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TMI Blog1984 (12) TMI 29X X X X Extracts X X X X X X X X Extracts X X X X ..... city, use of lifts, supply of water, maintenance of staircases and for the watch and ward facilities for the tenants. Before the Income-tax Officer, the claim of the assessee was that the service charges received by the assessee should be treated as business income. However, the Income-tax Officer did not accept the claim of the assessee and treated the service charges as income from property. The assessee also claimed depreciation on the fans installed in the property situated at 40, Strand Road. Since the income from the said property was assessable under section 22 of the Income-tax Act, 1961, the Income-tax Officer disallowed the claim of the assessee as regards depreciation on fans. The assessee preferred appeal against the said asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of water, maintenance of stair cases and watch and ward facilities to the tenants constituted separate activities distinct from the letting out of the property and were not incidental to such letting out ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the service charges realised were not part and parcel of the income derived from house property assessable under section 22 of the Income-tax Act, 1961, and that they were assessable under the head of 'Income from other sources' ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that depreciation on fans fitted to portions of the building let out was an allowable expenditure under sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It is not in dispute that the service rendered and charged by the assessee consisted of supply of electricity, providing electric lifts, the maintenance of staircases and lighting of common passages, corridors and staircases and providing watch and ward facilities. The contention of the Revenue is that the income from service charges falls within the specific head being income from house property. Even if the service charges may indirectly be covered by another head, such income cannot be taxed under the head " Other sources ". The primary source is the house property income and service charges are incidental to the income from house property. The contention of the Revenue, however, cannot be accepted, on the facts and in the circumstances ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... separate item of receipt. The rent and service charges have been separately shown and accounted for as consideration for different things. The Tribunal in coming to its conclusion that the charges received for amenities furnished by the landlord to the tenants were assessable to income-tax as income from other sources and not as income from house property relied on the case of Karnani Properties [1971] 82 ITR 547 (SC) and the observation of Lord Macmillan in the case of Salisbury House Estate Limited v. Fry [1930] 15TC 266 (HL). This court in the case of Kanak Investments [1974] 95 ITR 419 (Cal), took the view that even where a composite rent is received, the amount attributable to the amenities provided by the assessee to the tenants shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessee cannot claim deduction for depreciation unless the provisions of section 56(2)(iii) are attracted. The assessee, no doubt, is entitled to deduction of the expenditure incurred wholly and exclusively for the purpose of making or earning income from service charges. The Tribunal, without finding the fact, hold that the assessee is entitled to deduction but the quantum of deduction was left to the Income-tax Officer. Since the Tribunal has not found out the facts as regards the claim of the assessee for depreciation on fans, we are unable to answer the third question referred to us. We, therefore, decline to answer the third question.
There will be no order as to costs.
DIPAK KUMAR SEN J.-I agree. X X X X Extracts X X X X X X X X Extracts X X X X
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