SULAKSHANA SECURITIES LTD, MUMBAI V. DCIT 1(3), MUMBAI

ITA 2948/MUM/2013

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 100560 (ITAT-MUMBAI)
• Duration Of Justice: 2 year(s) 3 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 07-08-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 28-07-2015
• Assessment Year: 2008-2009
• Appeal Filed On: 17-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: S S RANA D R

Judgement Text

E IN THE INCOME TAX APPELLATE TRIBUNAL E BENCH, MUMBAI BEFORE SHRI A.D. JAIN, JM AND SHRI RAJENDRA, AM .. , , ./ I.T.A. NO. 2948/ MUM/2013 ( / ASSESSMENT YEAR : 2008-09 SULAKSHANA SECURITIES LIMITED, MAFATLAL HOUSE, H.T. PAREKH MARG, BACKBAY RECLAMATION, MUMBAI 400 020. / VS. DY. COMMISSIONER OF INCOME TAX 1(3), AAYAKAR BHAVAN, M.K. ROAD, MUMBAI 400 020. ./ PAN : AABCS1783L ( / APPELLANT ) .. ( ! / RESPONDENT ) A PPELLANT BY SHRI GIRISH DAVE R E SPONDENT BY : SHRI S.S. RANA, D.R. ' # $ % & ' / DATE OF HEARING : 28-07-2015 ()*+ % & ' / DATE OF PRONOUNCEMENT : 07-08-2015 [ 3 / O R D E R PER A.D. JAIN, J.M . : .. , IN THIS ASSESSEES APPEAL FOR A.Y. 2008-09, THE FOL LOWING GROUNDS HAVE BEEN TAKEN:- 1. THE LEARNED COMMISSIONER (APPEALS) ERRED IN RES TRICTING THE DEDUCTION OF MAINTENANCE EXPENSES ONLY TO ELECTRICI TY EXPENSES FROM THE TOTAL MAINTENANCE EXPENSES OF RS. 8,89,355, WHI LE COMPUTING INCOME UNDER THE HEAD 'INCOME FROM OTHER SOURCES' 2. THE LEARNED COMMISSIONER (APPEALS) ERRED IN HOLD ING THE CLAIM OF MAINTENANCE EXPENSES AS EXCESSIVE AND UNREASONAB LE AND CONCLUDING THAT ONLY ELECTRICITY EXPENSES OUGHT TO BE ALLOWED. ITA 2948/M/13 2 3. THE LEARNED COMMISSIONER (APPEALS) OUGHT TO HAVE APPRECIATED THAT THE MAINTENANCE EXPENSES OF RS. 8,89,355 WERE INCURRED WHOLLY AND EXCLUSIVELY 'FOR THE PURPOSE OF EARNING INCOME FROM'AIR- CONDITIONING AND OTHER CHARGES RECEIVED AND THE SAM E OUGHT TO BE ALLOWED AS DEDUCTION. 2. THE ASSESSEE COMPANY IS ENGAGED IN LETTING OUT O F PREMISES. FOR THE YEAR UNDER CONSIDERATION, AIR CONDITIONING AND OTHE R CHARGES OF RS. 13,47,524/- WERE CONSIDERED BY THE A.O. AS PART OF THE ASSESSEES HOUSE PROPERTY INCOME, WHEREAS THE ASSESSEE HAD CLAIMED T HESE CHARGES TO BE INCOME FROM OTHER SOURCES. PROPERTY MAINTENANCE E XPENSES OF RS. 8,89,355/- WERE DISALLOWED. THE LD. CIT(A), FOLLOW ING THE FIRST APPELLATE ORDER IN ASSESSEES OWN CASE FOR A.Y. 2006-07, DIRECTED T O ALLOW ONLY ELECTRICITY EXPENSES FOR RUNNING OF AIR CONDITIONERS. 3. THE LD. COUNSEL FOR THE ASSESSEE HAS CONTENDED T HAT THE LD. CIT(A), WHILE COMPUTING THE ASSESSEES INCOME FROM OTHER SO URCES, ERRED IN RESTRICTING THE DEDUCTION OF MAINTENANCE EXPENSES O NLY TO ELECTRICITY EXPENSES. IT HAS BEEN CONTENDED THAT THE TRIBUNAL HAS DECIDED THIS ISSUE IN FAVOUR OF THE ASSESSEE FOR ASSESSMENT YEARS 2003-04 , 2006-07, 2007-08 AND 2009-10. COPIES OF THE SAID ORDERS OF THE TRIBUNAL HAVE BEEN PLACED ON RECORD. 4. THE LD. D.R., ON THE OTHER HAND, HAS RELIED ON T HE IMPUGNED ORDER. 