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TMI Blog2021 (8) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on continuously in an organized manner with a set purpose and with a view to earn profit and hence those activities were business activities and income arising therefrom was assessable as business income . We do not find any error or infirmity in the findings of the ld. CIT(A). Both the grounds taken by the Revenue are accordingly dismissed. - ITA No. 5300/DEL/2016 - - - Dated:- 27-7-2021 - SHRI N. K. BILLAIYA, ACCOUNTANT MEMBER, AND SHRI K.N. CHARY, JUDICIAL MEMBER Assessee by : Shri Sudesh Garg, Adv Revenue by : Shri Jagdish Singh, Sr. DR ORDER PER N.K. BILLAIYA, ACCOUNTANT MEMBER, With this appeal, the Revenue has challenged the correctness of the order of the CIT(A) - I, New Delhi dated 22.07.2016 pertaining to A.Y 2013-14. 2. The grievances of the Revenue read as under: 1. The Ld. CIT(A) erred in law and facts in directing the Assessing Officer to treat ₹ 2,99,57,551/- being common area maintenance charges as business income for House Property as held by the Assessing Officer. 2. The Ld. CIT(A) erred in law and facts in directing the Assessing Officer to allow lease rental of ₹ 6,47,130/- paid to Noida authority i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to change the character of the income received. (iv) The common area maintenance charges form part of the same agreement, on the basis of which rent had been received. (v) If there are no tenants, from whom the common area maintenance charges would have been received, this means thereby there is full dependence of the common area maintenance charges as income on the income from house property (vi) The stream of income of common area maintenance charges cannot stand on its own. It is fully dependent on the income from house property 7. After referring to various judicial decisions, the Assessing Officer treated the receipt from common area maintenance charges as income from house property . The Assessing Officer disallowed the claim of payment of lease rental to Noida authority amounting to ₹ 6,47,130/-. 8. The assessee assailed the matter before the ld. CIT(A) and vehemently contended that the stand taken by the Assessing Officer is not correct and distinguished the decisions relied upon by the Assessing Officer in reaching his findings. It would be pertinent to extract the submissions made before the ld. CIT(A) which read as under: At the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... let out. 3. The method of calculation of the charges also does not intend to change the character of the income received Method of calculation is relevant as the maintenance charges are for common area and common services. The maintenance charges have not been collected for the area occupied by the tenant but for common area and services which are available to all the tenants as well as their visitors. 4. The common area maintenance charges form part of the same agreement, on the basis of which rent had been received The stand taken by the AO clearly is in favour of the appellant as maintenance charges have been separately defined which are not for the area let out but for the common services. 5. If there are no tenants, from whom the common area maintenance charges would have been received, this means thereby there is full dependence of the common area maintenance charges as income on income from house property Common area maintenance charges has to be borne by all the tenants. It cannot be a ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of using furniture and fixture. In the case of the appellant, rent received is separately offered as income from house property. There were no separate receipts for maintenance of common facilities as in the case of the appellant. 5. CIT vs Indian Metal Metallurgical Corporation (Mad) 215 ITR 424 The company had given on rent along with fixtures and common facilities. In the case of the appellant, rent received Is separately offered as income from house property. There were no separate receipts for maintenance of common facilities as in the case of the appellant. 6. ACIT vs Farida Begum Tazudeen (ITAT, Mad) 63 ITD 298 The assessee let out five storey building on fixed rent after providing amenities like light etc. In the case of the appellant, rent received is separately offered as income from house property. There were no separate receipts for maintenance of common facilities as in the case of the appellant. 7. Neelam Cable Mfg. Co. vs. ACIT (ITAT, Del) 63 ITD 1 The assessee let out property wh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .com 12 b) Indian Metal Metallurgical Corpn 84 Taxmann.com 481 c) Shambu Invesetment Ltd 263 ITR 143 d) K. Bhaskaran Nair 177 Taxmann.com 478 e) Niagara Hotels Builders Pvt Ltd 263 ITR 143 12. Per contra, the ld. counsel for the assessee reiterated was has been stated before the lower authorities. 13. We have given thoughtful consideration to the orders of the authorities below and have also considered the judicial decisions relied upon by both the parties. It is not in dispute that the appellant had agreement with the tenants and in such agreement, there was specific clause in respect of common area maintenance charges and in the agreement it has been specifically mentioned that maintenance charges shall be payable from rent commencement date. 14. In all the cases relied upon by the Assessing Officer/ld. DR, none of the cases had such agreement for maintenance of common area and providing other facilities. In none of the cases relied upon by the ld. DR, no separate expenses were incurred by any of the landlord and none of the cases had mixed income like income from house property and business and profession. 15. The Hon'ble High Court ..... X X X X Extracts X X X X X X X X Extracts X X X X
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