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2018 (9) TMI 785 - AT - Income TaxTreatment to the income received by the assessee from service charges - head of income - house property OR business income - allowance of substantial expenses claimed by the assessee against the said income - Held that:- We are unable to understand what exactly are the services that are required to be rendered to collect the common electricity charges from the tenants that can be termed as an independent business activity of the assessee. Even the exact nature of the balance amount received by the assessee on account of service and maintenance charges is not very clear from the details furnished by the assessee and if quantum of such amount is compared, vis-a-vis the substantial rental income received by the assessee, it does not appear that the service and maintenance charges were generated by the assessee from any business activity carried on independently. Find merit in the contention of the D.R. that the service and maintenance charges received by the assessee were only incidental to rental income and since the said activity was ancillary to the main activity of letting out the properties, the service and maintenance charges were chargeable to tax as income from house property as rightly held by the Assessing Officer. As regards the alternative claim of the ld. Counsel for the assessee that the assessee-company was engaged in other business activities during the earlier years and there was only temporarily suspension of the said activities during the year under consideration due to lull in the business, we find that this aspect has not been specifically considered either by the Assessing Officer or even by the ld. CIT(Appeals). Since the issue relating to the claim of the assessee for various business expenses is consequential to this issue, we restore the issue also to the file of the Assessing Officer for deciding the same afresh. Addition in respect of deemed rental income from the property at Qutub Institutional area, New Delhi - Held that:- We set aside the impugned order of the ld. CIT(Appeals) on this issue and restore the matter to the file of the Assessing Officer for deciding the same afresh after verifying the exact date of sealing of the property by Delhi Municipal Corporation from the relevant documentary evidence. Ground No. 3 of the Revenue’s appeal is accordingly treated as allowed for statistical purposes. Deemed rental income from the property at Silver Arch Apartments - Held that:- CIT(Appeals), in our opinion, therefore, was not justified in deleting the addition the property at Silver Arch Apartments - Held that:- CIT(Appeals), in our opinion, therefore, was not justified in deleting the addition made by the Assessing Officer on this issue on the wrong presumption n made by the Assessing Officer on this issue on the wrong presumption that the possession of the property was already handed over. As rightly contended by the ld. D.R., the possession of the property remained with the assessee during the year under consideration and the assessee being the owner in possession of the property, the notional rental income from the same was chargeable to tax in the hands of the assessee under section 23(1)(a) as rightly held by the Assessing Officer. We, therefore, set aside the impugned order of the ld. CIT(Appeals) giving relief to the assessee on this issue and restore that of the Assessing Officer. Ground No. 4 of the revenue’s appeal is accordingly allowed. Deemed dividend u/s 2(22)(e) for the loans received from Devbhoomi Awas Limited and M/s. Arcus Limited - Held that:- Addition made by the Assessing Officer under section 2(22)(e) in respect of loans received from Devbhoomi Awas Limited and M/s. Arcus Limited by treating the same as deemed dividend under section 2(22)(e) are deleted by the CIT(Appeals) after having found that the said loans had been taken by Turner Morrison Land Limited (TMLL) in the earlier years and the same were transferred to the assessee-company as a result of merger of TMLL with the assessee-company. He also found that the assessee-company was not the shareholder of both these companies when the loans in question were actually received. At the time of hearing before us, the ld. D.R. has not been able to bring anything on record to dispute these findings of fact recorded by the ld. CIT(Appeals) while deleting the addition made by the AO under section 2(22)(e). Addition made on the basis of ITS data - Held that:- It is observed that the difference in relevant ITS data as noted by the Assessing Officer was reconciled by the assessee during the course of appellate proceedings before the ld. CIT(Appeals) and after considering the same, the ld. CIT(Appeals) directed the assessee to produce all the relevant details in support of the reconciliation for verification before the AO. This opportunity given by the ld. CIT(Appeals) to the AO to verify the reconciliation prepared and furnished by the assessee from the relevant details and documents, we are of the view that the revenue cannot be said to have any grievance from the order of the CIT(Appeals) on this issue. Addition u/s 14A read with Rule 8D - Held that:- No disallowance under section 14A can be made if there is no exempt income actually received by the assessee in the relevant year. We accordingly delete the disallowance made by the Assessing Officer and enhanced by the ld. CIT(Appeals) under section 14A read with Rule 8D. See case of Cheminvest Limited [2015 (9) TMI 238 - DELHI HIGH COUR].
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