5. THE TRIBUNAL, VIDE ORDER DATED 6-6-2013, PASSED IN ITA NO. 2028/MUM/2007, FOR A.Y. 2003-04 IN THIS REGARD, HAS HELD AS FOLLOWS:- 5. WE HAVE PERUSED THE RECORDS AND CONSIDERED THE RIVAL CONTENTIONS CAREFULLY. THE DISPUTE RAISED IS REGARDING ASSESSME NT OF INCOME FROM PROVIDING AIR CONDITIONING SERVICES AS WELL AS WATE R AND ELECTRICITY SERVICES BY THE ASSESSEE TO THE TENANTS OF MAFATLAL CENTRE. THE SAID CHARGES HAD BEEN RECEIVED BY THE ASSESSEE IN ADDITI ON TO RENTAL VALUE OF LETTING OUT THE SAID MAFATLAL CENTRE. THE RENTAL IN COME HAS ALREADY BEEN ASSESSED BY AO AS INCOME FROM HOUSE PROPERTY. IN AD DITION THE AO HAS ASSESSED THE OTHER CHARGES AS INCOME FROM HOUSE PRO PERTY. CIT (A) HAS ITA 2948/M/13 3 CONFIRMED THE ORDER OF AO. IN OUR VIEW THE ORDER OF CIT (A) CANNOT BE UPHELD. THE INCOME TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY IS REQUIRED TO BE CHARGED ON THE BONAFIDE ANNUAL LE TTING VALUE OF LAND AND BUILDING. IN CASE THE LAND LORD IN ADDITION TO LETTING OUT THE BUILDING HAS ALSO PROVIDED SOME SERVICES, THE INCOM E FROM SUCH SERVICES HAS TO BE ASSESSED AS INCOME FROM BUSINESS OR INCOME FROM OTHER SOURCES DEPENDING UPON THE NATURE OF SERVICES RENDERED. THIS VIEW HAS BEEN UPHELD BY THE HONBLE HIGH COURT OF K OLKATA IN CASE OF KANAK INVESTMENT PVT. LTD. (95 ITR 419). IN THE SAI D CASE HONBLE HIGH COURT OF KOLKATA HELD THAT IN CASE THERE WAS COMPOS ITE RENT CHARGED FOR LETTING OUT THE PROPERTY AS WELL AS THE SERVICES RE NDERED, IT HAS TO BE SPLIT UP AND THE AMOUNT WHICH IS ATTRIBUTABLE TO TH E PROPERTY SHOULD BE ASSESSED AS INCOME FROM HOUSE PROPERTY AND THE AMOU NT RELATABLE TO THE RENDERING OF SERVICES SHOULD BE ASSESSED AS INC OME FROM OTHER SOURCES. IN THE RESULT, APPEAL OF THE ASSESSEE IS PARTLY ALL OWED. 6. THE LD. CIT(A) HAS FOLLOWED THE FIRST APPELLATE ORD ER FOR A.Y. 2006-07. FOR THAT YEAR, VIDE ORDER DATED 11-4-2014, IN ITA N O. 7271/MUM2011, FOLLOWING THE TRIBUNAL ORDER FOR ASSESSMENT YEARS 2 003-04 (SUPRA) & 2007- 08, (THE TRIBUNAL FOLLOWED ITS ORDER FOR A.Y. 2003- 04 IN 2007-08), THE ISSUE WAS SET ASIDE TO THE FILE OF THE A.O., FOR ALLOWING THE EXPENDITURE AFTER EXAMINING THE SAME UNDER THE PROVISIONS OF SECTION 57 OF THE I.T. ACT. A SIMILAR COURSE WAS FOLLOWED BY THE TRIBUNAL FOR A.Y . 2009-10, VIDE ITS ORDER DATED 27-5-2015, IN ITA NO. 6427/MUM/2013. 7. THUS, FOLLOWING THE CONSISTENT VIEW TAKEN BY THE TRIBUNAL, FOR THE YEAR UNDER CONSIDERATION ALSO, THE ISSUE IS REMITTED TO THE FILE OF THE A.O., FOR CONSIDERING THE EXPENSES AS SHOWN BY THE ASSESSEE A ND TO EXAMINE THE DEDUCTIBILITY THEREOF UNDER THE PROVISIONS OF SECTI ON 57 OF THE ACT AND TO ALLOW THE EXPENDITURE ACCORDINGLY. ITA 2948/M/13 4 8. IN THE RESULT, FOR STATISTICAL PURPOSES, THE APP EAL OF THE ASSESSEE IS TREATED AS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 7 TH AUGUST, 2015. 3 % ()*+ ' 45 6 7 07-08-2015 ) % 8$ SD/- SD/- (RAJENDRA) (A.D. JAIN ) ACCOUNTANT MEMBER /J UDICIAL MEMBER 4 ' D$ MUMBAI ; 6 DATED 07-08-2015 [ #.../ R.K. R.K. R.K. R.K. , SR. PS ! ' #$%& ' &$ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. ! / THE RESPONDENT. 3. ' E& () / THE CIT(A)- 2, MUMBAI 4. ' E& / CIT- 1 MUMBAI 5. H#I 8 &JK , ' JK+ , 4 ' D$ / DR, ITAT, MUMBAI E BENCH 6. 8 L M $ / GUARD FILE. ! ( / BY ORDER, ! H& & //TRUE COPY// )/(* + ( DY./ASSTT. REGISTRAR) , 4 ' D$ / ITAT, MUMBAI