|The Tax Publishers2020 TaxPub(DT) 5384 (Bang-Trib)
INCOME TAX ACT, 1961
Where assessee engaged in business of mall management, faced addition for not adding income received as HVAC charges and also for not adding sponsorship and promotional income (marketing income), it was held that marketing income was considered as net of expenses, and therefore did not appear separately having credited under the head income, and with regards to addition of security charges received, matter was remanded to verify claim of assessee that it was reimbursement and same were reduced under head 'Operating cost', forming part of 'Direct expenses' with a direction to assessee to produce debit notes/invoices.
Assessment - Additions to income - Assessee engaged in business of mall management - Income received as HVAC charges and marketing income, allegedly not shown by assessee
Assessee company was engaged in business of mall management. Its case was selected for scrutiny and AO made addition to income on allegation that assessee did not credit amount received as HVAC charges to its P&L account. AO further made addition that assessee debited expenses towards marketing cost but failed to credit amount received as sponsorship and promotional expenses. Case of assessee was that said charges were charged to the tenants and reduced from respective expenses and therefore the same were not part of revenue. Held: Lower authorities failed to appreciate that marketing income was considered as net of expenses, and therefore did not appear separately having credited under the head income. Assessee contended that it considered respective income under relevant heads before debiting expenses to profit and loss account. Thus, no justification in confirming the addition. Regarding addition of reimbursement of security charges received, it was submitted that, same were reduced under the head 'Operating cost', forming part of 'Direct expenses'. That aspect needed verification vis-a-vis debit notes/invoices raised. Assessee was directed to file relevant documents to establish its claim.
FAVOUR : Matter remanded
IN THE ITAT, BANGALORE BENCH
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