Case Law Details
Shambala Properties Pvt. Ltd. Vs ACIT (ITAT Bangalore)
The assessee is owning a building and is in the business of real estate development. The assessee declared income from house property and income from other sources. The Learned Assessing officer has completed the assessment at a total income of Rs. 1,16,64,440/- as against the declared income of Rs. 73,17,890/-. The AO has taxed the entire rent received from the tenants under Income from House Property overlooking the fact that it was a composite rent towards the lease of the premises and for providing host of services by the assessee. The AO has not reduced the Service tax amounting to Rs. 17,33,877/- which is included in the rent received from the tenants by holding that as per the terms and conditions of leased deeds, the lessee shall pay the service tax. No doubt it is the lessees who have to pay the service tax but it is the responsibility of the lessor to collect the same and remit it to the Central Govt as per the provisions of Service Tax Act, this aspect has been completely overlooked/ignored by the AO. Hence the Service tax collected by the appellant amounting to Rs. 17,33,877/- requires to be reduced from the rent received.
ITAT held that we incline to remit the issue in dispute to the file of AO to reframe the assessment in the light of direction given by the Tribunal in its order for the Assessment Year 2009-10.
FULL TEXT OF THE ITAT JUDGEMENT
This appeal is by the assessee directed against the order of CIT(A) dated 24.03.2017. The assessee raised the following grounds:
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