TO BE ALLOCATED. 8. WE HAVE HEARD RIVAL SUBMISSIONS, PERUSED THE REL EVANT FINDING GIVEN IN THE IMPUGNED ORDERS AND ALSO MATERIAL REFERRED BEFORE U S. THE ASSESSEE IS IN THE BUSINESS OF BUILDERS AND DEVELOPERS'; GENERATION AND SALE OF ELECTRICITY; AND IS ALSO EARNING INCOME FROM LEAVE AND LICENSE OF A MALL FROM WHICH THE INCOME HAS BEEN SHOWN ASSESSABLE UNDER THE HEAD 'INCOME FROM HOUSE PROPER TY'. FROM THE PERUSAL OF THE P&L ACCOUNT AS APPEARING AT PAGE 6 OF THE PAPER BOO K, IT IS SEEN THAT, ASSESSEE'S RECEIPTS FROM CONSTRUCTION ACTIVITY IS AT RS.235,35 ,40,254/-. BESIDES THIS, THERE ARE OTHER HUGE RECEIPTS FROM OTHER ACTIVITIES ALSO. THE DETAILS OF THE INCOME SHOWN IN THE PROFIT AND LOSS ACCOUNT FOR THE YEAR ENDING 31ST MA RCH, 2010 ARE AS UNDER:- PARTICULARS SCH. NO. OF THE YEAR 31.3.2010 PREVIOUS YEAR INCOME: CONSTRUCTION ACTIVITY RECEIPTS A 2,353,540,254 6,584,000 BUSINESS FACILITIES RECEIPTS B 55,985,895 56,277,222 OTHER RECEIPTS C 6,252,523 6,710,720 PROMOTIONAL RECEIPTS D 12,251,419 37,901,560 ELECTRICITY GENERATION 14,919,121 16,799,949 STOCK OF SHOPS AT R.MALL -MULUND 191,249,041 190,209,429 INCREASE/ /DECREASE) IN STOCKS 10 (218,729,175) 274,555,611 CLOSING WORK IN PROGRESS RUNWAL PRIDE -MULUND 280,615,633 270,651,123 RUNWAL SYMPHONT/-SANTACRUZ 356,049,199 - GABRIEL PROPERTY MULUND 1,071,378,683 859,137,846 TOTAL RS. 4,123,562,393 1,718,827,459 9 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. UNDER THE HEAD 'MALL UPKEEP AND PROMOTIONAL EXPENSE S', THE ASSESSEE HAS DEBITED RS. 11,67,480/-, BREAK-UP OF WHICH IS AS UNDER: SCHEDULE -G-MALT UPKEEP AND PROMOTIONAL EXPENSES ELECTRICITY CHARGES 1,311,036 (41,018) INSURANCE CHARGES - 254,330 REPAIRS & MAINTENANCE EXPENSES - 38,005 LICENCE FEES 137,584 172,633 LEGAL & PROFESSIANAL FEES - 1,500 WATER CHARGES (281,140) 593,333 1,167,480 1,018,783 OUT OF THIS AMOUNT, THE ASSESSEE HAD ALREADY DISALL OWED EXPENDITURE OF RS. 13,11,036/- ON ACCOUNT OF ELECTRICITY CHARGES, AS S TATED BY THE ASSESSEE AND ALSO ADMITTED BY THE DEPARTMENT. UNDER THE HEAD 'ADMINIS TRATION & SELLING EXPENSES', THE ASSESSEE HAD DEBITED RS. 72,008,371/-. THE DETA ILS OF THESE EXPENSES ARE APPEARING IN SCHEDULE 'E' WHICH FOR THE SAKE OF REA DY REFERENCE, SAME IS REPRODUCED HEREINBELOW: SCHEDULE -E ADMINISTRATION & SELLING EXPENSES AUDIT FEES 110,300 110,300 ADVERTISEMENT 2,866,136 