ITO WD 19(2)(3), V. JOLLY HIRISE CO. OP. HSG. SOC. LTD,

MA 762/MUM/2009

• Counselvise Citation: [2010] 123 COUNSELVISE.COM (IT) 4523 (ITAT-MUMBAI)
• Duration Of Justice: 4 month(s) 5 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 24-03-2010
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2001-2002
• Appeal Filed On: 18-11-2009
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: K RAVIKIRAN
• Assessee Lawyers: S V NAVALKAR

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, MUMBAI. BEFORE SHRI S.V.MEHROTRA, AM & SMT ASHA VIJAYARAGH AVAN,JM M.A.NO.762/M/2009 (ARISING OUT OF I.T.A. NO. 762MUM/2003) ASSESSMENT YEAR: 2001-02 THE INCOME TAX OFFICER, V. M/S. JOLLY HIGHRISE CO .OP.HSG. SOC. WARD 19(3)-2, 3 RD FLOOR, LTD., 241/A, PALIMALA ROAD, PIRAMAL CHAMBERS, PAREL, BANDRA (W), MUMBAI-50. MUMBAI-12. PA NO.AABFJ 6559 S (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.RAVIKIRAN & NAVIN GUPTA RESPONDENT BY : SHRI S.V.NAVALKAR O R D E R PER S.V.MEHROTRA, AM THE DEPARTMENT HAS FILED THIS MISCELLANEOUS APPLIC ATION MAINLY ON THE GROUND THAT ON ACCOUNT OF MIS-APPROPRIATION OF FACTS, A MISTAKE HAS CREPT IN THE ORDER OF THE TRIBUNAL DATED 4.4.2006 IN ITA NO.2546/M/2003. 2, BRIEF FACTS ARE THAT THE ASSESSEE, A CO-OP. SOCI ETY, FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2001-02 DECLARING LOSS AT RS.25,024 /-. IN ITS INCOME AND EXPENDITURE ACCOUNT, THE ASSESSE HAD SHOWN A SUM OF RS.13,70,57 6/- RECEIVED FROM CELLULAR BASE STATIONS INSTALLED ON THE TERRACE OF ONE OF THE BUI LDINGS, IN ADDITION TO THE RECEIPTS FROM THE MEMBERS OF THE SOCIETY AND HAD ALSO DEBITED THE EXPENSES OF THE HOUSING SOCIETY. COPY OF THE INCOME AND EXPENDITURE STATEMENT HAS BE EN FILED ALONGWITH M.A. IN THE ASSESSMENT ORDER, A SUM OF RS.13,70,576/- WAS HELD AS INCOME FROM OTHER SOURCES FOR THE REASONS THAT THE SAME COULD NOT BE EQUATED WIT H INCOME FROM MEMBERS AND CONSEQUENTLY, DID NOT FELL WITHIN THE PURVIEW OF T HE CONCEPT OF MUTUALITY. THE AO ALSO 2 OBSERVED THAT AS PER SPECIFIC CLAUSES IN THE AGREEM ENT WITH THE ASSESSEE, THE LICENSEE COMPANIES WERE REQUIRED TO PAY THE ASSESSEE, ELECTR ICITY CHARGES AND ALL EXISTING AND FUTURE MUNICIPAL TAXES AND HENCE, DID NOT ALLOW THE EXPENSES AGAINST THE SAID INCOME. ON APPEAL, LD CIT (A) HELD THAT THE SAID SUM OF RS.13, 70,576/- COMPRISED OF TWO COMPONENTS NAMELY, RENT OF RS.8,54,900/- RECEIVED FOR HIRING THE TERRACE AND A SUM OF RS.5,15,676/- RECEIVED AS MAINTENANCE AND SERVICE CHARGES. LD CI T (A) HELD THAT THE RENTAL INCOME WAS TO BE TREATED AS