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2017 (8) TMI 1290 - ITAT MUMBAICompensation received for providing amenities to the tenant - Income to be taxed under which head Whether “Income from house property” or “Income from business” - providing furniture and other facilities including car parking, benefit of sanitary fittings, water supply, additional electricity supply for which separate agreement has been entered into - Held that:- Compensation received for providing amenities is also to be assessable under the head “Income from house property”, more particularly, when the building is let out to the tenant to whom amenities are also provided by way of separate agreement which is inseparable from the leave and licence agreement entered into with the tenant for letting out premises. Also TDS is deducted under The head TDS on rent as per 194I. Similar decision is taken by CIT(A) in assessee's own case for AY 2008-09 and taxed the whole Income under the Head House Property. The CIT(A), after considering relevant facts, has rightly upheld the action of the AO. We do not find any error in the order of the CIT(A); hence we reject the ground raised by the assessee. Disallowance of total expenditure claimed by the assessee against business receipts as the same are treated as compensation receipts and are taxed under the Head Income from House Property - standard deduction provided u/s 24 - Held that:- On perusal of the details filed by the assessee, we find that the assessee has incurred an amount of ₹ 44,44,226 towards electricity expenses and claims that the same has been reimbursed by the service receiver which is included in the compensation provided for amenities. Therefore, we are of the view that any amount paid towards reimbursement of electricity charges needs to be excluded for the purpose of compensation received from providing amenities for the purpose of computation of “Income from house property”. Accordingly, we set aside the issue to the file of the AO and direct the AO to examine the claim of the assessee in regards to the details furnished. In case it is found that electricity charges incurred and reimbursed is included in compensation payments, then the AO is directed to exclude such charges for the purpose of computation of gross receipts under the head “Income from house property”. We further direct the AO to consider reimbursement of electricity charges and allow expenditure incurred by the assessee for providing such services separately under the head “Income from other sources”. Accordingly, the ground raised by the assessee is partly allowed, for statistical purposes.
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