329,526 BOOKS & PERIODICALS 88,680 18,688 BUSINESS PROMOTION EXPENSES 4,914,399 1,256,890 BROKERAGE 2,500,000 - COMPUTER EXPENSES 333,474 534,751 CONVEYANCE EXPENSES 2,460,762 1,882,279 ELECTRICITY CHARGES 2,895,436 535,350 DIRECTORS REMUNERATION 2,100,000 2,100,000 FEES & FORM 105,513 126,976 HOUSEKEEPING EXPENSES 108,730 - INSURANCE PREMIUM 312,035 - MEMBERSHIP & SUBSCRIPTION 324,300 48,540 MISC. EXPENSES 49,549 56, 778 MOR. CAR EXPENSES 975,632 1,045,939 OFFICE REPAIRS & MAINTENANCE 1,159,892 391,043 POSTAGE & TELEGRAM 39,837 33,713 PRINTING & STATIONERY 723,837 696,109 PROFESSIONAL FEES 4,728,139 2,224,312 PROFESSION TAX 2,500 2,500 RATES & TAXES 30,450 - RENT 2,148,925 4,648,660 SALARY 29,285,555 22,846,216 SALES TAX PAID - 98,465 SALES PROMOTION EXPENSES (R. MALL) - 294,420 SCHEDULE -E ADMINISTRATION & SELLING EXPENSES SECURITY EXPENSES 344,189 CAR PARKING REFUND 3,00,000 10 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. SUNDRY BALANCES W/OFF 56,293 - SOCIETY CHARGE FOR FLATS - 228,089 SOCIETY CHARGES FOR SION OFFICE 1,206,952 - STAFF WELFARE EXPENSES 1,360,764 1,594,243 TELEPHONE EXPENSES 1,787,842 1,479,259 TRAVELLING EXPENSES 1,444,932 759,405 TRAINING EXPENSES - 84,270 WEB DESIGNING 28,930 100,722 DONATIONS 6,00,000 8,225,000 (SUBLETTING CHARGES PAYABLE) 1,214,388 1,243,764 72,008,371 52,996,206 9. THE REVENUE'S CASE IS THAT, FOR EARNING OF RENTA L INCOME, AMOUNT OF RS. 1,60,77,911/- SHOULD BE DISALLOWED ON THE GROUND TH AT, THIS MUCH AMOUNT SHOULD BE ALLOCATED FOR THE EARNING OF THE RENTAL INCOME FROM THE AMOUNT OF EXPENSES DEBITED UNDER THE HEAD 'ADMINISTRATION & SELLING EXPENSES' AS APPEARING IN SCHEDULE 'E' ABOVE. INCOME EARNED FROM LEASING OUT OF 'MALL PREM ISES' IS INCIDENTAL TO ITS BUSINESS ACTIVITIES AND THE EXPENSE INCURRED IN THE DUE COUR SE OF ITS BUSINESS ACTIVITIES MUST HAVE ALSO BEEN USED FOR THE PURPOSE OF EARNING OF R ENTAL INCOME. THEREFORE, SOME AMOUNT OF SALARY, ELECTRICITY AND OTHER SUCH EXPENS ES SHOULD BE ATTRIBUTABLE FOR THE EARNING OF THE RENTAL INCOME. WE ARE UNABLE TO APPR ECIATE OR UPHELD SUCH A REASONING; FIRSTLY, THE ASSESSEE IS HAVING HUGE BUS INESS RECEIPTS FROM CONSTRUCTION ACTIVITY AND OTHER BUSINESS ACTIVITIES WHICH IS MUC H FAR MORE THAN RS.250 CRORES AND ONCE ASSESSEE IS CLAIMING THAT EXPENDITURES DEBITED UNDER THE HEAD 'ADMINISTRATIVE & SELLING EXPENSES' HAVE