INCOME FROM HOUSE PROPERTY AS CL AIMED BY THE ASSESSEE AND EXPENSES REGARDING REPAIRS AND LIFT MAINTENANCE BEING ATTRIB UTABLE TO THE BUILDING WERE HELD TO BE ALLOWABLE U/S.24 OF THE ACT AND NO SEPARATE DEDUCTI ON FOR THE SAME WAS TO BE ALLOWED. AS REGARDS THE MAINTENANCE AND SERVICE CHARGES OF R S.5,15,676/-, LD CIT (A) HELD THAT THE SAME WAS ASSESSABLE UNDER THE HEAD INCOME FROM OTH ER SOURCES AND EXPENSES ATTRIBUTABLE TO EARNING OF THIS SUM E.G. EXPENSES LIKE WATCH AND WARD ETC BEING NOT SPECIFICALLY IDENTIFIABLE WERE TO BE ESTIMATED, HE ESTIMATED THE SAME AT RS.25,000/- . 3. IN ORDER TO CLEARLY BRING OUT THE FACTS, WE REPR ODUCE HEREIN-UNDER THE RELEVANT FACTS FROM THE ASSESSMENT ORDER AS UNDER:- IN THE ABOVE BACKDROP, THE ASSESSEES CASE NEEDS TO BE ANALYSED. AS ALREADY STATED ABOVE, THE ASSESSEE HAS CREDITED RECEIPTS ON ACCOUNT OF INCOME FROM PROPERTY AT RS.13,70,576/-. DURING THE COURSE OF ASSESSMENT PROCEEDINGS, ASSESSEE WAS REQUESTED TO FURNISH DETAILS OF SUCH RECEIPTS AND O N GOING THROUGH THE DETAILS FURNISHED BY THE ASSESSEE, IT IS SEEN THAT THE FOLL OWING RECEIPTS ARE IN THE NATURE OF COMPENSATION RECEIVED FROM VARIOUS COMPANIES FOR AL LOWING THEM TO USE CERTAIN PORTION OF THE TERRACE OF THE SOCIETY BUILDING. SR. NO. NAME OF THE PARTIES TO WHOM LET OUT AMOUN T OF RENT 1. PAGE POINT SERVICES (I) LTD. RS.1,95,680/- 2. PAGE POINT SERVICES RS.2,54,900/- 3. GATEWAY SYSTEM (I) LTD. RS.4,60,000/- 4. BPL MOBILE COMMUNICATION LTD. RS.4,59,996/- ASSESSEE HAS SHOWN THE ABOVE INCOME AS MAINTENANCE RECEIPTS FROM THE SAID COMPANIES. AS THE ABOVE COMPANIES ARE NOT THE MEMBE RS OF THE ASSESSEE SOCIETY, THE RECEIPTS SHOWN BY THE ASSESSEE CLEARLY DO NOT FALL UNDER THE PURVIEW OF CONCEPT OF MUTUALITY. FURTHER, IT IS PERTINENT TO MENTION THA T THE ABOVE STATED LICENCEE COMPANIES ARE IN AGREEMENT WITH THE ASSESSEE TO PAY THE ELECTRICITY CHARGES AND ALL EXISTING AND FUTURE MUNICIPAL TAXES AS PER THE SPEC IFIC CLAUSE OF THE AGREEMENT ENTERED INTO BY AND BETWEEN THEM. THEREFORE, IT IS EVIDENT THAT THE ASSESSEE HAS NOT BORNE THOSE EXPENSES IN RESPECT OF THE USER OF A PO RTION OF PROPERTY BY THOSE 3 COMPANIES AND IT HAS SPENT NOTHING TO EARN INCOME B Y WAY OF COMPENSATION. ACCORDINGLY, THOSE RECEIPTS ARE DEFINITELY CHARGEAB LE TO TAX IN ACCORDANCE WITH PROVISIONS OF THE I.T.ACT. 4. THE STATEMENT OF FACTS, INTER ALIA, FURNISHED BE FORE LD CIT (A) READS AS UNDER: DURING THE YEAR, THE SOCIETY HAS ENTERED INTO A LEA VE AND LICENSE AGREEMENT WITH THREE COMPANIES FOR RENTING OUT A PORTION OF THE TE RRACE