ADIT, New Delhi V. Mr. Vinod Arora, New Delhi

ITA 827/DEL/2012

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 65384 (ITAT-DELHI)
• Duration Of Justice: 6 month(s) 12 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-08-2012
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: H
• Next Hearing Date: 06-08-2012
• Assessment Year: 2008-2009
• Appeal Filed On: 17-02-2012
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PIRTHI LAL
• Assessee Lawyers: SUNIL GOEL SUHEL GOEL CAS
• Keywords: Double taxation relief

Judgement Text

ITA NO. 827/DEL/2012 1 IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH H, NEW DELHI BEFORE SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER AND SHRI C.M. GARG, JUDICIAL MEMBER I.T.A. NO. 827/DEL/2012 A.Y. : 2008-09 ADIT, CIR.1(1) (INT. TAXATION), 204, DRUM SHAPE BLDG., I.P. ESTATE, NEW DELHI 110 002 VS. MR. VINOD ARORA, B-27, MAYFAIR GARDEN, NEW DELHI 110 016 (PAN/GIR NO. : AACPA9466A) (APPELLANT ) (APPELLANT ) (APPELLANT ) (APPELLANT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) (RESPONDENT ) ASSESSEE BY : SH. SUNIL GOEL, SUHEL GOEL, CAS DEPARTMENT BY : SH. PIRTHI LAL, SR. D.R. ORDER ORDER ORDER ORDER PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM PER SHAMIM YAHYA: AM THIS APPEAL BY THE REVENUE IS DIRECTED AGAINST TH E ORDER OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS)-XXIX, NEW D ELHI DATED 14.10.2011 PERTAINING TO ASSESSMENT YEAR 2008-09. 2. THE GROUNDS RAISED READ AS UNDER:- I) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN HOLDING THAT THE INTEREST INCOME EARNED BY THE ASSESSEE AMOUNTING TO ` 2,64,172/- WAS TAXABLE AT THE RATE OF 12.5% UNDER THE INDIA UAE DTAA INSTEAD OF AT THE RATE OF 40% UNDER THE INCOME TAX ACT, FAILING TO ITA NO. 827/DEL/2012 2 APPRECIATE THAT NO TAX RESIDENCE CERTIFICATE HAS BEEN PRODUCED BY THE ASSESSEE. II) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN HOLDING THAT THE SHORT TERM CAPITAL GAINS AMOUNTING TO ` 84,66,054/- WERE NOT TAXABLE IN INDIA IN TERMS OF ARTICLE 13(3) OF THE INDIA UAE DTAA. FAILING TO APPRECIATE THAT THERE WAS NOT DOUBLE TAXABLE IN THE ASSESSEES CASE AS UAE HAS NOT TAX REGIME AND THE IMPUGNED SHORT TERM CAPITAL GAINS WOULD NOT BE TAXABLE IN UAE. III) ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE LD. COMMISSIONER OF INCOME TAX (A) HAS ERRED IN HOLDING THAT WHILE COMPUTING THE ANNUAL VALUE OF THE HOUSE PROPERTY, THE ASSESSEE IS ELIGIBLE TO CLAIM THE DEDUCTION OF ` 22,888/- ON ACCOUNT OF MAINTENANCE CHARGES PAID TO THE COOPERATIVE SOCIETY, FAILING TO APPRECIATE THAT THE ACT DOPES NOT PROVIDE FOR ANY FURTHER DEDUCTION ON ACCOUNT OF REPAIR AND MAINTENANCE, OVER AND ABOVE THE STANDARD 30% DEDUCTION PROVIDED U/S. 24 OF THE ACT. IV) THE APPELLANT CRAVES TO ADD, AMEND, MODIFY OR ALTER ANY GROUNDS OF APPEAL AT THE TIME OR BEFORE THE HEARING OF THE APPEAL. 