NEWS

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.

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