TMI Blog2019 (7) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... ve discussions, we respectfully following the decisions of coordinate bench direct the assessing officer to treat the outgoing charges as business income. - ITA No. 6749/Mum/2013 - - - Dated:- 5-4-2019 - Shri Shamim Yahya, Accountant Member And Shri Pawan Singh, Judicial Member For the Appellant : Shri Nitesh Joshi (AR) For the Respondent : Shri Chaudhary Arun Kumar Singh (DR) ORDER UNDER SECTION 254(1)OF INCOME TAX ACT PER PAWAN SINGH, JUDICIAL MEMBER; 1. This appeal by assessee is directed against the order of ld. Commissioner of Income-tax (Appeals)-9, hereinafter referred as ld CIT (A), Mumbai dated 05.09.2013 for Assessment Year 2010-11. The assessee has raised the following grounds of appeal: 1. a) The appellant submits that the order passed by the learned Assistant Commissioner of Income-tax, (hereinafter referred to as the Assessing Officer ) erred in treating outgoing charges amounting to ₹ 37,34,450/- as income under the head Income from House property as against offered under head Profits and gains from business profession as per the return of inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee and ld. Departmental Representative (DR) for the revenue and perused the material available on record. The ld. AR of the assessee submits that the assessee received a sum of ₹ 37,34,450/- as outgoing charges. The assessee has shown the addition under the head Income from Business and Profession while filing return of income. The Assessing Officer treated the said charges under the head Income from House Property instead of Profit Gain from Business Profession holding that outgoing charges are nothing but payments for providing services called maintenance charges, electricity charges, security charges and water charges etc. which are part of rental income, therefore, the same is required to be charged under the head Income from House Property . The ld. AR of the assessee submits that the said outgoing charges are in respect of maintenance of common area, garden, building premises, 24 hour security, parking, attendant, infrastructure maintenance, water and common area, power, annual maintenance in generating power back up. The ld. AR of the assessee further submits that leave and license agreement between assessee and its tenants/lessee/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be directed accordingly. 8. On the other hand the ld. DR For the revenue supported the orders of the lower authorities. The ld. DR further submits that principles of resjudicata are not applicable on the income tax proceedings each and every year facts is to be considered independently. It is not ascertainable if the assessee has filed the necessary documents or not before the assessing officer therefore, the case may be restored to the file of assessing officer for fresh adjudication of the main issue. For ground No. 4 the ld. DR submits that the assessing officer may be directed to verify the facts and re-compute the interest under section 234C. 9. We have considered the submissions of the ld. AR for the assessee and ld DR for revenue and perused the record. The facts leading to raising the grounds no.1 of the appeal are not much in dispute. The assessee has received the outgoing charged apart from the rent. These facts are also indicated in the lease agreements placed on record by the assessee. The assessee offered the said charges under the head business income , however, the assessing officer treated the said outgoing charges as a part of incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ss profits'. In our view, the ratio laid down by the Hon'ble Gujarat High Court in the case of Sarabhai (P.) Ltd. ( supra ) 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 ( supra ), 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 deciphered on the basis of terms and conditions in each case as to the nature of the services that may be provided by the owner of property to its tenants to decide as to whether they are distinct from an activity which is merely because of ownership of the property. In the present cas ..... X X X X Extracts X X X X X X X X Extracts X X X X
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