TaxTMI 
TaxTMI 
2020 (4) TMI 582
X X X X Extracts X X X X
X X X X Extracts X X X X
....se appeals are clubbed, heard and disposed of by this consolidated order. Firstly, we are taking ITA No. 6678/Mum/2017 for AY 2012-13 filed by the assessee. 3. The brief facts of the case are that assessee is engaged in the business of development and construction of immovable properties, dealing in land and acting as agent. The assessee has e-filed return of income on 22.09.2012 declaring total income of Rs. 1,12,15,700/-, the same was processed u/s 143(1) of the Act. The case was selected for scrutiny, the A.O issued a notice u/s 143(2) of the Act on 29.08.2013. Thereafter, the assessee filed revised return of income on 27.03.2014 declaring the income of Rs. 41,98,500/-. During the assessment proceedings u/s 143(3) of the Act, the A.O no....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s NIL. 4. Aggrieved by the order of the A.O, the assessee filed appeal before the Ld. CIT(A). The Ld. CIT(A) confirmed the order of the A.O. Aggrieved by the order of the Ld. CIT(A), the assessee is in appeal before us by raising the following grounds of appeal:- "1. On the facts and circumstances of the case and in law, the Ld. CIT(A) ought to have directed to the Ld. A.O as under:- (a) Recovery made towards common area maintenance charges of Rs. 1,74,70,284/- should be assessed to tax under the head income from other sources and not under the head income from house property. (b) Consequently, the Ld. A.O should grant deduction of expenses and depreciation allowance to the extent of Rs. 1,30,96,889/- and (c) Accordingly, the income ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and the maintenance charges which was claimed from the lessee in a separate invoices declared as income from other sources. He brought to our notice copies of invoices which is part of the paper book in page no. 35 to 37 of the paper book, in which assessee has charged the rental income separately and he brought to our notice at page no. 38 of the paper book in which copy of the invoices which is details of maintenance charges charged to the tenants for the usage of common area and other maintenance expenses. He further submitted that all these years, assessee was declaring total income under the head income from house property. However, the law of claiming and declaring the income under the head income from house property and income from ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the income earned by the assessee and the balance expenditure should be allowed to carry forward and set off from the following assessment year's income and if there is any expenditure which is unabsorbed in the earlier assessment year should be allowed to set off in the current assessment year. For that proposition, he relied upon the case of Star Gold Pvt. Ltd. (supra). 7. With regard to disallowance u/s 14A, he submitted that assessee has not earned any exempt income during this year, therefore AO cannot invoke the provision of section 14A and on this proposition, he submitted various case laws. 8. On the other hand, Ld DR submitted that the maintenance charges are part of lease agreement and this source of income cannot be separated f....
X X X X Extracts X X X X
X X X X Extracts X X X X
....idered view that the intention of assessee to give the shopping mall multiplex under leave and license to earn rental income is first place and offer the other facilities as a facility to the lessee /users. The purpose of providing separate maintenance to the lessee are not to earn any profit and may be to maintain the property in a good condition and give the licensee added convenience for the usage of the property. What is relevant in determining whether the maintenance charges collected are part and parcel of the rental income and is the actual expenditure deductible against such receipts and whether it is relevant to the maintenance charges claimed by the assessee. If the proportion of the expenditure are in conformity with the maintena....
X X X X Extracts X X X X
X X X X Extracts X X X X
....omplete the assessment as per law. 11. With regard to ground no. 3 in respect of 14A disallowance, we notice from the records that assessee has no dividend income, therefore when there is no exempt income, AO cannot invoke the disallowance u/s 14A of the Act. In this respect, we draw strength from the decision of Hon'ble Delhi High Court in the case of Cheminvest Ltd. Vrs. CIT (supra) and similarly in the case of PCIT vrs. Ballarpur Industries Ltd. (ITA No. 51 of 2016), wherein it was held as under:- On hearing the learned Counsel for the Department and on a perusal of the impugned orders, it appears that both the Authorities have recorded a clear finding of fact that there was no exempt income earned by the assessee. While holding so, t....