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TMI Blog2012 (10) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... building including the provision of lift, cleaning of common areas etc. provided by the assessee to the occupants of the flat. Thus, it is the assessee's argument that while determining the rent receipt by it from the tenant, the amount of Rs. 22,888/- should have been excluded from the gross amount of the rent received by the assessee since it was only reimbursement of the utility charges paid by the assessee to the society on behalf of the tenant for the services enjoyed by the tenant. Thus the view adopted by the CIT (A) is cogent one to allow the deduction of Rs. 22,888/- while computing the netted ALV of the house - in favour of the assessee. - IT APPEAL NO. 827 (DELhi) OF 2012 - - - Dated:- 31-8-2012 - SHAMIM YAHYA AND C.M. GARG, JJ. Pirthi Lal for the Appellant. Sunil Goel and Suhel Goel for the Respondent. ORDER Shamim Yahya, Accountant Member - This appeal by the Revenue is directed against the order of the Ld. Commissioner of Income Tax (Appeals)-XXIX, New Delhi dated 14.10.2011 pertaining to assessment year 2008-09. 2. The grounds raised read as under:- "(i) On the facts and in the circumstances of the case, the Ld. Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t the same issue was considered by the Ld. Commissioner of Income Tax (A) in assessee's own appeals for assessment years 2006-07 2007-08 and the appeals were allowed in this regard. While allowing the relief to the assessee, the Ld. Commissioner of Income Tax (A) in this regard referred to Circular No. 734 dated 24.1.1996 issued by the CBDT, wherein it was clarified as under:- "2. The Board in its Circular No. 728 (F.No. 500/12/95-FTD) dated 30.10.1995 have already clarified that in case of a remittance to a country with which a Double Taxation Avoidance Agreement is in force, tax should be deducted at the rates provided in the Finance Act of the relevant year or at the rates provided in the DTAA, whichever is more beneficial to the assessee. 3. Once again it is clarified that in respect of payments to be made to the Non-resident Indians at UAE, tax at source must be deducted at the following rates: (ii) Interest - (b) 12 % of the gross amount of the interest in all other cases." 5. Considering the above, Ld. Commissioner of Income Tax (A) held that wordings of the circular are clear and unambiguous. In case of Non-resident Indians at UAE, tax on interest income is requ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer in the assessment order, submissions of the appellant and the various decisions relied upon by the appellant. The issue has been dealt with extensively by the AAR in its various orders. Two AAR rulings are in favour of the department. In the case of Cyril Eugene Pereira (239 ITR 650) it was held that as individuals do not pay tax in the UAE, the applicant Cyril Pereira was not a tax resident of the UAE and was not entitled to the beneficial provisions of the India-UAE tax treaty. In the case of Abdul Razak Memam, (146 Taxman 115) the AAR held that investors of the UAE have to pay Capital Gains tax on their investments in India. The AAR was of the view that DTAA between India and the UAE was not useful for the purpose since UAE does not have a tax regime. Two of the AAR's rulings i.e. in the case of M.A. Rafique and Emirate Fertilizers Trading are in favour of the appellant. In M.A. Rafique (213 ITR 317), dated 23.12.1994, the AAR held that the applicant was eligible to the benefits of the India-UAE tax treaty and that the capital gains would not be subject to tax in India. The AAR observed - "That though there was no income tax or wealth tax on individuals in any of the UAE ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax (A) noted that the order of his predecessor in Mustaq Ahmed Vakil has been upheld by the ITAT, Delhi vide order dated 24.9.2010 in I.T.A. Nos. 3424, 3425, 3426/Del/2010 by holding as under:- "The Ld. Commissioner of Income Tax (A) has also followed the order of the Tribunal in the case of Green Emirate Shipping Travels referred to above. Respectfully following the order of the Tribunal in the case of Ramesh Kumar Goenka, we do not find any reason to interfere in the order of Ld. Commissioner of Income Tax (A). All the three appeals filed by the Revenue are dismissed." 11. Considering the above, Ld. Commissioner of Income Tax (A) noted that it is not in dispute that the facts of the case are squarely covered by the ratio of decision of ITAT in the case of Mustaq Ahmed Vakil. Ld. Commissioner of Income Tax (A) further noted that the provisions of amended treaty are applicable in respect of income arising on or after 1.4.2008. Therefore, Ld. Commissioner of Income Tax (A) considered the precedent and held that benefit of Indo UAE Treaty is available to the assessee and Short Term Capital Gains derived by him for shares/securities in India were not taxable in India i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income Tax (A) held that he agreed with the assessee that amount of service charges received by the assessee from the tenant should be netted, i.e. the rent received by the assessee from the tenant should be arrived at after reducing the amount of Rs. 22,888/-, being the reimbursement of service charges paid to the society by the assessee on behalf of the tenant for the services such as provision of lift, cleaning of commons areas etc., enjoyed by the tenant. Ld. Commissioner of Income Tax (A) further observed that the identical issue was considered by his predecessor in assessee's own appeal in assessment year 2007-08 and the issue was decided in favour of the assessee and it was held that services charges were not required to be reduced from the gross receipt received by the assessee arriving at the ALV. Considering the above Ld. Commissioner of Income Tax (A) held that the Assessing Officer is directed to allow the deduction of Rs. 22,888/- while computing the netted ALV of the house. 16. Against the above order the Revenue is in appeal before us. 17. We have heard the rival contentions in light of the material produced and precedent relied upon. We find that as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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