3. APROPOS ISSUE OF INTEREST INCOME EARNED BY THE ASSESSEE AMOUNTING TO ` 2,64,172/-. ITA NO. 827/DEL/2012 3 THE ASSESSEE WAS RESIDENT OF DUBAI AND WAS HOLDING UAE RESIDENTS PERMIT/ VISA. THE ASSESSEE HAD EARNED INTEREST INCOME OF ` 2,64,172/- DURING THE YEAR UNDER APPEAL. ASSESSE E OFFERED THE INTEREST TO TAX @ 12.5% UNDER ARTICLE 11(2)(B) OF INDO-UAE DOUBLE TAXATION AVOIDANCE AGREEMENT (DTAA). HOWEVER, AS SESSING OFFICER RELIED UPON THE ASSESSMENT ORDER FOR THE ASSESSME NT YEAR 2007-08 AND HELD THAT THE ASSESSEE WAS NOT ELIGIBLE FOR THE BENEFIT OF DTAA AND TAXED THE INTEREST INCOME AT THE NORMAL RATE OF 40% UNDER THE INCOME TAX ACT, 1961. WHILE DISALLOWING THE CLAIM OF THE ASSESSEE THE ASSESSING OFFICER OBSERVED THAT THE ASSESSEE W AS NOT ABLE TO PRODUCE THE TAX RESIDENCY CERTIFICATE OF UAE AND THE DOCUMENTS FILED BY IT, I.E. THE COPY OF THE PASSPORT AND DRIVING LI CENSE, WERE NOT SUFFICIENT EVIDENCE TO ESTABLISH THAT THE ASSESSEE WAS A RESIDENT OF UAE. 4. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT THE SAME ISSUE WAS CONSIDERED BY THE LD. COMMISSIONER OF INCOME TAX (A) IN ASSESSEES OWN APPEALS FOR ASSESS MENT YEARS 2006- 07 & 2007-08 AND THE APPEALS WERE ALLOWED IN THIS REGARD. WHILE ALLOWING THE RELIEF TO THE ASSESSEE, THE LD. COMMISS IONER OF INCOME TAX (A) IN THIS REGARD REFERRED TO CIRCULAR NO. 734 DATED 24.1.1996 ISSUED BY THE CBDT, WHEREIN IT WAS CLARIFIED AS UND ER:- 2. THE BOARD IN ITS CIRCULAR NO. 728 (F.NO. 500/12/95-FTD) DATED 30.10.1995 HAVE ALREADY CLARIFIED THAT IN CASE OF A REMITTANCE TO A COUNTRY ITA NO. 827/DEL/2012 4 WITH WHICH A DOUBLE TAXATION AVOIDANCE AGREEMENT IS IN FORCE, TAX SHOULD BE DEDUCTED AT THE RATES PROVIDED IN THE FINANCE ACT OF THE RELEVANT YEAR OR AT THE RATES PROVIDED IN THE DTAA, WHICHEVER IS MORE BENEFICIAL TO THE ASSESSEE. 3. ONCE AGAIN IT IS CLARIFIED THAT IN RESPECT OF PAYMENTS TO BE MADE TO THE NON-RESIDENT INDIANS AT UAE, TAX AT SOURCE MUST BE DEDUCTED AT THE FOLLOWING RATES: II) INTEREST (B) 12-1/2% OF THE GROSS AMOUNT OF THE INTEREST IN ALL OTHER CASES. 