BEEN INCURRED DIRECTLY FOR I TS BUSINESS ACTIVITY, THEN WITHOUT EXAMINING THE ACCOUNTS RELATING TO BUSINESS ACTIVIT Y AND THE NATURE OF EXPENSES DEBITED, THE AO AND THE LD. CIT(A) CANNOT SHIFT THE ONUS TO THE ASSESSEE TO PROVE, WHETHER ANY SUCH EXPENDITURE IS ATTRIBUTABLE FOR TH E EARNING OF RENTAL INCOME. BECAUSE IT IS THE REVENUE WHICH IS CARVING OUT A PR EMISE FOR ALLOCATION OF EXPENDITURE FOR THE PURPOSE OF EARNING OF RENTAL INCOME, AND FO R THAT, IT HAS TO DEMONSTRATE HAVING REGARD TO THE ACCOUNTS MAINTAINED BY THE ASS ESSEE AND NATURE OF EXPENDITURE DEBITED ARE ALSO APPLICABLE FOR THE EARNING OF THE RENTAL INCOME. ONLY IF SUCH PREMISE IS ESTABLISHED THEN ONUS SHIFTS UPON THE ASSESSEE T O SHOW THAT, HOW MUCH AMOUNT OF EXPENSES DEBITED IS ATTRIBUTABLE FOR SUCH INCOME. B UT, IF REVENUE FAILS IN THE FIRST INSTANCE THEN WITHOUT ANY MATERIAL AND BASIS ON REC ORD, NO SUCH ALLOCATION CAN BE MADE, UNLESS THE NATURE OF EXPENSES DEBITED IS DIRE CTLY ATTRIBUTABLE TO THE EARNING OF LEASE RENTAL INCOME AND NOT THE BUSINESS INCOME. SE CONDLY, ONCE A PARTICULAR RECEIPTS IS ASSESSED UNDER A PARTICULAR HEAD, THEN THE COMPU TATION OF INCOME HAS TO BE MADE STRICTLY MADE IN ACCORDANCE WITH THE PROVISIONS DEA LING WITH THE ASSESSABILITY OF THE INCOME UNDER THAT HEAD. IN OTHER WORDS, IF INCOME I S BEING ASSESSED UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' THEN COMPUTATION HAS T O BE MADE ACCORDINGLY THE PROVISIONS LAID DOWN THEREIN. THUS, ON THESE COUNTS , THE REASONING GIVEN BY THE AO AS WELL AS BY THE CIT(A)FOR MAKING THE DISALLOWANCE FO R ADMINISTRATIVE EXPENSES IN THE AFORESAID MANNER CANNOT BE SUSTAINED. 10. MOREOVER, IT HAS BEEN BROUGHT ON RECORD THAT, A SSESSEE HAD ENTERED INTO AN AGREEMENT FOR RENTING, MANAGING AND MAINTENANCE OF R. MALL WITH M/S VEEAR PROPERTY PVT LTD. VIDE AGREEMENT DATED 20.03.2009, THE RECITAL ITSELF CLEARLY ENVISAGES THAT, THE ASSESSEE IS NOT IN A POSITION TO MANAGE T HE MALL, SINCE THEY DO NOT HAVE ANY EXPERTISE AND EQUIPMENTS FOR RUNNING AND MANAGING T HE MALL, THEREFORE, THEY HAVE REQUESTED THE SAID COMPANY TO RUN AND MANAGE THE MA LL. FURTHER THE SAME VERY COMPANY HAS BEEN MANAGING THE MALL SINCE 27TH APRIL , 2004. TILL DATE THE SAID 11 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. COMPANY HAS AN EXPERT TEAM, EXPERIENCE, EQUIPMENTS' AND OTHER NECESSARY INFRASTRUCTURE