2018 (12) TMI 314

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....before us the following grounds of appeal: "1. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in allowing municipal taxes against "Income from Other Sources" u/s 57(iii) instead of "Income from house Property" ignoring that the municipal taxes are paid in respect of the house property and thus are directly related to the House property on which income is earned. 2. On the facts and in the circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in ignoring that the municipal taxes are to be deducted from "Income from House Property" u/s 23 and not from "Income from Other Sources" and have not covered u/s. 57(iii) of the Inco....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....that "Clause No. 4" of the amenities agreement clearly stated that the amount was to be received by the assessee for carrying out maintenance, major repairs and payment of municipal tax. The A.O observed that the assessee had shown the entire rental income and receipts towards amenities charges under the head "income from house property", and after deducting from the same viz. (i) property tax of Rs. 1,98,57,822/-; (ii). 30% of net rental income amounting to Rs. 2,85,24,719/-; and (iii). interest expenditure of Rs. 92,46,443/-, had shown the balance rental income of Rs. 5,73,11,234/- as its income under the head "income from house property". 4. The A.O being of the view that as the aforesaid incomes viz. (i) rental income from the property....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

.... the liability for payment of municipal taxes was under taken by the assessee as per the amenities agreement, therefore, it was under Sec. 57(iii) entitled for deduction of the municipal taxes against the receipts as per the amenities agreement which were brought to tax under Sec. 56 of the Act. On the basis of the aforesaid deliberations the CIT(A) directed the A.O to compute the income of the assessee both under the head i.e "income from house property" and "income from other sources" for the year under consideration, in the same manner as was so directed by his predecessor in the assesses own case for A.Y 2009-10. 6. The revenue being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The revenue has assa....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....oron Finance & Investment Ltd. [ITA No. 4583/Mum/2014; dated 20.01.2016](Copy placed on record). It was submitted by the ld. A.R that in the aforesaid orders the Tribunal had concluded that as payment of municipal taxes is directly related to the letting out of the property, the rental income from which is taxed under the head "income from house property", therefore, the same cannot be said to have been expended for the purpose of earning of amenities charges. The ld. A.R submitted that on the basis of the aforesaid deliberations the Tribunal had concluded that the CIT(A) had erred in allowing deduction of the municipal taxes under Sec. 57 (iii) against the income of the assessee from amenities charges. The ld. Departmental Representative (....