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TMI Blog2012 (8) TMI 455X X X X Extracts X X X X X X X X Extracts X X X X ..... roject - receipts on account of rent, maintenance charges and sale of scrap - Held that:- In the absence of any nexus in respect of rent from tenants and scrap sales of the project the ld. CIT(A) was not justified in treating the same as part of the work-in-progress thus accordingly the rent from tenants and scrap sales are to be treated as income of the year under consideration - against assessee. - I.T.A. No.2653/M/2011 - - - Dated:- 29-6-2012 - SHRI DINESH KUMAR AGARWAL, AND SHRI N.K. BILLAIYA, JJ. Appellant by : Shri Sunder Singh Respondent by : Shri Ratan Samal O R D E R PER DINESH KUMAR AGARWAL : This appeal preferred by the Revenue is directed against the order dated 31-01-2011 passed by the Ld. CIT(A) for the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above receipts. It was stated by the assessee that the staff was specifically entrusted with the work related to matter of National Sports Club of India and the expenses have been debited on estimated basis. However, the A.O. did not accept the assessee s explanation for the reason that the consultancy work was entrusted to the regular staff of the assessee firm and the quantum of expenses incurred towards the consultancy work is not determinable and accordingly the A.O. estimated Rs. 2 lacs and disallowed balance expenses of Rs. 8,87,788/- by enhancing the work in progress. Therefore, the A.O. treat the consultancy receipts and other income of Rs. 13,48,000/- as income from other sources. On appeal the ld. CIT(A) while observing that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dental to development activity of the uncompleted project. (ii) While doing so, the ld. CIT(A) has failed to appreciate that the receipts on account of rent, maintenance charges and sale of scrap cannot be said to be incidental to development activity but was income assessable as Income from Other Sources. 10. Brief facts of the above issue are that the A.O. observed that the assessee has received income of Rs.5,44,383/- being legal charges, registration charges, electric water meter, sundry expenses, rent received, maintenance charges and scrap sale proceeds and the same has been adjusted against the work-in-progress. On being asked as to why the same should not be treated as income for the year under consideration as it has nothing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y exp. 97,500 Rent from tenants 1,45,963 Maintenance charges (Laxmi Krupa Society) 60,000 Scrap Sale of Laxmiwadi Project 1,79,920 5,44,383 ========== Before the ld. CIT(A) it was submitted that legal charges, electric charges, registration charges and maintenance charges etc. are received from some tenants of the same projects and reduced from work-in-progress amount as the corresponding expenses incurred are shown in the respective account head and are debited to work-in-progress account. The ld. CIT(A) has accepted the plea of the assessee on the ground that there is no element of income in the receipts and the same is incidental to the development activity of ..... X X X X Extracts X X X X X X X X Extracts X X X X
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