TaxTMI 
TaxTMI 
2016 (6) TMI 730
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....rt 'the Act') dated 05/12/2011. 2. In this appeal, assessee company has raised the following Grounds of appeal:- " The appellant company prefers an appeal against an order dated 02/05/2014 passed Ld. Commissioner of Income Tax (Appeal) 9, Mumbai on following amongst other grounds each of which are without prejudiced to any other:- 1.0 On facts and circumstances of the case and in law, Ld. CIT(A) erred in confirming the Ld. AO's action on erroneously treating the facility charges received of Rs. 9,60,0001- as "Income from House Property" as against appellant's claim as "Income from Business or Profession"; 1.1 The CIT(A) erred in ignoring the vital fact that the Leave and license agreement bifurcates the receipts towards ren....
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....ed and, therefore, the same was liable to be assessed under the head "income from house property". The Assessing Officer was not satisfied with the explanation of the assessee that the said sum was received on account of certain specific services rendered. As per the Assessing Officer the services rendered by the assessee are not of any special nature but they are of routine nature expected to be provided by a Landlord. Accordingly, it was held that the amount of Rs. 9,60,000/- was also taxable under the head income from "house property" by treating it as a part and parcel of the rental income. The said decision of the Assessing Officer has also been affirmed by the CIT(A). As per the CIT(A), the 'facility service charges' of Rs. 9,60,000/-....
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..... Departmental Representative has supported the stand of the lower authorities by reiterating the arguments contained in the respective orders, which we have already adverted to in the paras above and are not being repeated for the sake of brevity. 6. We have carefully considered the rival submissions. Quite clearly, there can be no dispute to the proposition that income derived from mere letting out of property is liable to be assessed only under the head "income from house property". Thus, there is no dispute between assessee and the Revenue with regard to the rental receipts of Rs. 13,80,000/-, which have been received for letting out the property. So however, the position canvassed by the assessee is that apart from letting out of prop....
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....ther receipts in respect of the services rendered to the tenants was liable to be assessed under section 28 of the Act as 'business profits'. In our view, the ratio laid down by the Hon'ble Gujarat High Court in the case of Sarabhai (P) Ltd.(supra) covers the instant situation. Undisputedly, the 'facility service charges' are being received by the assessee in return of providing specific services like house-keeping, security, etc. To the similar effect is also the judgment of the Hon'ble Madras High Court in the case of A.K.Complex (supra), which was relied upon by the assessee before us. The argument of the Revenue that services rendered by the assessee are not of special nature, and they are of routine nature expected to be provided by th....
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....as been placed on the decision of the Mumbai Tribunal in the case of Preimus Investment & Finance Ltd. vs. DCIT, 171 TTJ 794(Mum-ITAT) to say that expenditure incurred for maintaining status namely, miscellaneous expenses, salary, legal expenses, travel expenses etc. would be an allowable expenditure. 9. On the other hand, Ld. Departmental Representative has pointed out that the Assessing Officer disallowed the expenditure by noticing that the expenses debited in the P&L Account were relatable to earning of rental income from house property and further in the absence of any business activity, the impugned expenditure would not be allowed. 10. We have carefully considered the rival submissions. At pages 58 - 64 of the Paper Book, copies of....