PREMISES OF THE SOCIETY BUILDING FOR INSTALLATION OF CELLULAR BASE STATION OF THESE COMPANIES TOGETHER WITH RELATED ACCESSORIES. THE SOCIETY HAS RECEIVED RENTA LS FROM THESE COMPANIES, WHICH HAS BEEN OFFERED FOR TAX UNDER THE HEAD INCOME FROM HOUSE PROPERTY. THE SOCIETY HAS ALSO ENTERED INTO A MANAGEMENT AND SERVICE AGREEMENT WITH THE COMPANIES FOR PROVIDING ELEVATOR SERVICES TO THEIR PERSONNEL, 24 HOURS SECURITY SERVICES FOR THE EQUIPMENTS INSTALLED AND OTHER NOR MAL MAINTENANCE AND HOUSEKEEPING SERVICES IN AND AROUND THE INSTALLATIO N. FOR SUCH MAINTENANCE SERVICES, THE SOCIETY HAS RECEIVED COMPENSATION, WH ICH HAS BEEN OFFERED TO TAX UNDER THE HEAD INCOME FROM OTHER SOURCES. THE DETAILS OF RENTAL INCOME AND MAINTENANCE AND SE RVICE CHARGES RECEIVED FROM THE THREE COMPANIES ARE AS UNDER:- NAME OF THE COMPANY RENT RECEIVED (RS.) MAINTENANCE AND SERVICE CHARGES RECEIVED.(RS.) PAGE POINT SERVICES (I) LTD. 2,63,644 1,26,553 GATEWAY SYSTEM (I) LTD. 3,00,000 1,60,000 BPL MOBILE COMMUNICATION LTD. 3,00,000 1,59,996 THE SOCIETY HAS ADJUSTED THE MAINTENANCE AND SERVIC E CHARGES RECEIVED FROM THE ENTITIES AGAINST THE TOTAL EXPENDITURE INCURRED DUR ING THE YEAR AND HAS ARRIVED AT THE AMOUNT OF RS.25,024 BEING THE EXCESS OF EXPENDITURE OVER INCOME AS SHOWN IN THE COMPUTATION OF INCOME ATTACHED TO THE RETURN OF INC OME. 5. THE FINDINGS OF LD CIT (A) AT PARA 6 ARE AS UNDE R:- AS REGARDS THE INCOME FROM MAINTENANCE AND SERVICE CHARGES, THERE IS NO DISPUTE THAT THE SAME IS CORRECTLY ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ONLY QUESTION IS REGARDING THE QUANTU M OF EXPENSES TO BE ALLOWED AS DEDUCTION FROM THE RECEIPTS OF RS.5,15,676/-. I AM UNABLE TO AGREE WITH THE AO THAT NO EXPENDITURE AT ALL WAS INCURRED BY THE APPELLANT SOCIETY. IT IS APPARENT THAT THE CELLULAR BASE STATION INSTALLED UPON THE TERRACE WO ULD REQUIRE FREQUENT VISITS FROM THE MAINTENANCE AND OPERATING STAFF AT ANY TIME OF THE DAY OR NIGHT. THIS WOULD DEFINITELY INVOLVE SOME EXTRA EXPENDITURE ON WATCH AND WARD, L IFT MAINTENANCE, REPAIRS, ETC. HOWEVER, THE EXPENDITURE ON REPAIRS AND LIFT MAINT ENANCE, BEING ATTRIBUTABLE TO THE BUILDING, WOULD BE COVERED IN THE STANDARD DEDUCTIO N U/S.24 FROM HOUSE PROPERTY INCOME. NO FURTHER DEDUCTIONS FOR THE SAME ITEMS C AN BE ALLOWED U/S.57(III). AS FAR THE ALLOWABLE EXPENSES, SINCE THE SPECIFIC EXPENDIT URE ON WATCH AND WARD ETC, 4 ATTRIBUTABLE TO THE EARNING OF THE SERVICE CHARGES IS NOT IDENTIFIABLE, THE SAME CAN ONLY BE ESTIMATED. AT THE SAME TIME, IT IS DIFFICU LT TO AGREE WITH THE