REQUIRED FOR RUNNING AND MANAGING TH E MALLS. IN THE SAID AGREEMENT, IT HAS BEEN CLEARLY MENTIONED THAT THE PARTIES HAVE EN TERED INTO THE AGREEMENT ON PRINCIPAL TO PRINCIPAL BASIS. CLAUSE 2 CLEARLY PROV IDES THAT, THERE WILL NOT BE ANY CHARGE OR FEES PAYABLE BY THE COMPANY. THE RELEVANT CLAUSE S 2 TO 5 READS AS UNDER:- '2. IT IS HEREWITH CLARIFIED THAT THERE WILL NOT BE ANY CHARGES OR FEES PAYABLE BY THE COMPANY, OTHER THAN COMMON AREA MAINTENANCE CHARGES BEING COLLECTED DIRECTLY BY THE COMPANY FROM THE MALL TENANTS, OWNERS AND OCCUP IERS OF THE SAID COMPLEX. 3. IT IS FURTHER AGREED BETWEEN THAT THE COMPANY SH ALL BEAR AND PAY ALL THE RUNNING, MAINTENANCE COST AS APPLICABLE DURING THE TENURE OF THIS AGREEMENT FOR ALL THE COMMON AREAS. IN ADDITION TO THE ABOVE THE COMP ANY SHALL ALSO BEAR AND PAY THE WATER, ELECTRICITY, AIRCONDITIONING CHARGES OF THE COMMON AREAS FOR RUNNING AND MANAGING THE MALL. 4. THE OWNER UNDERTAKES TO TAKE OUT ADEQUATE INSURA NCE FOR THE COMMON AREA IN THE SAID MALL AND ALSO UNDERTAKES TO KEEP THE EQUIP MENT, MACHINERY, FURNITURE AND FIXTURES IN THE SAID PLACE SUFFICIENTLY INSURED AGA INST LOSS, DEMAND, CLAIM OR DAMAGE BY FIRE WITH AN INSURANCE COMPANY OF REPUTE AND TO MAKE ALL PAYMENTS NECESSARY FOR THE ABOVE PURPOSE. THE OWNER ALSO UNDERTAKES TO TAK E PUBLIC LIABILITY INSURANCE OR THE COMMON AREA IN THE SAID MALL. 5. THE PARTIES HEREBY EXPRESSLY AGREES AND UNDERTAK ES THAT THE COMPANY SHALL HAVE FULL RIGHT TO ASSIGN OR PERMIT AND THIRD PARTY TO C ONDUCT OR MANAGE THE MALL SUBJECT TO THE COMPANY AGREEING TO REIMBURSE OR BEAR ALL THE C OST ETC. ON THAT BEHALF AND ALSO INDEMNIFY THE OWNER AGAINST THE LOSS, COSTS, PENALT IES, DAMAGES CAUSED ON ACCOUNT OF THE COMPANY PERMITTING ANY THIRD PARTY TO MANAGE TH E MALL'. THE ENTIRE RESPONSIBILITY IS ON THE SAID COMPANY AN D ANNEXURE-A OF THE AGREEMENT DEALS WITH THE SCOPE OF WORK OF THE COMPANY WHICH I S AS UNDER: SUPERVISION / MAINTENANCE OF THE FOLLOWING: A. GENERAL SECURITY OF MALL B. HOUSEKEEPING C. COMMON LIGHTS IN PASSAGES AND COMPOUND LIGHTS D. REPAIR AND MAINTENANCE OF ELECTRICAL FITTING AND FIXTURE E. MAINTENANCE OF ELECTRICAL METERS F MAINTENANCE O F ELEVATORS, ESCALATORS G. AIR CONDITIONING OF COMMON PASSAGES H. AMCFOR AIR-CONDITIONING I. MANAGING PARKING FACILITIES J. MUSIC IN COMMON AREA K. LOOKING AFTER THE MAINTENANCE OF