5. CONSIDERING THE ABOVE, LD. COMMISSIONER OF INCOME TAX (A) HELD THAT WORDINGS OF THE CIRCULAR ARE CLEAR AND UNAMBIGU OUS. IN CASE OF NON-RESIDENT INDIANS AT UAE, TAX ON INTEREST INCOME IS REQUIRED TO BE DEDUCTED AT SOURCE AT THE RATE OF 12-1/2% OF THE GR OSS AMOUNT OF INTEREST. HENCE, LD. COMMISSIONER OF INCOME TAX ( A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE AND DIRECTED THE AS SESSING OFFICER TO TAX THE INTEREST INCOME OF THE ASSESSEE @ 12.5% I N TERMS OF ARTICLE 11(2)(B) OF THE INDO-UAE DTAA. 6. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEAL BEFORE US. 7. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT ASSESSEE IN THIS CASE IS A UAE RESIDENT. THE DTAA WITH THE UAE MAN DATES THAT INTEREST INCOME BE TAXED @ 12.5% UNDER ARTICLE 11(2 )(B) OF THE SAID ITA NO. 827/DEL/2012 5 DTAA. FURTHERMORE, BOARD CIRCULAR NO. 728 REFE RRED HEREINABOVE ALSO SUPPORTS THE CASE OF THE ASSESSEE. WE FURTHER FIND THAT LD. COMMISSIONER OF INCOME TAX (A) HAS NOTED THAT IN ASS ESSEES OWN CASE FOR ASSESSMENT YEAR 2006-07 AND 2007-08, THE APPEAL S WERE ALLOWED IN THIS REGARD. LD. DEPARTMENTAL REPRESENTATIVE COULD NOT CONTROVERT THESE SUBMISSIONS. UNDER THE CIRCUMSTANCES, WE UPHOL D THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) ON THIS ISSUE AND DECIDE THE ISSUE IN FAVOUR OF THE ASSESSEE. 8. APROPOS ISSUE OF SHORT TERM CAPITAL GAINS ON THIS ISSUE ASSESSING OFFICER DENIED THE BENEFI T OF INDO UAE DTAA TO THE ASSESSEE IN RESPECT OF SHORT TERM CAPITA L GAINS OF ` 84,55,054/- AND LEVIED TAX @ 10% ALONGWITH THE SURC HARGE AND EDUCATION CESS IN ACCORDANCE WITH THE PROVISIONS OF SECTION 111 A OF THE ACT. ASSESSEE CLAIMED THAT SINCE THE ASSESSEE WAS A TAX RESIDENT OF UAE, THE INCOME FROM SHORT TERM CAPITAL GAINS WAS NOT CHARGEABLE TO TAX IN ACCORDANCE WITH THE PROVISIONS OF ARTICLE 13 (3) OF THE INDO-UAE DTAA. WHILE REJECTING THE CLAIM OF THE ASSESSEE, A SSESSING OFFICER RELIED UPON THE ASSESSMENT ORDER FOR 2007-08 WHEREIN IT WAS HELD THAT THE BENEFIT OF INDO UAE TREATY WAS NOT AVAILABLE TO THE ASSESSEE AS IT WAS NOT LIABLE TO PAY TAX IN THE UAE ON ITS INCOME FROM SHORT TERM CAPITAL GAINS. 9. UPON ASSESSEES APPEAL LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT THE SAID ISSUE WAS CONSIDERED BY HIS PR EDECESSOR IN THE APPEAL FILED BY THE ASSESSEE FOR THE ASSESSMENT YEAR 2007-08. WHILE DECIDING THIS APPEAL HIS PREDECESSOR RELIED UPON H IS OWN ORDER DATED 30.3.2010 IN THE CASE OF MUSTAQ AHMED VAKIL IN APPE ALS NO. 269/06- 07, 104/07-08 AND 71/08-09 WHEREIN IT WAS HELD AS U NDER:- ITA NO. 827/DEL/2012 6 I HAVE CAREFULLY CONSIDERED THE POINTS MADE BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, SUBMISSIO NS OF THE APPELLANT AND THE VARIOUS DECISIONS RELIED UPON BY THE APPELLANT. THE