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2015 (7) TMI 912 - ITAT DELHI

2015 (7) TMI 912 - ITAT DELHI - TMI - Eligibility of deductions allowable u/s 24 - Computation of income - AO assessed the contractual receipts of ₹ 11,50,000/- as income from other sources and not as income from house property as claimed by assessee - Held that:- There is marked change in the terms of agreement and, therefore, it cannot be held that the entire receipts were towards rent. In the original agreement as per clause 16, the maintenance charges were paid to the society of the bu .....

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o the society were not part of rent and, therefore, the submission of ld. Counsel cannot be accepted.

CIT(A) assessed the contractual receipts of ₹ 11,50,000/- as income from other sources and not as income from house property as claimed by assessee - Decided in favour of revenue. - ITA no. 774 /Del/2014,ITA no. 775 /Del/2014 - Dated:- 23-7-2015 - Shri S.V. Mehrotra, J. For the Petitioner : Shri S.K. Chaturvedi CA For the Respondent : Shri Robin Rawal JCIT ORDER PER S.V. MEHROTR .....

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from three companies, namely, M/s A.K. Govil & Company, M/s GPPL and M/s Stem Infra. Besides, the assessee had rental income from business and other sources. She had filed her return through e-filing declaring a loss of ₹ 6,48,890/- The AO observed that AIR information had been generated in respect of the assessee as under: (i) Rental income ₹ 950000/- from Stem Infra Services Pvt. Ltd. (ii) Contractor receipt amounting to ₹ 550000/- from Stem Infra Services Pvt. Ltd. 3. Th .....

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roperty. The reconciliation of the receipt is as follows: Rent Income: Net of TDS - Rs,. 311269/- + 311269 + 83010 + 83010 ( TDS -16.6% - 161452) Contractor income: ₹ 268878 + 268878 + 586404 ( TDS - 12464 + 13496 ) " 4. After considering the aforementioned reply, the AO observed as under: On going through the reply of the assessee, it is noticed that reply of the assessee is confusing and contradictory itself. On the one hand, the assessee says that she had received ₹ 15.5 lacs .....

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as Rent is nearly 16.6 % whereas the TDS on ₹ 11,50,000/- shown as Contracts receipt is 2% only. Therefore, the receipts of ₹ 11,50,000/- cannot be taxable under the head of Income from House Property and hence, the assessee is not entitled to receive the deductions allowable u/s 24 of Income Tax Act. In view of this, the contract receipt of ₹ 11,50,000/- are deducted from the income from house property and are being assessed under income from other sources. 5. The AO, accordin .....

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ction of Assessing Officer by assessing the amount of maintenance at ₹ 11,50,000/- as income from other sources instead of income under the head House Property along with the amount of rent at ₹ 9,50,000/-. 6. The sole issue in the present appeal is whether the sum of ₹ 11,50,000/- realized by assessee as contract receipt is to be taxed as rental income under the head Income from house property as claimed by assessee or to be treated as income from other sources as held by lowe .....

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e block C&D 14(A), Factory Road, South of Ring Road, near Safdarjung Hospital, New Delhi, excluding terrace, was leased out at a monthly rent of ₹ 3,75,000/- as per covenant 13 of the lease-deed. He pointed out that this lease-deed was executed by three lessors, namely, Abhishek Govil (assessee), Mrs. Parul Govil and Mrs. Somya Salwan (assessee). He submitted that w.e.f. by addendum dated 1-4-2008 to lease deed dated 6-12-2006 , clause 13 was substituted as follows: To take on lease th .....

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f ITAT in the case of Suguna Kaur Vs. ACIT (ITA no. 4117/Del/2012), wherein the ITAT , inter alia, has observed as under:- …… In our considered view, character of income cannot be changed either by entering two agreements or by making other evidence. The amount of license fee earned by assessee on account of two agreements in fact is on account of property given on license and the entire © income of the property, in our considered view, has to be treated as income from house p .....

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nd not by assessee. 11. I have considered the submissions of both the parties and have perused the record of the case. As per the decision of Hon ble Calcutta High Court in the case of CIT Vs. Kanak Investments (Pvt.) Ltd. (1974) 95 ITR 419(Cal), where composite rent is received by the assessee from its tenants it should be split up and the amount attributable to the building only should be computed under section 9(1) of the Indian Income-tax Act, 1922, while the amount attributable to the ameni .....

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ly to the maintenance Society of the building (in addition of the monthly rent). 'Such payments shall be deemed full settlement of the Lessee's Obligation -towards any charges or common facilities like running cost of lifts, lighting, common space, staircase, ground cleaning, maintenance of lawns or parking etc. Any enhancement of the same shall be borne by lessee. 17. The said maintenance charges shall be paid on the basis of the actual amount demanded by the society and the same shall .....

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cted with the general maintenance cleanliness and upkeep of the entire building in the Demised Premises including, staircases, corridors passages etc. on a daily basis and ensure that the Demised Premises is in good condition at all times during the term of the Lease Deed . 02. The First Party shall repair and renew and so far as appropriate, paint, whitewash and color the building in the Demised Premises. 03. The First Parry Shall Keep the Demised Premises furnished as it is at the time of hand .....

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s of agreement and, therefore, it cannot be held that the entire receipts were towards rent. In the original agreement as per clause 16, the maintenance chares were paid to the society of the building hired by lessee which was in full settlement of the lessee s obligation towards any charges for common facilities running cost of lifts, lighting, common space, staircase, ground cleaning, maintenance of lawns or parking etc. Any enhancement of the same was to be borne by lessee. However, in the am .....

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assessee has shown rental income of ₹ 1,56,48 0001-,. Assessee has purchased the property Unit 1 & 2, Ground Floor, Lower Parel, Mumbai in May, 2008 and 'let it out to the ICICI Prudential Life Insurance Company Ltd. Assessee has, made two separate agreements for leasing out of the property. First agreement 'is for the leasing out of the house and second agreement is for "provision of amenities and services". The company has to pay to the assessee a sum of RsA,50,000 .....

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9,668/- Assessee is earning income from provisions of services and amenities. As this is a service agreement and not related to letting out of the property, this income should be income from other sources and "30% statutory deduction claimed u/s 24(a) should not be allowed from income from provision of amenities and services. Therefore, vide order sheet entry dated 01.12.2011, counsel was asked to explain:- "Explain why the income from "Service agreement" for Mumbai property .....

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