TaxTMI 
TaxTMI 
1984 (12) TMI 29
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....ce charges for the supply of electricity, use of lifts, supply of water, maintenance of staircases and for the watch and ward facilities for the tenants. Before the Income-tax Officer, the claim of the assessee was that the service charges received by the assessee should be treated as business income. However, the Income-tax Officer did not accept the claim of the assessee and treated the service charges as income from property. The assessee also claimed depreciation on the fans installed in the property situated at 40, Strand Road. Since the income from the said property was assessable under section 22 of the Income-tax Act, 1961, the Income-tax Officer disallowed the claim of the assessee as regards depreciation on fans. The assesse....
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....in providing electricity, use of lifts, supply of water, maintenance of stair cases and watch and ward facilities to the tenants constituted separate activities distinct from the letting out of the property and were not incidental to such letting out ? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the service charges realised were not part and parcel of the income derived from house property assessable under section 22 of the Income-tax Act, 1961, and that they were assessable under the head of 'Income from other sources' ? 3. Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that depreciation on fans fitted to portions of the build....
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....s by way of service charges were also being charged. It is not in dispute that the service rendered and charged by the assessee consisted of supply of electricity, providing electric lifts, the maintenance of staircases and lighting of common passages, corridors and staircases and providing watch and ward facilities. The contention of the Revenue is that the income from service charges falls within the specific head being income from house property. Even if the service charges may indirectly be covered by another head, such income cannot be taxed under the head " Other sources ". The primary source is the house property income and service charges are incidental to the income from house property. The contention of the Revenue, however, canno....
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....bunal found that the service charges realised constituted a separate item of receipt. The rent and service charges have been separately shown and accounted for as consideration for different things. The Tribunal in coming to its conclusion that the charges received for amenities furnished by the landlord to the tenants were assessable to income-tax as income from other sources and not as income from house property relied on the case of Karnani Properties [1971] 82 ITR 547 (SC) and the observation of Lord Macmillan in the case of Salisbury House Estate Limited v. Fry [1930] 15TC 266 (HL). This court in the case of Kanak Investments [1974] 95 ITR 419 (Cal), took the view that even where a composite rent is received, the amount attributable to....