BUILDING, NORMA L WEAR AND TEAR L. FIREFIGHTING EQUIPMENT MAINTENANCE M. OVERALL MA INTENANCE OF COMMON AREA. FROM THE CLEAR CUT COVENANTS AND TERMS OF THE AGREE MENT, IT IS ABUNDANTLY CLEAR THAT THE ASSESSEE DOES NOT HAVE TO INCUR ANY ADMINISTRAT IVE EXPENDITURE FOR RUNNING AND MAINTENANCE OF THE MALL AND, THEREFORE, IN THE LIGH T OF THESE FACTS AND BACKGROUND, IT CANNOT BE HELD THAT ANY ADMINISTRATIVE EXPENDITURE SHOULD BE ALLOCATED FOR RUNNING OF THE MALL. 12 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. 11. HOWEVER, ON A PERUSAL OF EXPENDITURE DEBITED UN DER SCHEDULE E, AS INCORPORATED ABOVE, IT IS SEEN THAT THE ASSESSEE HAS DEBITED SUM OF RS.28,66,1361- UNDER THE HEAD 'ADVERTISEMENT' AND SUM OF RS. 49,14,3991- UNDER TH E HEAD 'BUSINESS PROMOTION EXPENSES'. FURTHER, FROM A PERUSAL OF BREAK-UP OF T HESE EXPENSES AS GIVEN IN PAGE 26 OF THE PAPER BOOK WHICH WAS FILED BEFORE THE CIT(A) , WE FIND THAT CERTAIN AMOUNTS HAVE BEEN DEBITED FOR 'MALL UPKEEP & PROMOTIONAL RE CEIPT'. IF THESE EXPENDITURES ARE RELATED FOR EARNING OF INCOME FROM MALL THEN, DEFIN ITELY IT CANNOT BE ALLOWED AS AN EXPENDITURE UNDER SECTION 37(L) I.E. WHILE COMPUTIN G THE BUSINESS INCOME OF THE ASSESSEE, BECAUSE ADMITTEDLY, RECEIPTS FROM THE MAL L IS IN THE FORM OF LEASE RENTAL WHICH HAS BEEN ASSESSED UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY' LIKE IN THE EARLIER AND SUBSEQUENT YEARS. THIS FACT NEEDS PROPE R VERIFICATION AND EXAMINATION BY THE AO WHICH HAS NOT BEEN DONE IN THE PROPER PROSPE CTIVE. ACCORDINGLY, WE ARE OF THE OPINION THAT, THIS MATTER SHOULD BE RESTORED BACK O NLY FOR THE LIMITED PURPOSE OF EXAMINING THE NATURE OF ADVERTISEMENT EXPENSES AND BUSINESS PROMOTION EXPENSES DEBITED UNDER THE HEAD 'ADMINISTRATIVE AND SELLING EXPENSES' AS ENUMERATED IN SCHEDULE E OF THE PROFIT & LOSS ACCOUNT. IF THESE E XPENDITURES DIRECTLY ATTRIBUTABLE TO EARNING OF LEASE RENTAL INCOME THEN, APPROPRIATE DI SALLOWANCE CAN BE MADE, IF AT ALL REQUIRED. WITH THIS DIRECTION THIS ISSUE IS TREATED AS PARTLY ALLOWED FOR STATISTICAL PURPOSES.' RESPECTFULLY FOLLOWING THE AFORE-STATED DECISION OF THE CO-ORDINATE BENCH OF THIS TRIBUNAL IN ASSESSEE'S OWN CASE IN THE IMMEDIATELY PRECEDING AS SESSMENT YEAR IN ITA NO 4777/MUM/2013 FOR ASSESSMENT YEAR 2010-11 VIDE ORDE RS DATED 12-04-2016 , AS FACTS ARE IDENTICAL IN THE INSTANT APPEAL, WE ARE