ACIT - 5(3)(2), MUMBAI vs. XTP DESIGN FURNITURE LTD., CHENNAI

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ITA 717/MUM/2017Status: DisposedITAT Mumbai25 September 2018AY 2012-133 pages

In favour of the assessee: the Revenue's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the CIT(A)'s decision, agreeing that income from amenities provided to tenants is assessable under the head 'income from house property'. This was based on previous decisions in the assessee's own case and Supreme Court judgments.

What were the facts?

The assessee offered income from amenities provided to tenants under 'income from house property'. The Assessing Officer assessed this income under 'income from other sources'. The CIT(A) reversed the AO's decision, following previous tribunal rulings.

What were the issues?

The primary issue was whether income received for providing amenities to tenants should be classified under 'income from house property' or 'income from other sources'.

Which sections of the Income-tax Act were involved?

Not explicitly mentioned, but relates to heads of income under the Income Tax Act.

AI-generated summary — verify with the full judgment below

Cases cited in this judgment(4)Show list

Detected automatically from the text. Citations are also linked where they appear in the judgment. The count shows how many other judgments on BharatTax rely on the same authority.

Income Tax Appellate Tribunal, “G” Bench, Mumbai

Before: Shri B.R. Baskaran (AM) & Shri Ravish Sood(JM)

For Appellant: Shri Yogesh A Thar &, Ms. Ritu Punjabi
For Respondent: Shri Nishant Somaiya
Hearing: 25.9.2018Pronounced: 25.9.2018

O R D E R Per B.R. Baskaran (AM) :-

The appeal filed by the Revenue is directed against the order dated 26.10.2016 passed by the learned CIT(A)-10, Mumbai and it relates to A.Y. 2012-13. Solitary issue urged in this appeal is whether the learned CIT(A) was justified in holding that the amount received towards providing amenities by the assessee to its tenants is assessable under the head ‘income from house property’, as against action of the Assessing Officer in assessing the same under the head ‘income from other sources’.

2.

We have heard the parties and perused the record. The assessee has received rental income and also income from amenities provided to its tenants. The assessee offered rental income as well as income from providing amenities under the head ‘income from house property’. The Assessing Officer took the view that the income from providing amenities should be assessed under the head ‘income from other sources’ and accordingly assessed the same under the head ‘income from other sources’. The learned CIT(A) noticed that an identical

2 M/s. XTP Design Furniture Limited issue was considered by the Tribunal in assessee’s own case in A.Y. 2009-10 (ITA No. 1106/Mum/2013 dated 20.8.2014) and also in A.Y. 2010-11 (ITA No. 25/Mum/2014) and it was held that the amount received towards amenities provided by the assessee shall be assessable under the head ‘income from house property’. Accordingly, the learned CIT(A) reversed the decision of the Assessing Officer and hence the Revenue is aggrieved.

3.

Learned AR submitted that the amenities provided by the assessee consisted of use of terrace area, car parking space, provide a liftman, security system, fire fighting system and also to maintain common area facilities. Learned AR submitted that these are intrinsically connected with renting of property. Hence, the Coordinate Bench of the Tribunal in A.Y. 2009-10 has held that the amount received towards amenities is assessable under the head ‘income from house property’. In A.Y. 2010-11, the assessee has placed reliance on the decision rendered by Hon'ble Supreme Court in the case of Shambhu Investment Private Limited (263 ITR 143) and also in the case of Sultan Brothers Private Limited (51 ITR 353) to support its view. Accordingly, the Tribunal in A.Y. 2010-11 also has held that the amount received towards amenities is assessable under the head ‘income from house property’.

4.

On the contrary, learned DR took support of the decision rendered by Hon'ble Kolkata High Court in the case of CIT Vs. Model Manufacturing Co. Pvt. Ltd.(175 ITR 374) and also decision rendered by Hon'ble P&H High Court in the case of Gowardhan Das and Sons (158 Taxman 465) and contended that the amount received towards amenities is assessable under the head ‘income from other sources’.

5.

Having heard the rival contentions, we are of the view that the order passed by the learned CIT(A) does not call for any interference as the learned CIT(A) has followed the decision rendered by the Coordinate Benches of the Tribunal in A.Y. 2009-10 in assessee’s own case. In A.Y. 2010-11, the Tribunal has followed the decision rendered by Hon'ble Supreme Court in the case of 3 M/s. XTP Design Furniture Limited Shambhu Investment Pvt. Ltd. & Sultan Brothers Pvt. Ltd. (supra) to support its decision. In view of the above, we uphold the order passed by the learned CIT(A) on this issue.

6.

In the result, appeal filed by the Revenue is dismissed. Order has been pronounced in the Court on 25.9.2018.

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