TMI Blog2016 (6) TMI 730X X X X Extracts X X X X X X X X Extracts X X X X ..... t in the case of Sarabhai (P) Ltd.(2002 (11) TMI 32 - GUJARAT High Court ) covers the instant situation. Undisputedly, the ‘facility service charges’ are being received by the assessee in return of providing specific services like house-keeping, security, etc. To the similar effect is also the judgment of the Hon’ble Madras High Court in the case of A.K.Complex (2007 (6) TMI 177 - MADRAS High Court ), which was relied upon by the assessee before us. The argument of the Revenue that services rendered by the assessee are not of special nature, and they are of routine nature expected to be provided by the Landlord, is of no consequence to decide the controversy in question. This is for the reason that factually it has not been disputed by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ine the allowability of expenditure afresh in the aforesaid light and thereafter recompute the income of the assessee. Thus, on this issue the assessee succeeds for statistical purposes. - ITA No. 4886/MUM/2014 - - - Dated:- 15-6-2016 - Shri G. S. Pannu, Accountant Member And Shri Joginder Singh, Judicial Member For the Appellant : Shri Prakash Jhunjhunwala For the Respondent : Shri Aarsi Prasad ORDER Per G. S. Pannu, AM The captioned appeal filed by the assessee pertaining to assessment year 2009-10 is directed against an order passed by CIT(A)-9, Mumbai dated 02/05/2014, which in turn arises out of an order passed by the Assessing Officer under section 143(3) of the Income Tax Act, 1961 (in short the Act ) dated ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee as facility service charges . In the course of assessment proceedings, the Assessing Officer noticed that assessee had given on rent a property, on which it was receiving rent of ₹ 13,80,000/- and facility service charges of ₹ 9,60,000/-. In so far as, the assessability of rent received of ₹ 13,80,000/- is concerned, the Assessing Officer did not dispute that the same was assessable under the head income from house property . The receipts by way of facility service charges of ₹ 9,60,000/- was returned by the assessee as assessable under the head business income , which was objected to by the Assessing Officer. According to Assessing Officer, the amount of ₹ 9,60,000/- was also received from t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly for rendering such services and for that matter he referred to the fact that assessee had incurred house-keeping expenses of ₹ 5,34,900/- and security charges of ₹ 4,77,000/-. The Ld. Representative for the assessee explained that in fact, during the year under consideration assessee had incurred a small loss as the service provider had recovered higher amount from the assessee than the facility service charges earned by the assessee. In support of the submissions that such charges are not taxable under the head house property income but under the head business income he has relied upon various decisions namely; (i) A.R. Complex vs. ITO, 292 ITR 615(Mad);(ii) CIT vs. Sarabhai (P) Ltd.,263 ITR 197 (Guj); and, (iii) ACIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Gujarat High Court in the case of Sarabhai (P) Ltd., which lays down that if the owner of a property carries on upon the property some activities which results in profits and gains arising, not from the ownership but from use thereof, such profit and gains would be chargeable to tax as business income and not income under the head income from House Property . In fact, in the case before Hon ble Gujarat High Court, assessee was owner of the property, which was let out to the tenants. Apart from letting out, assessee was also rendering certain services by providing various amenities for which amount was being separately earned. The Hon ble High Court held that amount received from the tenants as rent for letting of the property was assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in asserting that the same be taxed as business income . Thus, on this aspect, we set-aside the order of the CIT(A) and direct the Assessing Officer to recompute the income in view of the aforesaid directions. In the result, on this ground assessee succeeds. 7. The second Ground raised by the assessee is with regard to the disallowance of expenses of ₹ 18,96,428/-. It has been explained that the expenditure was disallowed by the Assessing Officer on the ground that there was no business achieved during the year. Ld. Representative for the assessee pointed out that the said ground has inadvertently not been decided by the CIT(A). 8. As per the assessee, the expenses debited in the P L Account are routine expenses which are lia ..... X X X X Extracts X X X X X X X X Extracts X X X X
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