APPELLANT THAT THE ENTIRE INCREMENTAL EXPENDITURE OVER THE PRECEDING Y EAR WAS ATTRIBUTABLE TO EARNING OF THE SAID INCOME. ON CONSIDERATION OF THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE, I CONSIDER IT FAIR AND REASONABLE TO ESTIMATE THE EXPENDITURE INCURRED FOR EARNING THE SAID INCOME AT RS.25,000/-. AS ALREADY MENTIONED ABOVE, THE EXPENSES ON REPAIRS AND LIFT MAINTENANCE WILL BE COVERED BY THE DEDUCTION FOR REPAIRS U/S.24. ACCORDINGLY, THE AO IS DIRECTED TO ALLOW DEDUCTION OF RS.25,000/- WHILE COMPUTING THE INCOME FROM MAINTENANCE AND SERVICE CHARGES REC EIVED UNDER THE HEAD INCOME FROM OTHER SOURCES. BEING AGGRIEVED WITH THE ORDER OF LD CIT (A), THE A SSESSEE HAD TAKEN THE FOLLOWING GROUNDS OF APPEAL: 1. THE LD CIT (A) ERRED IN DIRECTING THE AO TO ALL OW AN ADHOC DEDUCTION OF ONLY RS.25,000/- TOWARDS WATCH AND WARD EXPENSES WHILE C OMPUTING INCOME FROM SERVICE AND MAINTENANCE CHARGES RECEIVED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE LD CIT (A) ERRED IN NOT ALLOWING THE ENTIRE EXP ENDITURE INCURRED ON REPAIRS AND LIFT AND MAINTENANCE AS DEDUCTION U/S.57(III)FR OM THE INCOME FROM OTHER SOURCES. 6. THE ITAT VIDE ITS ORDER DATED 4.4.2006 IN PARAS 3 & 4 HELD AS UNDER:- 3. THE FIRST GROUND RAISED BY THE ASSESSEE IS THAT THE CIT (A) HAS ERRED IN DIRECTING THE AO TO ALLOW AN ADHOC DEDUCTION OF ONL Y RS.25,000/- TOWARDS WATCH AND WARD EXPENSES WHILE COMPUTING INCOME FROM SERVI CE AND MAINTENANCE CHARGES RECEIVED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSEE HAS CLAIMED EXPENSES OF RS.5,15,676/- TOWARDS EARNING I NCOME UNDER THE HEAD INCOME FROM OTHER SOURCES. THE AO HELD THAT NO E XPENDITURE WOULD BE INCURRED FOR EARNING THE SAID INCOME. BUT THE CIT (A) HAS HELD THAT SOME EXPENDITURE WOULD BE NECESSARY AS THE OPERATING STA FF WOULD REQUIRE FREQUENT VISITS FROM CELLULAR BASE STATION TO TERRACE OF THE BUILDING. BUT THE CIT (A) HELD THAT THE REPAIRS AND LIFT MAINTENANCE EXPENDITURE A TTRIBUTABLE TO BUILDING WOULD BE COVERED IN THE STANDARD DEDUCTION U/S.24. ON THIS BASIS, HE ALLOWED A DEDUCTION OF RS.25,000/-. ACCORDING TO THE ASSESSEE, THE ENTIRE AMOUNT SHOULD HAVE BEEN ALLOWED. 4. WE CONSIDERED THE MATTER. WE AGREE WITH THE CIT (A) THAT THE EXPENDITURE RELATING TO REPAIRS AND MAINTENANCE OF LIFT IS ATTR IBUTABLE TO BUILDING AND WOULD BE COVERED UNDER STANDARD DEDUCTION U/S.24. BUT THIS IS NOT ENTIRELY CORRECT. THE LIFT IN A MULTI STORIED BUILDING IS USED VERY FREQUENTLY FOR SO MANY PURPOSES INCLUDING THAT OF EARNING INCOME FROM OTHER SORUCES. THEREFO