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TMI Blog2016 (6) TMI 246X X X X Extracts X X X X X X X X Extracts X X X X ..... office space sold during the year was not actually owned by the assessee. The transaction has actually taken place between M/s. SCM Microsystems (India) P. Ltd. and M/s. Data Telesis Pvt. Ltd. Though the assessee is not involved in the sale of office space, still the sinking fund is collected by the assessee from the buyer. This does not a part of the sale consideration received by the assessee so as to be treated as capital receipt and to grant deduction under section 80-IA of the Act. Thus the transaction is in the nature of charging fees from owners for providing various types of services in the form of maintenance of various routine services and maintenance of the building, consequently, all within the ambit of trading activities, n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eduction to these receipts in his assessment orders. Hence, the Commissioner of Income-tax invoked the provisions of section 263 of the Act so as to give direction to the Assessing Officer to consider this receipt as revenue receipt and re-frame the assessment. Against this the assessee is in appeal before us. 3. Before us, the learned authorised representative submitted that sinking fund is collected at 1.5 per cent. of the sale value from the owner occupants to whom assessee sold space in earlier years for meeting the expenditure on common facilities used by the co-owners. Further, the learned authorised representative submitted that sinking fund is capital in nature as the space is sold along with structural, electronic and electrical ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ceipt in view of the judgment of the Bombay High Court in the case of M. Visvesvaraya, Industrial Research and Development Centre v. CIT [2012] 26 taxmann.com 200 (Bom) wherein held that : (a) The mere use of the term 'sinking fund' and the manner in which the assessee treats the same in its accounts is not decisive of the matter. (b) The amount lying in the 'sinking fund' is to be used for discharging the assessee's obligations under the lease agreements. The assessee had complete control over these funds. It was entitled to determine the quantum thereof although the basis is provided under the agreement. (c) The funds were, in fact used and in any event, are admittedly to be used in respect of the said facili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted by the Department in earlier years, cannot be treated as capital receipt when there is no change in facts or law during the current assessment year. 5.3 Further, the learned authorised representative submitted that even if it is considered as a revenue receipt, the sinking fund collection is part of the sale consideration of property and thereby the assessee is entitled for deduction under section 80-IA of the Act. First of all, in the assessment order there was no discussion whatsoever by the Assessing Officer on the issue relating to sinking fund. There is no application of mind or any enquiry by the Assessing Officer on this issue. Being so, in our opinion, the assumption of jurisdiction under section 263 of the Act is justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X
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