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TMI Blog2001 (7) TMI 276X X X X Extracts X X X X X X X X Extracts X X X X ..... e learned CIT(A) in upholding the above additions of Rs. 8,71,282, Rs. 5,84,732 and Rs. 2,86,550 is wholly unwarranted, unjustified, illogical and contrary to the principles of the judicial propriety by reason of not following the appellate orders of the Hon ble Tribunal in the appellant s own case for the earlier years without pointing out any distinguishing facts to justify a different conclusion. 4. That the order of the learned CIT(A) is also bad in law being based on conjectures, surmises and wrong premises or impression that the assessee had collected the amount under different names for the sale of flats inasmuch as the appellant-company was not the seller of the flats but was only service/maintenance agent having an independent legal identity and its own independent organisation, staff and the nominated members amongst the flat owners on its management committee. 5. That the order is bad in law and wrong on facts." 2. We have heard the counsel for the assessee as well as the Departmental Representative. 3. The counsel for the assessee, relying on the orders of the Tribunal in assessee s own case for asst. yrs. 1983-84 to 1991-92 except asst. yr. 1988-89 in which yea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o appoint you as service agents for the building on plot No. 43-Nehru Place,New Delhi, for maintenance, upkeep and preservation of the building, insurance, operation of common services and management of common areas on the following terms, conditions and agreement. 1. That you will undertake at your own cost: (a) Maintenance and repairs of main structure and common areas such as passages, corridors, common walls etc. of the building and other spaces used and enjoyed by the buyer in common with other flat owners of the building and fire insurance of building; (b) maintenance and repairs of lifts including replacement of parts and labour, etc.; (c) lighting the passages, corridors, basement and other common spaces; (d) supply of water used for gardens, common toilets and other common services; (e) painting and polishing of the exterior of the building and all common passages and corridors, etc.; (f) repair and maintenance of underground water reservoir, overhead tanks, water line, etc. to ensure continuous supply of clean water; (g) maintenance and repair of all common soil, waste pipes, sewer lines, man-holes, etc.; (h) maintenance of regular staff like manager, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the flats had entered into agreement with the purchasers and as per condition No. 13 of the agreement relating to maintenance of the building and common services (a photocopy of the agreement with one of the purchasers M/s Commercial Automobiles of Jabalpur, who had purchased storage space No. B-6 filed before us) the purchasers were to pay an amount @ Re. 1 per sq. ft. of the area of the flat as so-called security without getting any interest thereon. The term No. 13 of the agreement is in the following terms: "Maintenance of the building and common services 13. Because of their knowledge, experience and technical expertise in maintaining multi-storied buildings and running of common services in such buildings, the promoter hereby appoints M/s Star Estates Management (P) Ltd., 115-Ansal Bhawan, 16-Kasturba Gandhi Marg, New Delhi called SEMPL hereafter or their nominee as service agents for maintenance, upkeep and preservation of the building, operation of common services and management of common areas, SEMPL shall render their services on the terms and conditions and obligations mentioned in the agreement which is being signed separately. The appointment of service agents ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e at New Delhi this 15th Oct., 1980, between M/s Star Estates Management (P) Ltd., 115 Ansal Bhawan, 16, Kasturba Gandhi Marg, New Delhi, called SEMPL hereinafter and M/s Petrochemical Engineering Co. (P) Ltd. Mr. Arya Mittar Sharma S/o Shri P.C. Sharma, Shri Pramod Chandra Sharma, S/o Shri K.C. Sharma, Kumari Indu Sharma D/o Shri K.C. Sharma 303, Jyoti building, 66-Nehru Place, New Delhi, hereinafter called the buyer which expression shall unless it be repugnant to the context or meaning thereof be deemed and include his/her/their or each of their heirs, executors, administrators and assigns. Whereas the buyer has entered into an agreement on 15th Oct., 1980, with M/s Ansal Properties Industries (P) Ltd. 115, Ansal Bhawan, 16-Kasturba Gandhi Marg, New Delhi, hereafter referred to as the promoter under which he has agreed to buy office space No. 1506 on floor 15th in the "Chiranjiv Tower" building at Plot No. 43, Nehru Place, under the terms and conditions set out in the said agreement. And whereas the promoter has entrusted the work of the maintenance, upkeep and preservation of the building, operation of common services therein and management of the common areas thereof to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rs at the rate of 18 per cent per annum. 