The Tax Publishers2019 TaxPub(DT) 5410 (Mum-Trib)

INCOME TAX ACT, 1961

Section 14

Where the prime object of the assessee was to let out the portion of the property to various occupants by giving them additional right of using the furniture & fixtures and other common facilities for which rent was being paid, the income derived therefrom would be assessable under the head 'house property'. Hence, the amount received by the assessee for providing the amenities to the licensee as per the 'Amenities agreement' was rightly shown by it under the head 'house property.

Head of income - Income from house property or Income from other sources - Amenity charges received by assessee in terms of 'Amenities agreement' -

Assessee had shown the rental receipts from letting out of office premises in its Profit and loss account under two heads viz. Rent and Amenity Charges. AO taxed the amenity charges as income from other sources as against treating the same as income from house property. Held: Amenities/services referred in the 'Amenities Agreement' were inextricably interlinked with the very usage of the offices in the said building which had been let out by the assessee to the aforesaid license. Moreover, as the prime object of the assessee was to let out the portion of the property to various occupants by giving them additional right of using the furniture & fixtures and other common facilities for which rent was being paid, the income derived therefrom would be assessable under the head 'house property'. Hence, the amount received by the assessee for providing the amenities was rightly shown by it under the head 'house property. However, as per the “Amenities agreement” , amenity charges works out to less than that shown by assessee in its profit and loss account, thus matter was restored to AO.

Relied:CIT v. Shambhu Investment (P) Ltd. (2001) 249 ITR 47 (Cal) : 2001 TaxPub(DT) 1251 (Cal-HC), Shambhu Investment (P) Ltd. v. CIT (2003) 263 ITR 143 (SC) : 2003 TaxPub(DT) 948 (SC)

REFERRED : Sultan Brothers (P) Ltd. v. CIT, Bombay City II (1964) 51 ITR 353 (SC) : 1964 TaxPub(DT) 259 (SC), M/s. Star Gold (P) Ltd. v. Dy. CIT-5 (3), Mumbai in (ITA No. 351/Mum/2015, dt. 30-6-2017) : 2017 TaxPub(DT) 3955 (Mum-Trib)

FAVOUR : In assessee's favour by way of remand.

A.Y. : 2013-14


INCOME TAX ACT, 1961

Section 14A Rule 8D

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