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2016 (6) TMI 730 - ITAT MUMBAI

2016 (6) TMI 730 - ITAT MUMBAI - [2016] 49 ITR (Trib) 680 - Income derived from mere letting out of property - receipt of facility charges for providing specific services like house-keeping, security, etc. - business income or income from house property - Held that:- Amount received from the tenants as ‘rent’ for letting of the property was assessable under section 22 of the Act as “income from house property” and the other receipts in respect of the services rendered to the tenants was liable t .....

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(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 Revenue that services by way of housekeeping, security, etc. have been rendered by the assessee. Moreover, it has to be .....

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et-aside the order of the CIT(A) and direct the Assessing Officer to recompute the income in view of the aforesaid directions - Disallowance of expenditure - Held that:- P&L Account pertaining to administrative expenses reveal that various expenses on account of repairs and maintenance, filing fee, post and telegraph, bank charges, accounting charges, audit fee, etc. have been debited apart from expenses incurred on house-keeping and security charges, with which we have dealt with in the ear .....

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. 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 pass .....

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the Ld. AO's action on erroneously treating the facility charges received of ₹ 9,60,0001- as "Income from House Property" as against appellant's claim as "Income from Business or Profession"; 1.1 The CIT(A) erred in ignoring the vital fact that the Leave and license agreement bifurcates the receipts towards rent of ₹ 11,40,000/- and receipts for various facilities of ₹ 9,60,000/- 1.2 The Ld CIT(A) erred seriously in ignoring the remand report wherein .....

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s.1.0 to 1.2 is with regard to the assessability of ₹ 9, 60,000/- received by 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 .....

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satisfied with the explanation of the assessee that the said sum was received on account of certain specific services rendered. As per the Assessing Officer the services rendered by the assessee are not of any special nature but they are of routine nature expected to be provided by a Landlord. Accordingly, it was held that the amount of ₹ 9,60,000/- was also taxable under the head income from house property by treating it as a part and parcel of the rental income. The said decision of the .....

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erms and conditions for provision of services such as housekeeping, caretaker and security, etc., therefore, it was not relatable to the letting out of the premises for which rental income was being received separately. Ld. Representative for the assessee also pointed out that assessee was incurring expenses specifically 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 .....

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i) CIT vs. Sarabhai (P) Ltd.,263 ITR 197 (Guj); and, (iii) ACIT vs. Vijay S. Mallya, 52 SOT 0197 (URO). 5. On the other hand, Ld. Departmental Representative has supported the stand of the lower authorities by reiterating the arguments contained in the respective orders, which we have already adverted to in the paras above and are not being repeated for the sake of brevity. 6. We have carefully considered the rival submissions. Quite clearly, there can be no dispute to the proposition that incom .....

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curity, etc. Assessee has also pointed out that the facility service charges earned by it also require outgoings also inasmuch as it had hired services providers for the same. Quite clearly, the providing of such services do not show that the income by way of facility service charges can be said to be derived from mere ownership of the property. For this reason, the stand of the assessee is that income from such services is liable to be treated as business income . In this connection, it would b .....

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rty, 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 assessable under section 22 of the Act as income from house property and the other receipts in respect of the services rendered to the tenants was liable to be assessed under section 28 of the Act as business .....

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ces 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 Revenue that services by way of housekeeping, security, etc. have been rendered by the assessee. Moreover, it has to be deciphered on the basis of terms and conditions in each case as to the nature of the services that may be provided by the .....

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ns. 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 Acc .....

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