TMI Blog2011 (12) TMI 690X X X X Extracts X X X X X X X X Extracts X X X X ..... other sources. 2. The facts of the case are that the assessee is engaged in the business of service activities and manufacturing export of garments. The return of income for Asst. Year 2007-08 was filed on 28.10.2007 declaring loss of ₹ 45,420/-. The return was processed u/s 143(1) of the IT Act, 1961 on 8.01.2009. Subsequently the case was selected for scrutiny by issuing notice u/s 143(2) of the Act on 19.9.2008. The notices u/s 142(1) of the Act were issued on various dates as per record. The AO noted that the assessee company was providing house keeping services to its associated concerns. The total receipts of ₹ 8508342/- from such services were credited to the profit and loss account and shown under the head other i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ness income and the balance amount of rs.7883617/- was treated as income from other sources on which the assessee was not entitled for deduction of the expenses as debited to P L a/c. The AO further noted that the assessee provided office accommodation to various sister concerns. In other words, the same had been let out to the sister concerns. Hence the portion of house keeping charges represented the receipts for letting out the property and the same was nothing but rental income. In various judgments, courts have held that the composite rent receipts for providing added auxiliary services. The AO also relied on following decisions in this regard:- 1. CIT vs. Smt. P. Andal Ammal 243 ITR 715 (Mad) 2. CIT vs. Model Mfg. Co.(P) Ltd. (1988) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d following the decisions of the Tribunal in ITA No.261/Ahd/2007 dated 30.09.2009 deleted the impugned addition and allowed the appeal of assessee. Aggrieved by this order of the ld. CIT(A) the Revenue is in appeal before the Tribunal. . None appeared on behalf of the assessee. However, after hearing the ld. DR and considering the material on record, we proceeded to decide the appeal. 5. The ld. DR relied on the order of AO and submitted that no expenses would have been incurred for earning income from other sources . Therefore, no expenses were allowed u/s 57(iii) of the Act. Accordingly, the income of assessee was computed and an amount of ₹ 81,42,775/- was added by the AO. The ld. CIT(A) has wrongly deleted the addition. His ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year also. (iii) If certain part of expenditure incurred by group concerns in receiving services from the assessee company is not genuine or is excessive, then action is required to be taken in their hands. Assessee-company is showing the receipts in full as taxable income. There is no reason to either reduce it or change the head. (iv) The logic given by the Assessing Officer in treating the part of the receipt as income from other sources is not comprehendible and does not create any logical difference between receipts taken under the head business and receipt taken under the head other sources . Following the rule of consistency, no such distinction should have been created and secondly, it does not at all affect the taxability o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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