TaxTMI 
TaxTMI 
2023 (11) TMI 803
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....ting Rs. 28,14,21,827/- details as under:- "Returned loss (as declared) Rs.(23,57,18,238/-) Add: Addition: vide para No.l of Assessment order Rs. 9,67,62,246 Addition: vide para No.2 of Assessment order Rs. 3,20,07,310/- Addition: vide para No.3 of Assessment order Rs. 3,94,97,258/- Addition: vide para No.4.4(i) of Assessment order Rs. 7,22,62,040/- Addition: vide para No.4.4(j)) of Assessment order Rs 4,08,92,973/- Net Taxable Income Rs. 4,57,03,589/- 3. Aggrieved, the assessee filed appeal before CIT- (A), who allowed relief in respect of following additions / disallowances made by AO:- Addition: vide para No.l of Assessment order Rs. 9,67,62,246/- Addition: vide para No.2 of Assessment order Rs. 3,20,07,310/- Addition: vide para No.3 of Assessment order Rs. 3,94,97,258/- Addition: vide para No.4.4 of Assessment order Rs. 2,60,50,582/- 4. With regard to the addition at para 4.4 of the assessment order, direction was given by CIT(A) in his order to disallow depreciation on Lifts. The AO made disallowance of depreciation of Rs. 1,48,42,391/- on Lifts. However no opportunity was provided to assessee before giving appeal effect. Total....
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....rd. 9. Facts of the case are that the assessee has constructed Commercial Building at Plot No. 15, Udyog Vihar, Phase-IV, Gurgoan which is let out to various tenants which includes Foreign / MNC Companies like FIS / Fidelity / Deloitte / Cisco and BPTP etc., and earning rental income. Assessee is also providing Maintenance Services to various occupants of Property from which there is Revenue of Rs. 11,67,64,484/-, besides earning income from Car Parking, Interest income and earning income from Hire charges of Rs. 4,44,73160/- from hire of Furniture, fixtures, Computer, Plant & Machinery & other assets which is embedded under Rental Income in the Profit and Loss account. 10. There are two segments of Revenue one of Rental income out of letting out of Property at Plot No.15, Udyog Vihar, Phase-IV, Gurgaon including Hire Charges of assets given on hire and next of Maintenances charges out of maintenance services rendered. Assessee has not claimed any depreciation on Building let out which has been accepted by the Assessing Officer. 11. Working of depreciation claimed on fixed assets is at page 4 of Paper Book. The expenses related to Maintenance debited to Profit and Loss account a....
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....et out of property. The assessee submitted that they had claimed deduction of Rs. 9,49,81,650/- in respect of maintenance expenses against "Maintenance Income offered to Tax" of Rs. 11,67,64,484/- being the sum received from tenants on account of maintenance services provided. There were separate maintenance agreement with tenant for providing maintenance services and charging maintenance charges, copies of which were filed before AO and CIT(A). 15. The Revenue stated in the assessment order that maintenance services provided to tenants were related to the building given on rent by the assessee. It was further stated in para 4.4 at page 7 of assessment order that as per rent agreement furnished, the assessee was to provide various services part of maintenance services and these services were related to area given on rent and without these services, giving the said building on rent has no value. Further, it was stated in para 4(d) that lease agreement with tenants were mainly for the area given on rent and intention of assessee was to let out the said property and the maintenance charges received were subservient to the exploitation of property given on rent. Further, in para 4.4 (....
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....ssee. There was no nexus of these maintenances expenses incurred and claimed with earning of rental income. Copy of lease agreement and maintenance agreement entered with tenant are placed at page 1-295 of Paper Book Part - II. 19. It is a fact on record that in the AY 2013-14 no disallowance has been made on the same issue and the return income has been accepted. Further the assessment proceedings on similar facts for AY 2011- 12 and AY 2013-14 , AY 2014-15 are completed without making any addition / disallowance in respect of same assessee on same set of facts on this issue. Copies of assessment orders for the AY 2011-12 and 2013-14 to 2014-15 are placed at page no 53-63 of Paper Book which shows that no such disallowances and additions were made in case of same assessee on same facts in earlier as well as later years. Rule of consistency demand that the same should be allowed in the year under consideration as well as there is no change in the facts. Reliance is being placed on the decision rendered in the case of CIT vs. Excel Industries 358 ITR 295(SC). Wherein it was held that, once having accepted this position, the Assessing Officer cannot change his opinion in immediate n....
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....ead "Business" which has nothing to do with Rental Income. Depreciation on assets given on hire itself works out to Rs. 1,12,90,496/-. Further, no logic / reason is given by the Assessing Officer for disallowing depreciation on assets given on hire despite the fact that income from hire of assets was offered to tax under the head 'Business'. 25. For the same reasoning as in preceding para, depreciation to the extent of 23.92% was allowed on the basis of ratio which maintenance income of Rs. 11,81,39,484/- bears to total income of Rs. 49,38,13,516/-. As maintenance income was 23.92% of total income, 23.92% of total depreciation claimed of Rs. 5,37,49,964/- was allowed and balance Rs. 4,08,92,973/- was disallowed. 26. This action of the AO is erroneous as claim of depreciation was in respect of assets given on hire also and various assets like as lift, elevators, DG Sets for power back up, plant and machinery for air conditioning, temperature control and ventilation, Electric Control Panel, Chiller Plant, Plant & Machinery used for cleaning of building in respect of maintenances business. No part of depreciation on Building and fixed assets used in Building was claimed whic....
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.... have allowed standard deduction @ 30% of the hire charges and maintenance income treated as part of Rental income which is not done by AO. 28. The depreciation claimed of Rs. 5,37,49,964/- on fixed assets during the year under consideration as under:- Particulars Depreciation Remarks Computer 1,10,35,313/- Not the part of Building and this is not related to Rental Income. This is Part of Hiring Business Electrical Equipment 84,06,210/- Not the part of Building and this is not related to Rental Income. This is Part of Maintenance Business Furniture and Fitting 1,95,08,591/- Not the part of Building and this is not related to Rental Income. This is Part of Hiring Business Office Equipment 28,82,505/- Not the part of Building and this is not related to Rental Income. This is Part of Maintenance Income and Business of assets given on Hire Plant and Machinery 1,19,16,345/- Not the part of Building and this is not related to Rental Income. This is Part of Maintenance Income and part of Business of assets given on hire. Further, out of total depreciation claimed of Rs. 1,19,16,345/- in respect of Plant and Machinery, the 29. It is a fact on record that in the AY 2013-....