Tuesday, October 19, 2021
HomeNEWSITAT deletes disallowance of Expenses claimed against Lease Rent against Hero Fin...

ITAT deletes disallowance of Expenses claimed against Lease Rent against Hero Fin Corp

In a relief to Hero Fin Corp, the Income Tax Appellate Tribunal (ITAT), Delhi Bench deleted disallowance of expenses claimed against lease rent.

The assessee, Hero Fin Corp. has been earning lease rent from the lease charges of cars, plant & machinery given on hire to M/s Hero Moto Corp. Ltd. The AO held that the income of the hire charges are to be chargeable under the head “income from other sources” but not under the head “business and profession”. The AO held that the assessee is NBFC and doing finance activities and earning of lease rent from plant & machinery is not the business of the assessee company.                                                                                                                               The CIT (A) deleted the addition holding that the revenue having accepted all along that the lease rental income earned as business income cannot suddenly change the tract and consider the business income as income from other sources.

The CIT (A) held that it becomes all the more relevant when the exercise to change the heads business or other sources is purely academic having no impact on the revenue. The Assessing Officer has not brought out any new facts or circumstantial to justify the change in opinion regarding head of income. Therefore, disallowance made by the AO in the impugned order is deleted.

The coram of Amit Shukla and Dr. B. R. R. Kumar having gone through the rationale given by the Assessing Officer which is not the correct position of the law, the order of the CIT(A) giving relief based on the stand of the revenue for the earlier years and on going through the provisions of Section 71, held that such change of head of income is an infructuous academic exercise and accordingly the appeal filed by the revenue is hereby dismissed.


Pradeep Sharma
I am a CS Student. I believe, the knowledge & wisdom that reading gives has helped me shape my perspective towards life, career, and relationships. I enjoy meeting new people & learning about their lives & backgrounds. My mantra is to find inspiration from everyday life & thrive to be better each day.

Leave a Reply

Follow Us


Recent Posts

GST audit

GST Audit Checklist – 7 Essential Checkpoints For a Perfect GST Audit Tool

GST was introduced in the nation to ease the taxpayers' efforts and bring uniformity in the taxation structure of India. Businesses with multiple registrations still...

CBDT clarification regarding carry forward of losses

CBDT clarification regarding carry forward of losses in case of change in shareholding due to strategic disinvestment Aims to make disinvestment deals more attractive for...
Credit Guarantee

Emergency Credit Line Guarantee Scheme modified and Extended till 31.03.2022

Ministry of Finance vide press release 1759251 dated 29th September 2021 has extended the scope of ECLGS’ and scheme extended till 31.03.2022 or till...

Statutory Compliance Calendar for October, 2021

About ARTICLE: This article contains various Compliance requirements for the Month of October, 2021 under various Statutory Laws. Compliance requirement under Income Tax Act, 1961 Sl. Compliance Particulars Due...
e invoicing

e-Invoicing Under GST : 7 Positive Impacts on Small & Medium Businesses

e Invoicing in GST is the new face of the GST structure in India. It is a positive step taken by the government to...

Most Popular