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TMI Blog2016 (6) TMI 1289X X X X Extracts X X X X X X X X Extracts X X X X ..... and in law, the Commissioner of Income-tax (Appeals) - 17, Mumbai ("the CIT(A)") erred in confirming the action of the Dy. Commissioner of Income-tax - 8(2), Mumbai ("the AO") in bringing to tax an amount of Rs. 475.73 lacs as rent for the alleged consideration for premises usage charges payable by Procter & gamble Hygiene and Health Care Ltd ("PGHH"). 2. The CIT(A) furred erred in holding that: i. the rental income to the Appellant has started accruing as soon as the agreement was executed; ii. the property has been given on rent to PGHH and there exist a relationship of owner and tenant between the Appellant and PGHH; iii. the primary object of the Appellant is to exploit the property by letting out a portion of it to its sister c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The Appellant prays that the said amount (to the extent held as income) be considered as "Income for Other Sources". Ground IV: 1. On the facts and circumstances of the case and in law, the CIT(A) erred in confirming the action of the AO in disallowing Rs. 1047.75 lacs consisting of repairs & maintenance of building, service charges and depreciation on building, on the alleged ground that these expenditure have been incurred in relation to the let out portion of the building. 2. He further erred in confirming the action of the AO of adopting the proportion of the "Space Rented Out" as basis for disallowing the expenditures without rejecting the method of apportionment of expenditure in the ratio of "Net Outside Sales" ("NOS") as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wever, the AO treated the amount received by assessee as income from house property. We found that the provision in the agreement for charge at Rs. 90 per sq.ft. for the built-up area occupied from time to time was, in terms of the understanding of the party, not implemented. Instead, as intended by the parties all along, the cost of common facilities shared by the companies was pooled and borne by the parties in the ratio of respective net sales. In terms of this arrangement, the assessee in fact had paid Rs. 7.63 crores to the said sister concern - such amount being net of the recoveries from such sister concern in respect of its share of common expenses, full break-up of which was furnished by the assessee during the assessment proceedin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as already been decided by Tribunal in assessee's own case in the assessment year 1996-97, wherein the Tribunal in para 12 & 13 has held as under :- 12. Ground No.5 is regarding treating of rental income of Rs. 1,08,00,000/- as income from house property instead of business income and disallowing depreciation of Rs. 16,42,000/-. 13. The assessee has given on rent part of its office premises at Matulya Centre to the Distributor of its products, M/s Proctor & Gamble Distribution Co. Ltd. and received Rs. 1,08,00,000/- as rent for the year. The AO treated this receipt as rental income and disallowed assessee's claim of depreciation of Rs. 16,42,100/-, which the CIT(A) has confirmed in his order. In A.Y.1995-96 the AO has treated this recei ..... X X X X Extracts X X X X X X X X Extracts X X X X
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