2015 (12) TMI 388

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....ng the addition of Rs. 2,72,74,672/- ignoring the facts that the relevant clause in lease agreement entered into between the assessee company and its tenant was a colourable devise to divert receipts/income of Rs. 2,72,74,672/- to the other company to avoid tax liability in its hands and without incurring any tax liability in the hands of other company ignoring the judicial pronouncements of the Hon'ble Apex Court relied upon by the AO as follows : (i). CIT vs. McDowel (SC) (ii). CIT vs. Durga Prasad More, 82 ITR 540 (SC) 2. Whether in the facts and circumstances of the case, the Ld. CIT(Appeals) has erred in law in deleting the addition of Rs. 2,72,74,672/- made by the AO with her confirmed observations that receipts o....

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....orts Parks Pvt. Ltd. The AO completed the assessment of assessee by adding a sum of Rs. 2,72,74,672/- received as maintenance charges by assessee's subsidiary company M/s. IHDP Home Interiors Exports Parks Pvt. Ltd, to the income of assessee observing that the agreement entered into for providing services is a collusive agreement, entered only with a view to divert rental income of the assessee company because the maintenance charges are the integral part of license agreement entered into between the assessee-company and the tenants of the premises. He therefore, considering the law laid down in the cases of Durga Prasad More, 82 ITR 540(SC) and CIT vs. McDowell, made the impugned addition to the income of the assessee. Aggrieved assessee c....

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....nants as per separate agreements entered into between the said namely IHDP Home Interior Export Parks Private Ltd. and the tenants. It is, therefore, seen that there is no question of diverting the rental income. The AO was also expected to consider the audited annual accounts of IHDP Home Interior Export Parks Private Ltd. as well as the statement of Income and Income Tax Return filed by namely IHDP Home Interior Export Parks Private Ltd. for A.Y. 2009-10 and the assessment order passed u/s. 143(3) for A.Y. 2008-09 while passing the assessment order of the appellant company. It appears that it has not been done by AO. Considering the legal and factual position, I am of the considered opinion that on the facts and circumstances of the case,....

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....ng under an agreement entered into between the assessee company and the tenants. It is also born out on record that maintenance charges, whatsoever, were paid by the tenant to another company namely, M/s. IHDP Home Interiors Exports Parks Pvt. Ltd. under a separate agreement. It is also not in dispute that the lifts, generator, fire equipments etc. installed in the premises were not owned by assessee company, but by the other company who rendered maintenance services and received the maintenance charges. It is also worthwhile to note that the income returned by the assessee-company in the same fashion in the assessment year 2010-11 and 2011-12 have been accepted by the Assessing Officer vide assessment orders u/s. 143(3) dated 08.02.2013 an....