TaxTMI 
TaxTMI 
TaxTMI 
2018 (5) TMI 347
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....about deleting the addition made by the AO under the head rent received from leave and licence fees and maintenance charges. During assessment proceedings, the AO observed that the assessee had let out a building, that it had charged licence fees of Rs. 43. 27 lakhs and maintenance charges of Rs. 1. 10 crore from seven of its tenants, that four of the tenants were closely held group companies, that the group companies entered had sublet its properties at much higher rents to certain third parties, that the rental income received by the sister concerns was Rs. 7. 18 crore. He directed the assessee to explain as to why rent received/receivable by the group companies should not be considered its income from house property and charged to tax ac....
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....mpanies, that there was no parity whatsoever in the shareholding pattern, that the income from house property both in the hands of the assessee as well as the tenant - companies had been split into rental income and maintenance charges, that expenditure against rental income could only be allowed after standard deduction as per the provisions of section 24 of the Act, that maintenance expenses had to be debited against the maintenance income of the assessee as well as the tenant-companies, that the AO had clubbed the maintenance charges and the rental income /sublease income is rental income in the hands of the assessee without granting any maintenance expenses, that the AO had lost sight of the fact that tenant-companies were not the owner....
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.... We have heard the rival submissions and perused the material before us. We find that the assessee had rented out it its property to seven tenants including four of its group concerns, that the AO was of the opinion that by using a colourable device the assessee group had returned lesser income, that the AO clubbed the incomes received by the tenant-companies with the income of the assessee and made an addition to the income of the assessee, that he relied upon the case of TIP Top Typography (supra) of the honorable division High Court, that the FAA took notice of the returns of income filed by the group concerns, that he held that the case relied upon by the AO actually supported the contention raised by the assessee. It is a fact assessee....
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....der of the FAA does not suffer from any legal or factual infirmity. Now we would like to refer to the case of TIP Top Typography(supra). In that matter the Hon'ble High Court has held as under: "Income from house property has to be "computed" by computing the annual value of the property. The annual value firstly to be the sum for which the property might reasonably be expected to be let from year to year. In the event, the property which consists of any buildings or lands appurtenant thereto, if the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), it is that amount so received or receivable which shall be deemed to be the annual value for the purposes of computing the ....
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....e to it or where there are no rents by reference to the assessments of comparable properties or to the profits carried from the property or to the cost of construction. Considering the difficulties faced in either retrieving immovable properties in metro cities and towns, and the time spent in litigation, it is expedient to execute leave and licence agreements. These are usually for fixed periods and renewable. In such cases as well, the conceded position is that the annual letting value will have to be determined on the same basis as noted above. In the event a security deposit collected and refundable interest-free and the monthly compensation shows a total mismatch or does not reflect the prevailing rate or the attempt is to deflate or i....