RE, SUCH EXPENDITURE CANNOT BE ATTRIBUTED TO HOUSE PROPERTY INCOME ENTIRELY. A RE ASONABLE PART OF THE EXPENDITURE SHOULD BE ALLOCATED UNDER THE HEAD INCOME FROM OTH ER SOURCES. THIS IS THE CASE WITH THE SECURITY STAFF EXPENSES ALSO. THEREFORE, WE DIRECT THE AO TO ALLOW 50% 5 OF THE CLAIM OF THE ASSESSEE AS NECESSARY EXPENDITU RE TO BE INCURRED UNDER THE HEAD INCOME FROM OTHER SOURCES. WITH THIS DIRECT ION, THIS APPEAL IS DISPOSED OF AS PARTLY ALLOWED. 7. THE MAIN GRIEVANCE OF THE DEPARTMENT IS THAT THE ASSESSEE HAD NOT CLAIMED EXPENSES OF RS.5,15,676/- AND THE ASSESSEE MISDIRE CTED THE ITAT. IT IS POINTED OUT THAT THE OBSERVATION OF THE TRIBUNAL THAT THE ASSESSEE HAS CLAIMED EXPENSES OF RS.5,15,676/- TOWARDS EARNING INCOME UNDER THE HEAD INCOME FROM OTHER SOURCES DOES NOT DEMONSTRATE THE CORRECT FACTUAL POSITION. IT IS, T HEREFORE, SUBMITTED THAT A MISTAKE APPARENT ON THE FACE OF RECORD, HAS CREPT IN THE OR DER OF THE TRIBUNAL. 8. LD COUNSEL FOR THE ASSESSEE SUBMITTED THAT THE A SSESSEE NEVER MISDIRECTED THE TRIBUNAL AND ON PROPER APPRECIATION OF ALL RELEVANT FACTS, THE TRIBUNAL HAS ALLOWED 50% OF RS.5,15,676/-. 9. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS OF BOTH THE SIDES. ADMITTEDLY, A SUM OF RS.13,70,576/- WAS SHOWN AS INCOME FROM PROPERTY ON THE INCOME SIDE OF THE INCOME AND EXPENDITURE ACCOUNT. LLD CIT (A) IN PARA 2.2 OF HIS ORDER HAS NOTED THE CONTENTION OF THE ASSESSEE WHICH ARE THAT THE ASSESSEE HAD ENTERE D INTO INDIVIDUAL AGREEMENTS WITH EACH OF THE THREE COMPANIES SEPARATELY FOR MAINTENANCE AND SERVICE CHARGES FOR SERVICES TO BE PROVIDED BY THE ASSESSEE TO THE SAID COMPANIES. TH ESE CHARGES INCLUDED THE FOLLOWINGS: A) USER OF ELEVATOR SERVICES TO THE COMPANYS PERSO NNEL VISITING THE PREMISES TO INSPECT AND SERVICE THE EQUIPMENTS INSTALLED; B) PROVIDING 24 HOURS SECURITY SERVICES FOR THE EQU IPMENTS INSTALLED IN THE BUILDING PREMISES; C) OTHER NORMAL MAINTENANCE AND HOUSEKEEPING SERVIC ES IN AND AROUND THE INSTALLATIONS. LD CIT (A) HAD HELD THAT A SUM OF RS.8,54,900/- OUT OF RS.13,70,576/- WAS TO BE TREATED AS INCOME FROM HOUSE PROPERTY AND, THEREFORE, HAD OBSERVED THAT EXPENDITURE ON REPAIRS AND LIFT MAINTENANCE BEING ATTRIBUTABLE TO THE BUIL DING, WOULD BE COVERED IN THE STANDARD DEDUCTION U/S.24 FROM HOUSE PROPERTY INCOME. HE, T HEREFORE, HELD THAT NO FURTHER DEDUCTION COULD BE ALLOWED FOR THE SAME. FURTHER, HE OBSERVED THAT SINCE SPECIFIC EXPENDITURE ON WATCH AND WARD ETC ATTRIBUTABLE TO T HE EARNING OF THE SERVICE CHARGES WERE 6 NOT IDENTIFIABLE, THEREFORE, THE