TaxTMI 
TaxTMI 
2009 (9) TMI 970
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.... disallowance of portion of house keeping charges treated as income from other sources holding that the house keeping charges received by the assessee should be assessed as business receipts for various business services provided to the occupants though they happened to be associated concerns. 2. The Ld. CIT(A) has erred in law and on the facts of the case in deleting the disallowance of depreciation of Rs. 18,53,334/-. 3. On the facts and in the circumstances of the case, the Ld.CIT(A) ought to have upheld the order f the Assessing Officer. 4. It is, therefore, prayed that the order of the Ld.CIT(A) may be cancelled and that of the Assessing Officer may be restored to the above effect. 2. The brief facts of the case are ....
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....urniture, cooler, communication system, electric installation, lift, office building, air conditioners, etc. In addition, it is providing chairs, tables, cup-board, fan, fridge, printer, Xerox machine, scanner, fax-machines and sofa set, whose details are given by the Assessing Officer in his order. 4. On the basis of material collected by the Assessing Officer from the assessee-company, he noted that - (i) There is no written agreement or contract between the assesseecompany and the various group concerns as regards to the nature of services to be provided, rate of each item of service, terms of payment and validity of contracts. (ii) In absence of any contract, it is not possible to work out value of services provided by the asse....
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....chnical services like EDP, internet and other corporate services under one roof. The recipient of such services were the group concerns. This is not an attempt during the relevant previous year. This arrangement was there from A.Y. 1997-98 onwards. As rightly contended the provision of such services and the object behind utilization of properties owned by the appellant should be seen in a proper perspective and not through a narrow compass. The AO obviously took into account the value of services provided by the limited man power but ignoring the major aspect of provision of office accommodation and support services provided by the appellant company. In fact, he has not made any attempt to find out the floor area made available for use by t....
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..... In that case though the properties were let out and charges were subjected to TDS u/s.194(1) still it was held that as per object of exploitation of the property it was for business purpose only. In that view of the matter, the case of the appellant could fall squarely under business head. Accordingly, I hold that house keeping charges received by the appellant should be assessed as business receipts for various business services provided to the occupants though they happened to be associated concerns. 3. Ground No.2 relates to disallowance of depreciation at Rs. 18.53 lacs. The AO for the reasons that the activities of the appellant constitute earning of income under Other Sources, did not allow depreciation though a portion oat Rs. 6....
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.... the business related telephones of the occupants are received through this system. The company has also engaged telephone operator and receptionist for the purpose. The company has also entered into internet. It provides the user of this facility to the occupants. (4) Lab assistance of the company helps in testing the materials, especially of JCIL. The laboratory equipments belong to those companies but company has provided space and personnel assistance for this purpose. The directors of the company are also technically qualified for the purpose. (5) All the Banking operations of all the concerns like filing of cheques, taking papers to the Bank, etc. is handled by Shri Y.K. Mehta of the company. All other support services for the b....
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....There is no reason to either reduce it or change the head. (iv) The logic given by the Assessing Officer in treating the part of the receipt as income from "other sources" is not comprehendible and does not create any logical difference between receipts taken under the head "business" and receipt taken under the head "other sources". Following the rule of consistency, no such distinction should have been created and secondly, it does not at all affect the taxability of the receipt and tax imposed. Therefore, entire exercises merely academic and could have been avoided. (v) Finally, the depreciation cannot be disallowed whether the part of income is assessed under the head "business" or under the head "other sources" as under both t....