ISSUE HAS BEEN DEALT WITH EXTENSIV ELY BY THE AAR IN ITS VARIOUS ORDERS. TWO AAR RULINGS ARE IN FAVOUR OF THE DEPARTMENT. IN THE CASE OF CYRIL EUGENE PEREIR A (239 ITR 650) IT WAS HELD THAT AS INDIVIDUALS DO NOT PAY TAX IN THE UAE, THE APPLICANT CYRIL PEREIRA WAS NOT A TAX RESI DENT OF THE UAE AND WAS NOT ENTITLED TO THE BENEFICIAL PROVISIO NS OF THE INDIA-UAE TAX TREATY. IN THE CASE OF ABDUL RAZAK MEMAM, (146 TAXMAN 115) THE AAR HELD THAT INVESTORS OF THE UAE HAVE TO PAY CAPITAL GAINS TAX ON THEIR INVESTMENTS I N INDIA. THE AAR WAS OF THE VIEW THAT DTAA BETWEEN INDIA AND THE UAE WAS NOT USEFUL FOR THE PURPOSE SINCE UAE DOES N OT HAVE A TAX REGIME. TWO OF THE AARS RULINGS I.E. IN THE CASE OF M.A. RA FIQUE AND EMIRATE FERTILIZERS TRADING ARE IN FAVOUR OF THE APP ELLANT. IN M.A. RAFIQUE (213 ITR 317), DATED 23.12.1994, THE A AR HELD THAT THE APPLICANT WAS ELIGIBLE TO THE BENEFIT S OF THE INDIA-UAE TAX TREATY AND THAT THE CAPITAL GAINS WOU LD NOT BE SUBJECT TO TAX IN INDIA. THE AAR OBSERVED THAT THOUGH THERE WAS NO INCOME TAX OR WEALTH TAX ON INDIVIDUALS IN ANY OF THE UAE NATIONS, THE FACT THAT A COMPREHENSIVE AGREEMENT (TAX TREATY) WAS CONSIDERED NECESSARY IN S PITE OF A CLEAR KNOWLEDGE THAT THERE WAS NO SUCH TAX ON IN DIVIDUALS IN UAE COULD ONLY MEAN THAT THE AGREEMENT WAS INTEND ED TO ENCOURAGE THE INFLOW OF FUNDS FROM DUBAI AND OTHER EMIRATES TO INDIA FOR INVESTMENT. IN THE CASE OF E MIRATES ITA NO. 827/DEL/2012 7 FERTILIZER TRADING (192 CTR (AAR) 590), DATED 27.10. 2004, AAR HAS HELD THAT MERELY BECAUSE THERE IS NO TAX IN CIDENCE IN THE OTHER COUNTRY, IT DOES NOT IMPLY THAT SUCH IN COME CAN BE TAXED IN INDIA AND THAT UNDER ARTICLE 13(3) OF T HE TREATY CAPITAL GAINS REALIZED BY A UAE RESIDENT WERE TAXA BLE ONLY IN THE UAE AND NOT IN INDIA. BASED ON THE PROVIS IONS OF THE INCOME TAX ACT, THE AAR HELD, THE TAX TREATY HAS A N OVERRIDING EFFECT OVER THE PROVISIONS OF THE I.T. A CT. THUS, THE CAPITAL GAINS ARISING TO THE UAE RESIDENT ON SA LE OF THE SHARES OF AN INDIAN COMPANY CANNOT BE TAXED IN INDIA . THE MUMBAI TRIBUNAL IN THE CASE OF GREEN EMIRATES SHIPPING AND TRAVELS (99 TTJ 988), DATED 30.11.2005 , AFTER CONSIDERING VARIOUS RULINGS OF THE AAR AND THE JUDG EMENT OF THE HONBLE SUPREME COURT IN AZADI BACHAO ANDOLAN HE LD THAT LIABLE TO TAX IN THE CONTRACTING STATE DOES NOT NECESSARILY IMPLY THAT THE PERSON SHOULD ACTUALLY BE LIABLE TO TAX IN THAT CONTRACTING STATE BY VIRTUE OF AN EX ISTING LEGAL PROVISION BUT WOULD ALSO COVER THE CASES WHERE THE OTHER CONTRACTING STATE HAS THE RIGHT TO TAX SUCH PERSONS , WHETHER OR NOT SUCH A RIGHT IS EXERCISED. THE SAME TRIBUN AL IN THE CASE OF MEERA BHATIA (2010-TIOL-46-ITAT-MUM) DATED 29.10.2009 AFTER RELYING ON THE GREEN EMIRATES SHIPP ING CASE HELD THAT IT MAY RESULT IN DOUBLE NON-TAXATION BUT THEN WE CANNOT BE OBLIVIOUS TO THE FACT THAT DOUBL E NON TAXATION IS ALSO A FACT OF LIFE, AND TAX SPARINGS, WHICH FIND PLACE IN SEVERAL INDIAN TAX TREATIES, ARE ALSO A RE ALITY IN INTERNATIONAL TAXATION. ITA NO. 827/DEL/2012 8 KEEPING IN VIEW THE ABOVE MENTIONED DECISIONS, IT I S HELD THAT THE BENEFIT OF THE INDO-UAE TAX TREATY IS AVA ILABLE TO THE APPELLANT AND ARTICLE 13(3) OF THE INDO-UAE TRE ATY IS APPLICABLE IN ITS CASE. THIS VIEW GETS FURTHER SUPPORT FROM NOTIFICATION NO. 282/2007-08 FTD (F.NO. 503/5/200 4-FTD) DATED 28.11.2007 WHEREBY THE TREATY BETWEEN INDIA AND UAE WAS AMENDED AND CAPITAL GAINS ON TRANSFER OF SH ARES WERE MADE TAXABLE IN INDIA W.E.F 1.4.2008 WHICH MEANS THAT THE SAME WERE NOT TAXABLE BEFORE 1.4.2008. 10. LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT THE ORDER OF HIS PREDECESSOR IN MUSTAQ AHMED VAKIL HAS BEEN UPHELD BY THE ITAT, DELHI VIDE ORDER DATED 24.9.2010 IN I.T.A. NOS. 3424 , 3425, 3426/DEL/2010 BY HOLDING AS UNDER:- THE LD. COMMISSIONER OF INCOME TAX (A) HAS ALSO FOLLO WED THE ORDER OF THE TRIBUNAL IN THE CASE OF GREEN EMIRA TE SHIPPING & TRAVELS REFERRED TO ABOVE. RESPECTFULL Y FOLLOWING THE ORDER OF THE TRIBUNAL IN THE CASE OF RAMESH KUMAR GOENKA, WE DO NOT FIND ANY REASON TO INTERFER E IN THE ORDER OF LD. COMMISSIONER OF INCOME TAX (A). ALL THE THREE APPEALS FILED BY THE REVENUE ARE DISMISSED. 11. CONSIDERING THE ABOVE, LD. COMMISSIONER OF INCOME TAX (A) NOTED THAT IT IS NOT IN DISPUTE THAT THE FACTS OF T HE CASE ARE SQUARELY COVERED BY THE RATIO OF DECISION OF ITAT IN THE CAS E OF MUSTAQ AHMED VAKIL. LD. COMMISSIONER OF INCOME TAX (A) FURTHER NOTED THAT THE PROVISIONS OF AMENDED TREATY ARE APPLICABLE IN RESP ECT OF INCOME ARISING ON OR AFTER 1.4.2008. THEREFORE, LD. COM MISSIONER OF INCOME TAX (A) CONSIDERED THE PRECEDENT AND HELD THAT BEN EFIT OF INDO UAE ITA NO. 827/DEL/2012 9 TREATY IS AVAILABLE TO THE ASSESSEE AND SHORT TER M CAPITAL GAINS DERIVED BY HIM FOR SHARES/SECURITIES IN INDIA WERE NOT TAXABLE IN INDIA IN TERMS OF ARTICLE 13(3) OF THE INDO-UAE TAX TREATY . ACCORDINGLY, LD. COMMISSIONER OF INCOME TAX (A) DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. 12. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 13. