JK INVESTMENT ,MUMBAI vs. CIT (A), MUMBAI

The present appeal filed by the assessee is directed against the order passed u/s 250 of the Income Tax Act, 1961 ([hereinafter “the Act”] by the Learned Commissioner of Income Tax (Appeals)- 32/National Faceless Appeal Centre, Delhi [hereinafter „the CIT(A)‟] dated 31.03.2023 for A.Y 2012-13. 2. The grounds of appeal of the assessee are as under: 1. The Ld. CIT(A) has completed the assessment without considering the facts & circumstances of the case, which is contrary to law and is against the principles of natural justice.

The Ld. CIT(A) has erred in passing the order against appellant without considering the submissions dated 10.02.2021 made by the appellant which are on record on E- filing portal. 3. The Ld. CIT(A) has erred in disallowing 30% deduction from rent received from Amenities Agreement by ignoring the fact that the Amenities Agreement is part and parcel of Rental Agreement and is inseparable i.e. one cannot independently let out only amenities. 3. Fact in brief is that return of income declaring total income of ₹ 33,06,720/- was filed on 30.09.2012. The case was subject to scrutiny assessment and notice u/s 143(2) of the Act was issued on 24.09.2013. The assessee is a partnership firm engaged in the business of trading in photo printing paper, chemical and other photographic items. During the year under consideration the assessee has received gross rental income of Rs. 88,68,750/- out of which it had claimed a standard deduction of 30% to the amount of ₹ 26,66,625/- u/s 24(1)(a) of the Act and offered net of 62,08,125/- as income from house property. The AO mentioned that the assessee has also claimed deduction at the rate of 30% of ₹17,18,600 (rental receipt for amenities). The AO was of the view that rent received from the amenities is to be taxed income from other source. Therefore, the amount of Rs. 5,15,580/- claim as deduction u/s 24(1)(a) of the Act was disallowed and added to the total income of the assessee.

The assessee filed appeal before the Ld. CIT(A). The Ld CIT(A) has dismissed the appeal of the assessee. 5. Heard both the sides and perused materials available on record. Without reiterating the facts as discussed above, the AO has disallowed Rs 5,15,580/- being 30% of Rs 17,18,600/- for rent received from amenities treating the same as income from other sources. 6. During the course of appellate proceedings before me, the Ld. counsel has filed copies of following agreements:  Amenities Agreement dated 31.05.2011 executed between the appellant and Dena Bank.  Amenities Agreement dated 22.10.2011 between the Appellant and Muthoot Fincorp Ltd. With the assistance of Ld. Representatives, I have perused above referred amenities agreement placed in the paper book. Both the agreements are referred as amenities agreement. Vide agreement dated 31.05.2011 the assessee has provided premises on leave and license agreement and received rent for use of the premises to the amount of 71,50,150/- vide agreement dated 22.10.2011 the assessee has received rent of ₹ 17,18,600/- for use of toilet, parking space, use for different facility etc. Looking to the above facts it is observed that the amenities referred mainly to the extra space provided by the assessee which were integral part of