SAME HAD TO BE EST IMATED. AT THIS JUNCTURE, WE MAY OBSERVE THAT THE DEPARTMENT DID NOT FILE ANY CROSS OBJECTION AGAINST THESE FINDINGS OF LD CIT (A). LD CIT (A) HAD ESTIMATED AN ADHOC EXPEND ITURE OF RS.25,000/- AND THE ASSESSEE WAS AGGRIEVED PRIMARILY WITH THE QUANTUM O F EXPENDITURE ATTRIBUTABLE TO THE EARNING OF INCOME TO THE EXTENT OF RS.5,15,676/-. THE TRIBUNALS FINDINGS HAVE TO BE APPRECIATED IN THE BACKDROP OF THESE FACTS ONLY. I T IS TRUE THAT THE ASSESSEE HAD NOT SPECIFICALLY CLAIMED THE EXPENDITURE OF RS.5,15,676 /- BUT HAD DEFINITELY SHOWN A LOSS OF RS.25,023 IN ITS INCOME AND EXPENDITURE ACCOUNT WHI CH WAS ARRIVED AT AFTER CLAIMING ALL THE EXPENSES INCLUDING SALARY AND SECURITY OF RS.5, 28,963/-. THE EXPENSES WERE IN RESPECT OF ENTIRE ACTIVITIES CARRIED OUT BY THE ASS ESSEE. THEREFORE, THEY HAD TO BE SUITABLY APPORTIONED BETWEEN EXEMPTED INCOME FROM MEMBERS AN D TAXABLE AMOUNT FROM NON- MEMBERS. LD CIT (A) HAD HELD THAT EXPENDITURE INC URRED ON WATCH AND WARD ETC HAD TO BE ALLOWED AGAINST THE INCOME ASSESSABLE UNDER THE HEAD INCOME FROM OTHER SOURCES. UNDER THESE FACTS, THE TRIBUNAL ESTIMATED THE EXPEN DITURE AT 50% OF THE INCOME OF RS.5,15,676/- AND THAT WAS ONLY THE BASIS FOR ESTIM ATING THE EXPENDITURE INCURRED FOR EARNING THE INCOME. THEREFORE, WE AMEND THE TRIBUN ALS ORDER AND NOW PARAS 3 & 4 AS UNDER: 3. THE FIRST GROUND RAISED BY THE ASSESSEE IS THA T THE CIT (A) HAS ERRED IN DIRECTING THE AO TO ALLOW AN ADHOC DEDUCTION OF ONL Y RS.25,000/- TOWARDS WATCH AND WARD EXPENSES WHILE COMPUTING INCOME FROM SERVI CE AND MAINTENANCE CHARGES RECEIVED UNDER THE HEAD INCOME FROM OTHER SOURCES. THE ASSESSEE HAS CLAIMED THAT EXPENDITURE INCURRED ON REPAIRS AND L IFT AND MAINTENANCE IS DEDUCTIBLE U/S.57(III)FROM THE INCOME FROM OTHER S OURCES. THE AO HELD THAT NO EXPENDITURE WOULD BE INCURRED FOR EARNING THE SAID INCOME. BUT THE CIT (A) HAS HELD THAT SOME EXPENDITURE WOULD BE NECESSARY AS TH E OPERATING STAFF WOULD REQUIRE FREQUENT VISITS FROM CELLULAR BASE STATION TO TERRACE OF THE BUILDING. BUT THE CIT (A) HELD THAT THE REPAIRS AND LIFT MAINTENANCE EXPENDITURE ATTRIBUTABLE TO BUILDING WOULD BE COVERED IN THE STANDARD DEDUCTION U/S.24. ON THIS BASIS, HE ALLOWED A DEDUCTION OF RS.25,000/-. ACCORDING TO T HE ASSESSEE, THE ENTIRE AMOUNT SHOULD HAVE BEEN ALLOWED. 