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT T HE IDENTICAL FACTS WERE CONSIDERED BY THE ITAT IN THE CASE OF MUSTAQ A HMED VAKIL CITED ABOVE. THE TRIBUNAL DECIDED THE ISSUE IN FAVOUR OF THE ASSESSEE. THESE FACTS WERE NOT CONTROVERTED BY THE LD. DEPART MENTAL REPRESENTATIVE. HENCE, WE FIND THAT THERE IS NO IN FIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A). ACCORDIN GLY, WE HOLD THAT THE BENEFIT OF INDO-UAE TREATY IS AVAILABLE WITH TH E ASSESSEE AND SHORT TERM CAPITAL GAINS DERIVED BY HIM FROM SALE OF SHAR ES/ SECURITIES IN INDIA WERE NOT TAXABLE IN INDIA TERMS OF ARTICLE 13( 3) OF THE INDO-UAE TAX TREATY. 14. APROPOS ISSUE OF CLAIM OF DEDUCTION OF ` 22,888/ - ON THIS ISSUE THE ASSESSEE CLAIMED DEDUCTION OF ` 22,888/- PAID TO THE COOPERATIVE SOCIETY WHILE COMPUTING THE ANNUA L LETTING VALUE (ALV) OF THE PROPERTY U/S. 23 OF THE ACT. ASSESSI NG OFFICER REJECTED THE CLAIM OF THE ASSESSEE ON THE GROUND THAT DEEMED D EDUCTION OF 30% OF THE NET ANNUAL VALUE U/S. 24 OF THE ACT SUBS UMES THE REPAIR AND MAINTENANCE EXPENSES OF ALL KIND AND NO FURTHER DEDU CTION WAS TO BE ALLOWED WHILE COMPUTING ALV OF THE RESIDENTIAL HOUS E. ITA NO. 827/DEL/2012 10 15. BEFORE THE LD. COMMISSIONER OF INCOME TAX (A) AS SESSEE SUBMITTED THAT THE IMPUGNED CHARGES WERE PAID BY IT TOWARDS COMMON MAINTENANCE OF THE BUILDING INCLUDING PROVISION OF L IFT, CLEANING OF COMMON AREAS ETC. PROVIDED BY THE SOCIETY TO THE OC CUPANTS OF THE FLATS. IT WAS FURTHER SUBMITTED THAT UNDER CLAUS E 3 OF THE AGREEMENT ENTERED INTO BY THE ASSESSEE WITH THE TENANT, THE R ENT PAID BY THE TENANT INCLUDED CHARGES PAID TO THE SOCIETY UTILIT IES, SERVICES ETC. BY THE ASSESSEE ON BEHALF OF THE TENANT FOR AVAILING S UCH FACILITIES. ASSESSEE CONTENDED THAT WHILE COMPUTING THE RENT RE CEIVED BY IT FROM THE TENANT, THE AMOUNT OF ` 22,888/- SHOULD HAVE BEE N EXCLUDED FROM THE GROSS AMOUNT OF THE RENT RECEIVED BY THE ASSESS EE SINCE IT WAS ONLY REIMBURSEMENT OF THE UTILITY CHARGES PAID BY TH E ASSESSEE TO THE SOCIETY ON BEHALF OF THE TENANT FOR THE SERVICES EN JOYED BY THE TENANT. ASSESSEE FURTHER RELIED UPON THE CATENA OF CASE LAW S. 15.1 CONSIDERING THE ABOVE, LD. COMMISSIONER OF INCO ME TAX (A) HELD THAT HE AGREED WITH THE ASSESSEE THAT AMOUNT OF S ERVICE CHARGES RECEIVED BY THE ASSESSEE FROM THE TENANT SHOULD BE NETTED, I.E. THE RENT RECEIVED BY THE ASSESSEE FROM THE TENANT SHOULD BE ARRIVED AT AFTER REDUCING THE AMOUNT OF ` 22,888/-, BEING THE R EIMBURSEMENT OF SERVICE CHARGES PAID TO THE SOCIETY BY THE ASSESSEE ON BEHALF OF THE TENANT FOR THE SERVICES SUCH AS PROVISION OF LIFT, CLEANING OF COMMONS AREAS ETC., ENJOYED BY THE TENANT. LD. COMMISSIONER