ALSO INCLIN ED TO SET ASIDE THE MATTER TO THE FILE OF THE A.O. FOR VERIFICATION OF THE VARIOUS EXPENSES LIKE BUSINESS PROMOTION EXPENSES , ADVERTISEMENT EXPENSES AND ANY OTHER EXPENSES DEBIT ED TO PROFIT AND LOSS WHICH ARE DIRECTLY ATTRIBUTABLE TO EARNING OF LEASE RENTAL INCOME HAVI NG REGARDS TO THE ACCOUNT OF THE ASSESSEE , WILL BE DISALLOWED BY THE A.O.. IT IS ALSO NOTED TH AT IN THE PRECEDING ASSESSMENT YEAR , THE ASSESSEE SUO MOTU VOLUNTARILY DISALLOWED ELECTRICIT Y EXPENSES INCURRED IN RELATION TO R-MALL BUT THE SAME ARE NOT DISALLOWED IN THE INSTANT ASSE SSMENT YEAR UNDER APPEAL WHICH ASPECT SHALL ALSO BE LOOKED INTO BY THE AO. THIS DISPOSES OF GROUND NO. 1, 2 & 3 RAISED BY THE ASSESSEE IN THE MEMO OF APPEAL FILED WITH THE TRIBU NAL AS SET OUT ABOVE. WE ORDER ACCORDINGLY. 10. IN THIS VIEW OF THE MATTER, AND CONSISTENT WIT H VIEW TAKEN BY THE CO-ORDINATE BENCH OF THE TRIBUNAL, WE RESTORE THIS APPEAL TO TH E FILE OF THE LD. AO AND DIRECT THE AO TO DECIDE THE ISSUE IN ACCORDANCE WITH FINDINGS OF THE TRIBUNAL FOR ASSESSMENT YEAR 2010-11 IN ITA NO.4777/MUM/2013. 11. IN THE RESULT, APPEAL FILED BY THE REVENUE IS ALLOWED FOR STATISTICAL PURPOSE. 13 ITA NO.7048 & 7050/MUM2017 M/S RUNWALL DEVELOPERS PVT. LTD. ITA NO.7050/MUM/2017 12. THE FACTS AND ISSUES INVOLVED IN THIS APPEAL I S IDENTICAL TO THE FACTS AND ISSUES WHICH WE HAVE ALREADY CONSIDERED IN ITA NO.7 048/MUM/2017 FOR ASSESSMENT YEAR 2012-13. THE REASONS GIVEN BY US IN PRECEDING PARAG RAPH IN ITA NO.7048/MUM/2017 SHALL MUTATIS MUTANDIS APPLY TO THIS APPEAL ALSO. THEREFORE, FOR DETAILED REASONS GIVEN IN PRECEDING PARAGRAPH, WE RESTORE THIS APPEAL ALSO TO THE FILE OF THE LD. AO AND DIRECT HIM TO DECIDE ISSUE IN ACCORDANCE WITH FINDINGS OF THE TRI BUNAL IN ITA NO.4777/MUM/2013 FOR ASSESSMENT YEAR 2010-11. 13. AS A RESULT, BOTH APPEALS FILED BY THE REVENUE ARE ALLOWED FOR STATISTICAL PURPOSES ONLY. ORDER PRONOUNCED IN THE OPEN COURT ON 10/04/2019. SD/- SD/- ( RAVISH SHOOD ) (G. MANJUNATHA) /JUDICIAL MEMBER / ACCOUNTANT MEMBER MUMBAI; DATED : 10/04/2019 F{X~{T? P.S / /. .. / COPY OF THE ORDER FORWARDED TO : 1. ! / THE APPELLANT (RESPECTIVE ASSESSEE) 2. '#$ ! / THE RESPONDENT. 3. %$%$ & ( ) / THE CIT, MUMBAI. 4. %$%$ & / CIT(A)- , MUMBAI, 5. ()*$'+ , %$$+ - , / DR, ITAT, MUMBAI 6. *. / / GUARD FILE. / BY ORDER, / (DY./ASSTT. REGISTRAR) %&' (, / ITAT, MUMBAI