9911796707
TMI Blog2021 (8) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... Height in Sector 126, Noida. The assessee has shown revenue from operation of Rs. 2,99,57,551/- and miscellaneous income of Rs. 13,67,06,889/-. It was explained that miscellaneous income corresponds to the rental income of Rs. 13,47,68,214/- and income from other sources Rs. 19,36,852/-. 4. During the assessment proceedings, it was explained that income from revenue operation is from common area maintenance charges received from the tenants. The assessee was asked to justify treating income from revenue operation as 'income from business', 5. In its reply, the assessee explained that it is working as contractor for providing repair and maintenance only at the common area and in contracts, these are based on cost plus method, which may fluctuate. The assessee also referred to the relevant clause of the agreement which is as under: "The Lessee shall pay to the Less or the maintenance charges on the basis of actual cost plus 20% thereon which is currently worked out as Rs. T5/- (Rupees Fifteen Only) per sq. ft. on super built up area of 2808 sq. ft., which calculation is based on the presumption that the Lessee shall use the said Premises for 72 hours per week based on average 12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rea as well as other infrastructure facilities like providing security services, maintenance of lift, house-keeping of common area, providing undisrupted electricity and water supply. For this purpose the appellant has to maintain complete infrastructure and man power. Undoubtedly expenses are required to be incurred for maintenance of infrastructure and man power. The appellant has to receive maintenance charges separately from tenants and the expenses incurred are debited from the maintenance charges received. It is pertinent to point out that the maintenance charges are worked out and charges on the basis of cost plus method. The income derived under this head is offered as "income from business and profession. '' The offer of income under different heads i.e Rental Income under the head income from house property and the income from maintenance under the head income from business and profession had been continuously offered and being accepted by the department except for the year under consideration. The assessing officer has rejected the claim of the appellant for the reasons reproduced above. The Ld. AO has not appreciated the facts of the case while giving the findings and a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed to be used by the tenant. Further the Ld. AO has referred the case laws as reproduced above. None of the case laws are applicable to the facts of the case as discussed below:- S. No. Cases laws relied upon by Ld. AO Remarks 1. East India Housing and Land Dev. Trust Ltd. vs CIT (SC) 42 ITR 49 In this case, the company was engaged in the development & construction of shops. The income was received from let out of such shops. There were no separate receipts for maintenance of common facilities as in the case of the appellant. 2. Tinsukia Development Corporation Ltd. vs CIT (Cat) 120 ITR 466 The company obtained leasehold land from government and set up bastis thereon. Income purely from let out of structures. There were no separate receipts for maintenance of common facilities as In the case of the appellant. 3. CIT vs Mithlia Properties Publication & Contractor Enterprises P. Ltd. (Pat) 228 ITR 713 The company constructed godowns for FCI on leasehold land and claimed the rent received as business income. In the case of the appellant, rent received is separately offered as income from house property. There were no separate receipts for maintenance of c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r profession or under the head income from other sources, therefore, the ratio of the above stated judgments is squarely applicable to the facts of the appellant's case and the receipts received by the appellant from common area maintenance charges and for providing other services are to be assessed as income from business and profession. The Assessing Officer was not justified in treating such receipts as income from house property. Assessing Officer is therefore, directed to treat the charges received from common area maintenance and providing other services as income from business and profession." 10. Since the charges received from common area maintenance was treated as 'income from business and profession', the ld. CIT(A) also directed to allow lease rental payment to Noida authority as revenue expenditure. 11. Before us, the ld. DR strongly relied upon the findings of the Assessing Officer and read the relevant findings of the Assessing Officer and through his written submissions placed reliance on the following decisions: a) J.K. Investors Ltd 25 Taxmann.com 12 b) Indian Metal & Metallurgical Corpn 84 Taxmann.com 481 c) Shambu Invesetment Ltd 263 ITR 143 d) K. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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