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TMI Blog2017 (12) TMI 295X X X X Extracts X X X X X X X X Extracts X X X X ..... ettlement of the dispute was rightly taken as compensation for the impairment of the right of more enjoyment. It was also rightly concluded that since the immovable property itself is capital in the hands of the assessee, therefore the right to 'more enjoyment' of this property should also be capital in nature. - Decided against revenue - I.T.A. No. 4776/Mum/2014 - - - Dated:- 1-11-2017 - SHRI SHAMIM YAHYA, AM AND SHRI SANDEEP GOSAIN, JM For The Appellant : Shri V. Vidhyadhar For The Respondent : Shri K. Shivaram ORDER Per Sandeep Gosain, Judicial Member: The present Appeal filed by the revenue is against the order of Commissioner of Income Tax (Appeals)-34, Mumbai dated 15.04.14 for AY 2010-11 on the grounds mentioned herein below:- GROUNDS OF APPEA 1. On the facts and in the circumstances of the case and in law, the Ld. C.I.T. (A) erred in directing the Assessing Officer to allow the claim of deduction of Common Area Maintenance Charges of ₹ 11,36,069/-, while computing the Annual Letting Value ignoring the fact that the said expenses are not allowable u/s 23 while computing the Annual Letting Value. 2. On the facts and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i) wherein it was held that compensation received for probable loss had to be treated as revenue receipt 8. The appellant prays that the order of the CIT(A) be set aside and matter may be decided according to law. The appellant craves leave to amend or alter any ground or add new ground which may be necessary . 2. As per the facts of the present case, the assessee is engaged in the business of financial services. Apart from that the assessee also derived income from house property, capital gain and also from other sources i.e. interest income. The return of income was filed on 15.10.10, declaring total income of the assessee at ₹ 4,27,1,350/-. Subsequently, the case of the assessee was selected for scrutiny and after serving statutory notices and seeking reply of assessee, the AO passed assessment order u/s 143(3) of the I.T. Act, thereby making additions. Aggrieved by the order of AO, assessee preferred appeal before Ld. CIT(A) and Ld. CIT(A) after considering the case of both the parties partly allowed the appeal of the assessee. Now before us, the revenue has preferred the appeal by raising the above grounds. Ground No. 1 TO 3. 3. Since all the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ibunal in case of J.B. Patel Co. (Co-owners) Vrs DCIT (2009) 118 ITD 556 (Ahd) para 5.2 held that What s. 22 attempts to assess is the annual value of the property consisting of any building or land appurtenant thereto, of which the appellant is the owner,, and which has not been put to use for the purposes of its business or profession by it. The rent being charged by the appellant, if so, is only a surrogate measure of the said annual value. The expenditure on the aforesaid items, i.e., the salary (including bonus) to the maintenance staff of the facilities as electric motors, lift, cIaning, etc., as well as that on the electricity consumed in respect of any common area and the electric motors, is not attributable directly to the house property.as such, but to its enjoyment by the tenants/users thereof. In a given case it may well be that the said expenditure is incurred, by the tenant or tenants (collectively), with the landlord having no locus standi or role therein, so that who incurs the same in the first instance, is only a matter of mutual arrangement or convenience and, thus, of no consequence where the bona fides thereof are, as in the present case, not&# ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he appellant in which it was held that held that. maintenance charges and non-occupancy charges paid to the society is to be deducted from the rent received by the Appellant. In view of the above, this ground of appeal is allowed. After having gone through the facts of the present case as well as considering the orders passed by revenue authorities and hearing the parties at length, we find that Ld. CIT(A) while deciding these grounds have taken into consideration the facts of the present case as well as judgments passed by the Coordinate Bench of Hon ble ITAT in the case of Sharmila Tagore Vrs. JCIT wherein it has been held that the maintenance charges and non-occupancy charges paid to the society is to be deducted from the rent received by the assessee. Moreover, no new facts or contrary judgments have been brought on record before us in order to controvert or rebut the findings so recorded by Ld CIT (A). Therefore, there are no reasons for us to interfere into or deviate from the findings recorded by the Ld. CIT (A). Hence, we are of the considered view that the findings so recorded by the Ld. CIT (A) are judicious and are well reasoned. Resultantly, these grounds rais ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s K. Raheja Universal Construction Pvt. Ltd. for developing an iT Park. As per the agreed terms MIs K. Raheja Univeral Construction Pvt. Ltd. had settled the consideration as follows: C. ₹ 4.80 Crs by way of cheque d. 50% of the constructed area to be handed over to M/s S.0 Brothers free-tcost. The 50% of the constructed area was handed over to M/s S C Brothers on 19 March 2008 and as per terms of retirement by agreement dt. 31st Dec 2006 , by which Mr. Yogen Sanghavi had retired from the firm and as per the distribution of the, Assets decided thereon, he was handed over Unit No-202 302 towards his share in the Firm. The firm, (M/s SC Brothers) had paid Capital gain tax on the retirement of the partner. One of the conditions laid down by the Government Of Maharashtra Directorate of Industries Authorities as set out in G.R. dated 03.05.2007, was that the building would be treated as IT Park Building, only if 50% of the total area constructed is utilized for Financial Services and the balance 50% for purpose of I.T. Services. The Local Authority was only concerned about the overall distribution between I.T. Financial Services and unit wise commitment was n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the jurisdictional Bombay High Court in the case of CIT vrs. Abhasbhoy A Dehagamwalla. As per the facts of the present case the AO while dealing with these grounds, was of the view that the compensation has been paid for probable loss of higher rental receipts to be received by letting the said unit to I.T/I.T.E.S firm and therefore the compensation received by the assessee is of revenue in nature. However, the Hon ble Bombay High Court in the case of CIT vrs. Abhasbhoy A Dehagamwalla supported the case of the assessee as by signing the agreement, the assessee has accepted an impairement or injury to its right of more beneficial enjoyment of his own property. Therefore, the Ld. CIT(A) has rightly concluded that the amount of ₹ 81,59,061/- received by the assessee in 'settlement of the dispute was rightly taken as compensation for the impairment of the right of more enjoyment. It was also rightly concluded that since the immovable property itself is capital in the hands of the assessee, therefore the right to 'more enjoyment' of this property should also be capital in nature. Moreover, no new facts or contrary judgments have been brought on record befor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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