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2023 (4) TMI 619 - AT - Income TaxRevision u/s 263 - CIT found fault with the action of the AO accepting the service charges received by it as rental income - According to CIT(E), the assessee trust has claimed deduction u/s 24(a) of the Act on “service charges” received by it and wondered as to how the “service charge” can be included in property income and standard deduction can be claimed and allowed by AO, which action of AO was erroneous and that the assessment order has been passed without basic verification about the allowability of claim under section 24(a) of the Act which is erroneous in so far as it was prejudicial to the interest of revenue - HELD THAT:- These are essential requirements/ necessities and in-extricable part for usage of the property taken on rent by the tenant, and without which they cannot function in the leased out premises. And it can be seen that when the amenities given to the leased out premises/tenant have nexus to the enjoyment of the property, then it can be included in the income from house property as held by the Hon’ble Calcutta High Court [2001 (3) TMI 77 - CALCUTTA HIGH COURT] which has been upheld by the Hon’ble Supreme Court in Shambu Investments Vs. CIT [2003 (1) TMI 99 - SC ORDER] and Raj Dadarkar Associates [2017 (5) TMI 586 - SUPREME COURT] and by Tribunal in assessee’s own case [2013 (7) TMI 1209 - ITAT MUMBAI] wherein the Tribunal was considering whether the assessee was entitled to deduction us/ 24(a) of the Act or not on the composite rent income comprising of income from renting out of property and income from amenities, which was allowed by the Tribunal by relying on the decision in similar case of Sri Satya Sai Trust Since the AO view after enquiring is plausible view it could not have been interfered with unless the Ld CIT(E) has conducted during revisional proceedings enquiry or verified the facts in order to come to a conclusion that AO’s view was erroneous/un-sustainable in law. As noticed once AO has conducted enquiry (on an issue) then the Ld Pr. CIT before holding the order of AO to be erroneous, should have conducted necessary enquiries or verification in order to show that the finding given by the AO on that issue is erroneous/unsustainable in law. Coming back to the present case, once we have found that AO has discharged the duty of investigator (on the issue of deduction claimed u/s 24(a) of the Act which included amenities charges), then before CIT(E) holds the view of AO as erroneous, it was imperative on the part of CIT(E) to have made necessary enquiries or verification and should have arrived at a conclusion that the view of AO was unsustainable in law. Admittedly, in the instant case, CIT(E) has not conducted any such enquiry or verification. In such a scenario, we have to hold that he has initiated revision jurisdiction on mere conjectures, suspicions and surmises, which is not permitted. In such a scenario, his impugned action of holding the claim of assessee (deduction u/s 24(a) of the Act which includes amenity charges) as erroneous and prejudicial to the interests of revenue is untenable - we are of the view that the impugned revision order passed by Ld PCIT is not sustainable in law and assessee succeeds on the legal issue.
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