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2017 (8) TMI 752
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.... 2. At the outset, it requires to be noticed that there is some confusion about the date of the impugned order of the ITAT qua the issue that has been raised in the present appeal of the Revenue. The issue raised concerns the treatment to be accorded to the maintenance charges and ground rent received by the Respondent-Assessee from allottees of plots that have been entrusted to it for development. According to the Revenue, both the ground rent and maintenance charges ought to be treated as the income of the Assessee whereas according to the Assessee they do not form part of its income. 3. The date given by the Revenue for the impugned order of the ITAT is 19th December 2014. A perusal of the said order reveals that it deals with only on....
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.... 11th February 2014 the opening paragraph of which reads as under: "Despite best persuasion of myself, I have not been able to concur with the findings or conclusion as drawn by Ld. Accountant Member on the issue of interest received on income tax refund to the extent of Rs. 36.94 lacs whereas, on all other points in the appeal, I fully agree, therefore, my reasons for not being agreeable on the said issue are as under:" (emphasis supplied) 5. From the above paragraph it is clear that Mr. Bedi, on 11th February 2014, agreed with Mr. Mehrotra on the issue with which the present appeal is concerned, i.e. the issue of ground rent and maintenance charges. Therefore, as far as this issue is concerned, it must be taken that the ITAT formed ....
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....l as the ground rent collected by the Assessee as not forming part of its income and thereby deleting the addition made by the AO on that account? 10. The background facts are that the Respondent-Assessee is awarded projects by Delhi Government for relocation of industries, common effluent treatment plants and development works of the Narela Industrial Complex Scheme. The Assessee borrows loans and advances from the Government of India and other sources for carrying on the projects. The Assessee's case is that the interest earned on the amounts borrowed by it is credited to the respective funds/schemes and not to the Profit and Loss (P&L) account of the Assessee. 11. There is what is called the Narela Revolving Fund. The interest on t....
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....the ITAT in the Assessee's own case for the earlier AYs where the amounts received towards maintenance charges were directed to be deleted. It was observed that the said amount had been "received in trust for a specific performance and, therefore, should not be treated as an income in the hands of the Assessee". Although the said observation pertained only to the maintenance charges, the CIT (A) directed the deletion of the entire sum which represented both the maintenance charges as well as the ground rent. 15. Aggrieved by the above order, the Revenue went in appeal before the ITAT. In the impugned order of the ITAT pertaining to this issue, the ITAT followed its order for the earlier AY and sustained the deletion ordered by the CIT (A....
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....o not become funds kept or held in trust. The assessee's books would of course reflect the actual expenditure incurred which would naturally be permitted to be claimed as expenses. We also notice that the assessee had agreed as follows by its letter dated 29.10.2009: "The observation pertains to low cost housing scheme. The ground rent is not a part of the Income of the Corporation. However the maintenance charges received will be shown as income of the Corporation during the current financial year." 18. Consequently, for AY 2007-08, this Court accepted the plea of the Revenue that maintenance charges collected by the Assessee has to be treated as part of its income. 19. For some reason, the above decision was not challenged fu....
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....evenue, on the other hand, contends that the depiction of the said amount in the accounts of the Assessee may not be conclusive of the nature of the receipt for the purposes of the income tax. According to him, the ground rent in its essential characteristic, having been collected from the allottees of the plots, can be no different from maintenance charges collected from the allottees. 23. The Court finds that this issue was not examined in depth with reference to the accounts of the Assessee either by the AO or the CIT (A) or even the ITAT. They appear to have treated both the maintenance charges and ground rent alike whereas the decisions of the ITAT in favour of the Assessee, even for the earlier AYs, were specific to the issue of ma....