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Issues involved:
The issues involved in this case are: 1. Allowance of house tax liability without appreciating the dispute over payment. 2. Claim of property tax not allowable due to non-payment during the relevant year. 3. Reserving the right to amend grounds of appeal. Issue 1: House tax liability allowance The appellant, the Department, challenged the allowance of house tax liability amounting to Rs. 11,40,958/- by the ld. CIT(A), contending that the liability for payment was in dispute. The assessee, a public sector undertaking engaged in business activities, had admitted to a portion of the total house property tax demand raised by the State Trading Corporation (STC). The Assessing Officer (AO) considered the entire amount as disputed and added it back to the income of the assessee. However, the ld. CIT(A) ruled in favor of the assessee, citing a previous order in the assessee's own case for a different assessment year where a similar addition was deleted. The CIT(A) held that the liability was determined and not contingent, thus allowing the expense. The Tribunal upheld the CIT(A)'s decision, emphasizing the consistency in the treatment of the issue. Issue 2: Property tax claim disallowance The Department also contested the claim of property tax amounting to Rs. 7,74,359/-, arguing that it was not allowable as the payment was not made during the relevant assessment year. However, the Tribunal noted that this specific amount was neither a ground of appeal before the CIT(A) nor an addition made by the AO in the assessment order. Consequently, the Tribunal rejected this ground of appeal by the Department. Conclusion: The Tribunal dismissed the appeal filed by the Department, upholding the CIT(A)'s decision to allow the house tax liability and rejecting the challenge on the property tax claim. The Tribunal emphasized the consistency in decisions and the determination of liability in favor of the assessee based on previous orders and the specific circumstances of the case.
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