TaxTMI 
TaxTMI 
2013 (11) TMI 935
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....f the alleged receipt of Rs.15,00,000 was in respect of specific performance of the contract with M/s Deesha Leasecon Pvt. Ltd. (4) The learned CIT(A) ought to have appreciated that Rs.14,00,000 were duly spent towards specific performance which were not doubted. (5) Without prejudice to the above the learned CIT (A) failed to appreciate that the learned ITO, contrary to the fact, erred in holdng that the alleged expenditure towards specific performance was contrary to the terms and conditions of the said contract. (6) On the facts and circumstances, Your appellant prays that the amount of Rs.14,00,000 (out of the total amount of Rs.15,00,000 received towards the said contract) may be deleted. II. Alternatively, without prejudice and without admitting, your Appellant prays that part of the common expenses may be allowed from the alleged receipts of Rs.15,00,000". 2. Briefly stated, assessee a cooperative housing society has entered into two agreements with M/s Deesha Leasecon Pvt. Ltd on 12.05.205. As per the first agreement M/s Deesha Leasecon Pvt. Ltd w....
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....ing of the society building. It is further expressly and specifically agreed that the said monthly maintenance charges/compensation as specified hereinabove are inclusive of the said contribution that Deesha is liable to make towards the said painting/repainting" 3. Owing to the aforesaid agreements, assessee has taken a stand that the amount of Rs.1,00,000 received by assessee vide first agreement was taxable in assessee's hands as income from other sources, being compensation received from M/s Deesha. As regard the amount of Rs.14,00,000 assessee has taken a stand that the said payment was made to assessee for reimbursing the expenditure incurred by assessee for rendering the services agreed upon in the second agreement and assessee relied upon the aforesaid clause 3 of the agreement for this proposition. AO examined this issue during the assessment proceedings and stated that: "It is further seen from the details of expenses incurred by the society alleged to have been for the purpose of housing of wrap advertisement on the scaffolding that the same have not been exclusively incurred for the purposes of the agreement arrived at by M/s Deesha Leasecon Pvt. Ltd to i....
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....s of Rs.1,00,000 and it was incidental in nature and therefore, Rs.14,00,000 cannot be considered s income of the Appellant". 5. The learned CIT (A) after examining the issue in details has dismissed assessee's contention by stating as under: "7. 7. I have carefully considered the submissions made by the appellant, the contents of the assessment order and also the relevant agreements placed on record as well the copies of the proceedings of Municipal Authorities, permitting to display the advertisements. At the outset there is no dispute as to the amount of Rs.1 lakh received as display charges and offered to tax by the appellant. The issue is with regard to the amount of Rs.14 lakhs received as per second agreement. As per the proceedings of the Municipal authorities permission was granted to display advertisement by way of banner of vinyl plastic of 80x 140 size and the banner was to be supported and displayed on the existing portion of MS scaffolding erected, at . B Wing' from ground to 20th floor at North side external wall, for carrying out the repairs and painting work of the existing high rise building. In other words the scaffolding was erected for the purpos....
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....y for the aforesaid services but also for granting advertising and display rights to M/s.Deesha. In other words, the amount of Rs.14,00,000/- is paid for granting of advertising rights in addition to the amount of Rs.1,00,000/- cited above. Therefore, the appellant cannot state that the amount of Rs.14lakhs is received from M/s.Deesha exclusively for the aforesaid services of Watch and Ward, Maintenance etc. only. Secondly, M/s.Deesha was to contribute towards the painting charges, which is also said to have been included in the afore said amount of Rs.14 lakhs as stated in the agreement. Nevertheless, it is not stated anywhere as to the extent of the area to be painted W amount to be incurred by M/s. Deesha in respect of the painting charges and whether such area to be painted/amount to be incurred has any relation to the display of advertisement by M/s. Deesha. Further it is not the case that M/s.Deesha has agreed to reimburse the entire painting charges incurred by the appellant. The application of amount of Rs.14 lakhs received by the appellant was at its own will and cannot be equated to fulfillment of the terms of the contract that the amount was paid towards reimbursement ch....