TMI Blog2014 (1) TMI 1895X X X X Extracts X X X X X X X X Extracts X X X X ..... und of the aforesaid discussions and precedents, we do not find any infirmity in the order of Ld. CIT(A), hence, we uphold the same. Disallowance of maintenance charges receipt - CIT(A) noted that these maintenance receipts have been treated as business income from Asstt. Year 2001-02 as approved by ITAT - HELD THAT:- Assessee s income from business in relationship to the maintenance and other service receipts as detailed above has not been disputed by the Revenue in earlier periods. The contracts are same which were there for earlier assessment years as well as for the impugned assessment year. In such circumstances, in our considered opinion, there is no change in the facts and law and hence, departure from earlier practice by the Revenue is not sustainable. This proposition is supported by the decision of Hon ble Jurisdictional High Court in the case of CIT vs. Dalmia Promoters Developers P Ltd. [ 2006 (1) TMI 57 - DELHI HIGH COURT ] . In this case it was expounded that for rejecting the view taken for earlier years, there must be change in facts, situation or law. We further place reliance upon the decision in the case of CIT vs. Excel Industries Ltd.[ 2013 (10) TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the property under consideration was a commercial building and flats were in fact office. The AO proceeded to refer to the circle rate obtained from the Registrar of property. He applied the rate of ₹ 4000/- per sqft.. According to this calculation long term capital gain worked out to ₹ 52,59,685/- as against ₹ 19,22,065/- declared by the assessee. Accordingly, addition of ₹ 34,37,620/- was made towards long term capital gain on sale of office. 4. Upon assessee s appeal Ld. CIT(A) considered the issue. Ld. CIT(A) observed that there is no dispute that circle rate is to be applied if declared sale price is less than the circle rate. That the flats were sold on 9.4.2007 as seen from the agreements for sale. That in case of the appellant, the flats were on lease hold land. That the circle rate as on date of sale of flats i.e. on 9.4.07 was ₹ 3000 per sqft. However, the AO applied the circle rate of ₹ 4000 which is on the basis of circle rate notification dated 4.7.07 and even otherwise, circle rate of ₹ 4000 is in respect of free hold property which have distinguishing feature as compared to lease hold property as regarding permissible ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it was provided that :- Where the consideration received or accruing as a result of the transfer by an assessee of a capital asset, being land or building or both, is less than the value adopted or assessed by any authority of a State Government (hereafter in this section referred to as the stamp valuation authority ) for the purpose of payment of stamp duty in respect of such transfer, the value so adopted or assessed shall, for the purposes of section 48, be deemed to be the full value of the consideration received or accruing as a result of such transfer. 8.1 From the above, it is clear that the extant provision of section 50C were applicable to those properties which are registered. The properties which are not registered do not come under the ambit of section 50C. This position was changed by insertion of Finance Act, 2009 w.e.f. 1.10.2009 by which the word assessable was inserted in those cases where property has not been registered. Thus we find that provisions of section 50C are not applicable in the impugned assessment year. Furthermore, in the case of lease hold property which has not been registered, section 50C cannot be invoked. Furthermore, we note that Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Reimbursement (Maintenance) ₹ 2,07,493/- iv) Housekeeping Charges ₹ 4,84,245/- Total ₹ 3,24,29,316/- AO observed that the income of ₹ 3,24,29,316/- is from the property which are owned by assessee as well from others. AO opined that the maintenance income and other reimbursement like air conditioners, housekeeping, maintenance are in the nature of rental income and are part and parcel of rental income. He further observed that this rental income has been splitted by the assessee to claim the entire expense as business expenditure. As per Section 24 of the IT Act only 30% deduction out of rent amount is to be allowed to the assessee in respect of house property for collection of rent, repair and maintenance of building and there is no separate provision for allowability of expense under any other head of income. In view of above, AO held that the following income received by the assessee is being treated as income from house property: i) Maintenance income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2001-02 and it was approved by the ITAT vide its order dated 30.5.2008 in ITA No. 4530/Del/2004 for Asstt. Year 2001-02. The observation of the ITAT was as under:- 3.3 We have perused the records and considered the matter carefully. The issue raised in this ground is whether the brokerage paid by the assessee in connection with renting out of the premises can be allowed as deduction from the income received by the assessee from maintenance and furnishing charges. The assessee had entered into the agreement with the tenants as per which in addition to the rent payable for the use of the property, the tenants were also required to pay separately for the maintenance and furnishing of the property. The assessee has paid oneKmonth rent in respect of rent of the property and one month charges receivable in respect of maintenance and furnishing to the brokers, who had introduced the tenants. The income received from maintenance and furnishing has been assessed as business income of the assessee and there is no dispute about this fact. Once the income has been assessed under the head 'business', the scope of allowability of expenditure becomes quite wide. While computing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO has treated the business income in the shape of maintenance and other services including reimbursement as income from house property. He claimed that in the assessment order in the concluding computation the AO has treated the entire income as business income. Still he has proceeded to disallow expenditures in this regard by treating the certain portion of the income as income from house property. Ld. Counsel of assessee submitted that assessee has receipts from maintenance and other services including reimbursement. In this regard, proper agreement with the tenants and the recipients of the services are there on record. He claimed that these agreements were in the existence from preceding number of years and in all these years, this income has been treated as income from business and no disallowance has been made. Ld. Counsel of the assessee further referred to the Tribunal decision in assessee s own case for asstt. year 2001-02 wherein such receipts have been accepted as business income. In light of the aforesaid, Ld. Counsel of the assessee submitted that there is no reason for the AO to make a departure from the earlier consistent method. Hence, he pleaded that the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing out of disallowance by the AO is not comprehendible. AO has done some theoretical exercise by bifurcating maintenance receipts in the ratio of property owned vis-avis the total property and accordingly, out of the income in this regard assessee has made disallowance amounting to 70% of income thereof. We find that the above disallowance by the AO is devoid of cogency and the same is not sustainable. 23. We find that the assessee has entered into the maintenance agreement with various parties. These parties included those which are assessee s tenants as well as those to whom the flats had been sold out. As per the maintenance agreement in this regard, the assessee is receiving maintenance charges for building, reimbursement of A/C maintenance and house keeping etc. The assessee is also providing services like running and operation of lifts, cleaning of floors, window panes, white washing etc. Now the above contracts are separate contracts, they are over and above the tenancy contracts. These contracts are in existence from preceding many years. In our considered opinion, these services being provided by the assessee are quite distinct from the Rent (tenancy) agreement. These ..... X X X X Extracts X X X X X X X X Extracts X X X X
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