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TMI Blog2013 (11) TMI 935X X X X Extracts X X X X X X X X Extracts X X X X ..... eceipt/ reimbursement - it cannot be stated that maintenance or cleaning of walls by application of primer coat was the responsibility of M/s Deesha for advertisement so displayed. The affairs are so arranged that the cost to be incurred by the society for their regular maintenance was borne by the said company and receipts were bifurcated into two agreements - scaffolding and the painting expenditure is part of the maintenance of the building and no way connected with the advertisement provided to M/s Deesha. The security watch and ward etc, as claimed by assessee is part of its regular activity of the society and just because an agreement was entered into by arranging the affairs in such a manner, the claim of expenditure which has no relevance for earning the advertisement amounts. This cannot be allowed under section 37(1) or section 57. Moreover as seen from the above, painting expenditure itself was spent over a period of two years, whereas the advertisement was only for a period of two months - Decided against assessee. - ITA No.3758/Mum/2011 - - - Dated:- 15-3-2013 - B Ramakotaiah and Amit Shukla, JJ. For the Appellant : Shri Haresh P Shah For the Respondent : Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd (a) round the clock security watch and ward (b) area maintenance (c) access charges and (d) storage charges for storing material, accessories etc pertaining to the advertisement hoarding of M/s Deesha Leasecon Pvt. Ltd. For the above said services, M/s Deesha Leasecon Pvt. Ltd was to pay an amount of Rs.7,00,000 p.m. as per the following terms of the contract: It is understood and accepted by the parties hereto that the society will incur additional expenses for providing the aforesaid services to Deesha. The Society has also represented to Deesha that while supervising the maintenance services some and/or all the members of the Managing Committee will be investing their time and efforts and therefore the society and/or the managing Committee should be compensated. In lieu of the above, it is agreed that Deesha shall be liable to pay the Society monthly maintenance charges/compensation of Rs.7,00,000 (Rupees Seven lacs only) exclusively (except Income Tax) of all the taxes, levies and/or impositions as may be payable to the concerned authorities). The said monthly maintenance charges/compensation (hereinafter referred to as the said charges) shall be payable in Advance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of scaffolding and painting. Further, as agreed M/s Deesha Leasecon Pvt. Ltd shall undertake the installation and/or wrap at its own costs, charges and expenses. Nowhere it is mentioned in the said agreement M/s Deesha Leasecon Pvt. Ltd had to incur expenditure on erection of scaffolding covering area of 16000 sft. And two layers of painting on the society s building. To keep the society s premises upto date assessee society has to incur such expenditure in the normal course . 4. Before the CIT (A) during the proceedings assessee submitted that: In this regard it is pertinent to point out, with reference to the clause I of the First Agreement relating to Display Charges at Page 11, page 2 of the agreement, that there was clear stipulation with regard to the expenses for construction of scaffolding. Your honour may appreciate that the stipulation categorically indicates that such work shall be undertaken by the Appellant at it s own cost, charges and expenses. In view of the above, it is respectfully submitted that Rs.14,00,000 were paid by Deesha was towards specific performance and it was a prerequisite condition incidental to the receipt of stipulated Display charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... id amount from M/s.Deesha, the issues under consideration are (a) whether these services were provided by the appellant in addition to and exclusive to that of the normal services provided by the appellant to its members in its day to day operations. (b)what was the cost incurred by the appellant for rendering the services and whether there was any surplus in this regard. Having regard to the fact that the appellant has been maintaining its own round the clock security, area maintenance etc. for the existing building and for the safety of its members, it is nothing but natural that the services supposed to be provided to M/s.Deesha are covered in the existing services. The appellant was not able to furnish any details that it has incurred additional man power/ materials/expenses for rendering services to M/s.Deesha. Apparently, no such separate accounts have been maintained. In view of the same, I am of the considered opinion that the appellant has not indulged in any addition work or additional cost in respect of the services provided to M/s Deesha by assessee. Secondly the Authorized Representative has taken the argument that as per the agreement M/s Deesha was to contribute towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which has no relation with the benefit derived by M/s Deesha. In view of the aforesaid discussion, the appellant's effort to rely upon the agreement which was prepared to suit for its convenience is nothing but a sham agreement to camflouge the income arising out of the advertisement charges received by the appellant with an intention to avoid the tax thereon. Therefore, In my considered opinion the appellant's submissions in this regard cannot be accepted and accordingly I uphold the addition made by the A.O. that the entire amount of Rs.15 lakhs received from M/s Deesha shall constitute appellant s income under the head income from other sources . 6. The learned Counsel before us referred to the facts on record and also various agreements and referred to the paper book from Page 1 to 56. He reiterated the submissions made before AO and CIY(A). The learned DR however, relied on the orders of AO and the CIT (A). 7. We have considered the rival submissions and perused the documents placed on record. After considering the same, we agree with the order of the CIT (A). As seen from the documents placed on record the Municipal Corporation of Greater Mumbai has permitted to display t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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