4. WE CONSIDERED THE MATTER. WE AGREE WITH THE CIT (A) THAT THE EXPENDITURE RELATING TO REPAIRS AND MAINTENANCE OF LIFT IS ATTR IBUTABLE TO BUILDING AND WOULD BE COVERED UNDER STANDARD DEDUCTION U/S.24. BUT THIS IS NOT ENTIRELY CORRECT. THE LIFT IN A MULTI STORIED BUILDING IS USED VERY FREQUENTLY FOR SO MANY PURPOSES INCLUDING THAT OF EARNING INCOME FROM OTHER SOURCES. THEREFO RE, SUCH EXPENDITURE CANNOT BE ATTRIBUTED TO HOUSE PROPERTY INCOME ENTIRELY. A RE ASONABLE PART OF THE EXPENDITURE SHOULD BE ALLOCATED UNDER THE HEAD INCOME FROM OTH ER SOURCES. THIS IS THE CASE 7 WITH THE SECURITY STAFF EXPENSES ALSO. THEREFORE, WE DIRECT THE AO TO ALLOW 50% OF RS.5,15,676/- BEING INCOME FROM OTHER SOURCES AS NECESSARY EXPENDITURE TO BE INCURRED UNDER THE HEAD INCOME FROM OTHER SOURCES FOR EARNING THE SAID INCOME. WITH THIS DIRECTION, THIS APPEAL IS DISPOSED OF AS PARTLY ALLOWED. 10. IN THE RESULT, M.A. FILED BY THE DEPARTMENT IS DISMISSED. PRONOUNCED ON 24 TH MARCH, 2010 SD/- (ASHA VIJAYARAGHAVAN) (JUDICIAL MEMBER) SD/- (S.V. MEHROTRA) (ACCOUNTANTMEMBER) MUMBAI, DATED 24 TH MARCH , 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI IN THE INCOME TAX APPELLATE TRIBUNAL, B BENCH, MUMBAI. BEFORE SHRI S.V.MEHROTRA, AM & SMT ASHA VIJAYARAGH AVAN,JM M.A.NO.762/M/2009 (ARISING OUT OF I.T.A. NO. 2546MUM/2003) ASSESSMENT YEAR: 2001-02 THE INCOME TAX OFFICER, V. M/S. JOLLY HIGHRISE CO .OP.HSG. SOC. 8 WARD 19(3)-2, 3 RD FLOOR, LTD., 241/A, PALIMALA ROAD, PIRAMAL CHAMBERS, PAREL, BANDRA (W), MUMBAI-50. MUMBAI-12. PA NO.AABFJ 6559 S (APPELLANT) (RESPONDENT) APPELLANT BY: SHRI K.RAVIKIRAN & NAVIN GUPTA RESPONDENT BY : SHRI S.V.NAVALKAR CORIGENDUM A TYPOGRAPHICAL ERROR HAS CREPT IN THE CAUSE TIT LE IN ORDER DATED 24 TH MARCH, 2010, WHICH MAY NOW BE READ AS UNDER:- M.A.NO.762/M/2009 (ARISING OUT OF I.T.A. NO. 2546MUM/2003) ASSESSMENT YEAR: 2001 2. PARA 10 OF THE ORDER BE SUBSTITUTED AS UNDER: 10. IN THE RESULT, M.A. FILED BY THE DEPARTMENT IS ALLOWED IN TERMS OF ABOVE MODIFICATIONS. SD/- (ASHA VIJAYARAGHAVAN) (JUDICIAL MEMBER) SD/- (S.V. MEHROTRA) (ACCOUNTANTMEMBER) MUMBAI, DATED 26 TH MARCH , 2010 PARIDA COPY TO: 1. THE APPELLANT 2. THE RESPONDENT 3. COMMISSIONER OF INCOME TAX (APPEALS)-, MUMBAI 4. COMMISSIONER OF INCOME TAX, CITY-, MUMBAI 5. DEPARTMENTAL REPRESENTATIVE, BENCH B, MUMBAI //TRUE COPY// BY ORDER ASSTT. REGISTRAR, ITAT, MUMBAI 9 DATE INITIALS 1. DRAFT DICTATED ON 22.3.2010 PS 2. DRAFT PLACED BEFORE AUTHOR 23..3.2010 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER AM/JM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER AM/J M 5. APPROVED DRAFT COMES TO THE SR. PS PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK PS 8. DATE ON WHICH FILE GOES TO THE HEAD CLERK 9. DATE OF DISPATCH OF ORDER 10