9911796707
TMI Blog2013 (12) TMI 896X X X X Extracts X X X X X X X X Extracts X X X X ..... lowing nature: (i) Leave and License Agreement (ii) Maintenance and Amenities Agreement (iii) Car parking space agreement (iv) Mechanical facilities agreement (v) Hire agreement for renting of fittings etc. 2.1. The assessee's returns of the above rental income as house property income has been accepted in earlier years. The assessing officer in this year proposed the assessee as to why the entire income should not be treated as income from other sources. The assessee contended that all these agreements together constitute a composite let out of one property. The multiple agreements for same property were executed as the property taxes in Mumbai are exorbitant and in order to pay the municipal taxes only on ratable value, different agreements were executed and the municipal taxes were paid on agreement no. 1, which comes in the purview of Mumbai Corporation ratable value. The assessing officer held the amount of Rs. 30,93,639/- i.e. first agreement to be chargeable under the head "Income from house property" and the remaining amount attributable to 4 agreements was held as income from other sources by following ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction. Keeping in view the nature of activities of the tenants/lessees, the amenities are provided by the assessee to exploit the property in most profitable manner. In the present case, the assessee made separate agreements on 18.06.2006 with M/s Max New York Life Insurance Co. Ltd., Mumbai in respect of the premises situated at situated at 386, (second floor) Veer Savarkar Marg, Prabha Devi, opposite Sidhi Vinayak Temple, Mumbai-400025 which was leased out during the year under consideration with the amenities like high end air conditioning plant. lift water supply with power back up, fittings, furnishings and fixtures like wooden cabins and wooden empanelling. Without these amenities, the bare building is of no use. which is a common feature in any property. For a property to be used as residential certain kinds of amenities and fixtures would be required or else people cannot inhabit it ... such as kitchen, ventilations, electrical fittings etc. and the same goes for a commercial property without some amenities such as provision for airconditioning and cabins, it cannot be useful for any purpose. Therefore, just because there is something beyond the bare structure that is being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er supply with power back up, fittings, furnishings and fixtures like wooden cabins and wooden empanelling etc let out to the tenants are incidental to letting out the building being integral part of the letting. (d) As regards income of Rs.22,85,505/- on account of maintaining the said premises including common area and providing housekeeping services of the premises to the lessee it is observed that the same was received for maintenance of common area and facilities. The assessee has incurred some costs to provide this service including Rs.77,640/- (Rs.6,740/- per month) paid to the Group Housing Society where the property is situated. The said income of Rs.22,85,505/- appears to be very high as compared with the rental income of Rs.30,93,639/- and the direct expenses of just Rs.77,640/-. It defies any logic that such a large revenue of Rs.22,85,505/- will be generated from an expenditure of Rs.77,640/-. Thus the income covered by maintenance contract will also be treated as "income from house property." 3.6 The appellant has also placed reliance on the decision of Hon'ble Supreme Court in the case of Shambhu Investment (P.) Ltd. vs. CIT(2003) 263 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ead 'income from business'. or under the head 'income from other sources'. 3.7. It has also been contended on behalf of the appellant that if the income amounting to Rs.76,40,1611- (as mentioned in columns (b),(c),(d) and (e) in para 3.4 above) are to be assessed under the head "income from other sources", Then expenses under section 57 of the Act. I am inclined to agree with the contention raised by appellant. I also find that the interest of the Revenue will nor be adversely affected if the impugned income IS allowed to be computed under the head "Income from house property" as the allowance of Rs.22,92,048/- allowable under section 24 @ 30% of such income may be found lower than the amount of depreciation and expenses otherwise allowable under section 57 of the Act. Accordingly, the Assessing officer is directed to treat the income of Rs. 76,40,161/- under the head "Income from house property" and allow deduction under section 24(a) of the Act. As a result, Grounds of appeal no. 1 and 2 raised by the appellant are allowed." Aggrieved, the Revenue is before us. 3. Ld. DR relied on the order of assessing officer. 4. Ld. Counsel for the assessee vehem ..... X X X X Extracts X X X X X X X X Extracts X X X X
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