3. On their part, SEMPL will arrange to get structure of the building insured against fire and if necessary earthquake as soon as the building is occupied. They will maintain the building and keep it in good repair and provide all the services enlisted in sch. II of the agreement between the buyer and the promoter. 4. Both parties to this agreement namely SEMPL and the buyer agree and bind themselves that in case any dispute arises between them such dispute shall be referred to the promoter or its nominee for arbitration whose decision will be binding on both the parties and shall be carried out of them as the final resolution of the said dispute. In witness whereof the parties herein have hereunder signed on the day and year first hereinabove mentioned. Signed, sealed and delivered by The within named M/s Star Estates Management (P) Ltd. in the presence of : for Star Estates Management Private Limited" (iv) Before the AO the assessee claimed the amount of so-called security collected during the year and also the amount collected in respect of the flats and car parking, respectively, towards common assets replacement fund as capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es the assessee tries to avoid legitimate taxes by giving it a facade of refundable deposit, etc. This would have been acceptable if an independent authority, of the association of the owner of the flats had collected these amounts and the assessee had no interest in that association. The same services could have been provided by forming independent association of the flat owners. And most of the people who work straightforward like that but in this case the assessee has collected the amounts under different garbs for the sale of flats only and is trying to avoid tax. Both these amounts are part of sale receipts and are taxable. I see no reason to interfere. Both these grounds of the assessee are rejected." 5.(i) After careful consideration of the facts and circumstances of the case, rival submissions and various agreements placed on record what we have observed is that appellant s plea that the amount collected under the name of so-called "security" was refundable to the flat owners on the sale of the flat to somebody else and, therefore, was not revenue receipt has been found to be misguiding and false claim because, as is evident from the terms and conditions of all the three ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the builder as well as the service agent to camouflage the true nature of the receipt probably with the connivance of flat owners also. Had the parties bona fidely intended or wanted to treat the amount collected from the flat owners, as refundable or transferable then why they omitted the condition relating to the refundability and transferability of that amount from the agreements entered into by the builder as well as by the service agent with the purchasers-cum-owners of the flat? (iii) The condition that the so-called security, which is claimed to have been taken to secure the future payments towards maintenance of the building will be without interest, on one hand and the condition that the flat owners shall pay interest @ 18 per cent in case of default in payments towards maintenance of the building go to show that delayed payments by the flat owners, towards maintenance, were not to be adjusted against so-called security. It is common rule/knowledge that whenever a security is taken to safeguard the future payments, the same is adjusted just on the expiry of the limitation for the payment and there is no question of charging any interest on the delayed payments. The condi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the various Benches of the Tribunal deciding these issues in appellant s own case for the asst. yr. 1983-84 to 1991-92 except asst. yr. 1988-89, are of the opinion that so far as first issue i.e., taxability of so-called security is concerned; the Hon ble Benches have proceeded mainly on the basis of assessee s claim that the said so-called security was refundable based on letter dt. 4th July, 1980, written by M/s Ansal Properties Industries (P) Ltd. appointing the appellant as service agent [we have taken this letter as agreement between the M/s Ansal Properties Industries (P) Ltd. and the Appellant] and completely missed to consider the fact that condition relating to refundability or transferability of the so-called security was missing in the agreement between M/s Ansal Properties Industries (P) Ltd. and buyers of the flats as well as in the agreement between the appellant and the buyers of the flats who had since become the owners. 9.2. Similarly, so far as second issue is concerned the Tribunal has gone by the fact that a part of the amount so collected towards repairs and maintenance of various services, lifts and building, etc. was to be spent towards maintenance o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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