OF INCOME TAX (A) FURTHER OBSERVED THAT THE IDENTICAL ISSUE WAS CONSIDERED BY HIS ITA NO. 827/DEL/2012 11 PREDECESSOR IN ASSESSEES OWN APPEAL IN ASSESSMENT YEAR 2007-08 AND THE ISSUE WAS DECIDED IN FAVOUR OF THE ASSESSEE AND IT WAS HELD THAT SERVICES CHARGES WERE NOT REQUIRED TO BE REDUCED FR OM THE GROSS RECEIPT RECEIVED BY THE ASSESSEE ARRIVING AT THE AL V. CONSIDERING THE ABOVE LD. COMMISSIONER OF INCOME TAX (A) HELD THAT TH E ASSESSING OFFICER IS DIRECTED TO ALLOW THE DEDUCTION OF ` 22 ,888/- WHILE COMPUTING THE NETTED ALV OF THE HOUSE. 16. AGAINST THE ABOVE ORDER THE REVENUE IS IN APPEA L BEFORE US. 17. WE HAVE HEARD THE RIVAL CONTENTIONS IN LIGHT OF THE MATERIAL PRODUCED AND PRECEDENT RELIED UPON. WE FIND THAT ASSESSEE HAS CLAIMED A SUM OF ` 22,888/- WAS PAID BY IT TOWARDS COMMON MAINTENANCE OF THE BUILDING INCLUDING THE PROVISION OF LIFT, CLEANING OF COMMON AREAS ETC. PROVIDED BY THE ASSESSEE TO THE OC CUPANTS OF THE FLAT. THUS, IT IS THE ASSESSEES ARGUMENT THAT WHI LE DETERMINING THE RENT RECEIPT BY IT FROM THE TENANT, THE AMOUNT OF ` 22,888/- SHOULD HAVE BEEN EXCLUDED FROM THE GROSS AMOUNT OF THE RENT RECEIVED BY THE ASSESSEE SINCE IT WAS ONLY REIMBURSEMENT OF THE UTIL ITY CHARGES PAID BY THE ASSESSEE TO THE SOCIETY ON BEHALF OF THE TENANT FOR THE SERVICES ENJOYED BY THE TENANT. IN OUR CONSIDERED OPINION , THE VIEW ADOPTED BY THE LD. COMMISSIONER OF INCOME TAX (A) IS COGENT O NE. WE FURTHER NOTE THAT LD. COMMISSIONER OF INCOME TAX (A) HAS NOTE D THAT ASSESSEES OWN CASE FOR A.Y. 2007-08, THE SAID ISSU E WAS DECIDED IN FAVOUR OF THE ASSESSEE BY THE LD. COMMISSIONER OF IN COME TAX (A). ITA NO. 827/DEL/2012 12 THIS FACT WAS NOT CONTROVERTED BY THE LD. DEPARTMENT AL REPRESENTATIVE. UNDER THE CIRCUMSTANCES, IN T HE FACTS AND CIRCUMSTANCES OF THE CASE, WE DO NOT FIND ANY ILLEGA LITY OR INFIRMITY IN THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX (A) . ACCORDINGLY, WE UPHOLD THE SAME. 18. IN THE RESULT, THE APPEAL FILED BY THE REVENUE STANDS DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT ON 31/8/2012. SD/- SD/- [ [[ [C.M. GARG C.M. GARG C.M. GARG C.M. GARG] ]] ] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] [SHAMIM YAHYA] JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER DATE 31/8/2012 SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR SRBHATNAGAR COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: COPY FORWARDED TO: - -- - 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT (A) 5. DR, ITAT TRUE COPY BY ORDER, ASSISTANT REGISTRAR, ITAT, DELHI BENCHES