Case Law Details
Premkumar Menon Vs ACIT (ITAT Chennai)
Conclusion: Once the maintenance charges were attributable to the letting out services provided, the same derived from providing services was to be considered under the head “income from other sources” and not “income from house property”.
Held: AO considered the maintenance charges as received by the assessee from the premise of the rent agreement as “income from house property” and assessed the same u/s. 24 of the Income Tax Act. On appeal, CIT (A) confirmed the action of the AO in making the addition of maintenance charges received on let out property amounting to Rs. 37,98,900/- as assessable under the head “income from house property” as against claimed by assessee under the head “income from other sources”. It was held that services provided for the charge of maintenance charges was clearly distinguishable from the rental receipt for renting out the portion of the property and it was for only providing services. Once, these maintenance charges were attributable to the services provided, the same derived from providing services was to be considered under the head “income from other sources” as claimed by the assessee.
FULL TEXT OF THE ORDER OF ITAT CHENNAI
This appeal by the assessee is arising out of the order of Commissioner of Income Tax (Appeals)-5, Chennai, in ITA No.75/CIT(A)-5/2018-19 dated 05.09.2019 for the Assessment Year 2016-17. The Assessment was framed by Asst. Commissioner of Income Tax, Non Corporate Circle-17(1), Chennai u/s. 143(3) of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order dated 29.12.2018.
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