Case Law Details
DCIT Vs Jagatjit Industries Ltd. (ITAT Delhi)
The issue under consideration is whether the maintenance service charges is charged under head income from house property along with rent?
While concluding the assessment proceedings against the assessee observed that the maintenance charges received in relation to the property should be regarded as part of the composite rent for computing the income taxable under the head ‘income from house property’ and no further deduction towards repairs and maintenance expenses actually incurred should be allowed.
If there is a composite agreement in respect of building and amenities and if the services provided are separable then the income derived from the amenities can be treated as income from other sources. As per ITAT’s opinion that only the rental income should be charged to tax under income from house property after allowing deductions in respect of the Municipal taxes paid and of the 30% standard statutory deduction u/s 24(a) of the Act. On the other hand, the income from maintenance services should be brought to tax under income from other sources after allowing benefit of deduction towards expenditure incurred on maintenance charges. Accordingly, ITAT set aside the order of the Ld. CIT (A) and direct the Assessing Officer to charge only the rental income under income from house property and allow the statutory permissible deductions there from.
FULL TEXT OF THE ITAT JUDGEMENT
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