1.  CIT Vs. M/s. J.K.Investors (Bom) Ltd., ITA NO. 1089 Of 2011, DATE: 25/07/2012, High Court of Bombay

Issue:

Whether the Compensation received for   providing   amenities   and   facilities under   separate   agreement   other   than   the rent   agreement   is   chargeable   to   tax   u/s. 22   of   the   Act   as   'Income   from   House Property'   and   not   as   income   from   other sources as assessed by the AO ?

Held:

The test to determine whether the service agreement was different from the rent agreement would be whether the service agreement could stand independently of the rent agreement. In this case the service agreement is dependent upon the rent agreement as in the absence of the rent agreement there could be no service agreement. It may also be pointed out that according to the respondent, the services being provided under the service agreement by the respondent assessee are in the nature of staircase of the building, lift, common entrance, main road leading to the building through the compound, drainage facilities, open space in/around the building, air condition facility etc. These are services, which are not separately provided but go along with the occupation of the property. Therefore, the amounts received as service charges are to be considered as a part of the rent received and subjected to tax under the head 'Income from House Property'.

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2.   NETAPP B V Vs. THE AUTHORITY FOR ADVANCE RULINGS & ORS., W.P.(C) 3959/2012, C.M. APPL. 8300/2012 & 9783/2012, Dated: 14.08.2012, AAR- Delhi

Mere filing of Return of Income disbars an advance ruling application
Facts of the case :

For AY 2009-10, the assessee filed a return on income u/s 139(1) on 31.3.2010. On 17.06.2010, it filed an application before the AAR seeking a ruling in respect of the transactions that had been entered into in that year. The AAR rejected the application on the ground that as the assessee had filed a ROI, the questions raised in the application were “already pending” before an income-tax authority and so the application was not maintainable under the proviso to s. 245R(2). 

Held: 

Upon a return of income being filed, the matter is “pending“, in the sense that the AO has the right to take such steps, including issuance of notice. The rationale for the bar in the Proviso to s. 245R(2) is that if the applicant wishes to plan its affairs and transactions in advance, it is free to do but once it proceeds to file a return, the AAR’s jurisdiction to entertain the application for advance ruling is taken away, because the AO would then be seized of the matter, and would possess a multitude of statutory powers to examine and rule on the return. The fact that in the past the AAR followed a different practice in the past is irrelevant because there is no estoppel against a statute.

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