2018 (6) TMI 745 - AT - Income Tax

Nature of maintenance charges received - property income or income from other sources - Held that - Issue as squarely covered by the decision of Co-ordinate Bench of this Tribunal in assessee s own case 2013 (11) TMI 656 - MADRAS HIGH COURT amenity charges cannot be assessed under the head income from house property and the same has to be assessed under the head Income from other sources . Assessing Officer treated the entire income under single head i.e. income from house property and restricted the expenses as per. sec.24 of the Act. The income has to be assessed under two heads as above and admissible deduction has to be given - the issue raised in this appeal is restored to the file of ld. Assessing Officer for re-adjudication after granting of opportunity of being heard - thus allowed for statistical purpose. Disallowance of depreciation on fighting and lift equipments - Held that - following the decision of Co-ordinate Bench of this Tribunal in assessee s own case this issue is also restored to the file of ld. Assessing Officer for re-adjudication after granting of adequate opportunity of being heard - thus allowed for statistical purpose. Amount paid for breach of contract - capital or revenue expenditure - Held that - The violation of the conditions of MOU has led to the cancellation of the joint venture and the assessee being held responsible for repayment of part of expenditure incurred as also damages - this is nothing, but loss of capital - thus AO was right in holding that the expenditure was in fact loss of capital and not revenue expenditure - Decided against the assessee.

Summary

Issues involved:
1. Treatment of maintenance charges as property income.
2. Disallowance of depreciation claimed for firefighting and lift equipments.
3. Disallowance of miscellaneous expenses paid to another company.
4. Sending the issue of additions to property income back to the Assessing Officer.

Analysis:
1. The appellant challenged the treatment of maintenance charges as property income instead of income from other sources. The issue was previously addressed in the appellant's own case, where it was held that amenity charges should be assessed under "Income from other sources." Consequently, the tribunal remitted the issue back to the Assessing Officer for re-adjudication, allowing the appeal for statistical purposes.

2. The appellant contested the non-allowance of depreciation claimed for firefighting and lift equipments. This issue was also referred back to the Assessing Officer for re-adjudication based on previous decisions in the appellant's case, leading to the allowance of the appeal for statistical purposes.

3. The appellant disputed the disallowance of miscellaneous expenses paid to another company, arguing that it was a business expenditure. However, the tribunal found that the expenses were incurred due to a breach of contract in a joint venture agreement, resulting in a loss of capital rather than revenue expenditure. As a result, the appeal on this issue was dismissed.

4. The appellant raised concerns about the issue of additions to property income being sent back to the Assessing Officer. However, the appellant chose not to press these grounds, leading to the dismissal of the appeal on this matter. Ultimately, the tribunal partly allowed the appeal for statistical purposes.