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Issues involved: Computation of income under the head "Income from house property" u/s.24 of the Income Tax Act.
Summary: 1. The appeal by the assessee, a partnership firm, for the asst. year 2005-06, pertains to the computation of income under "Income from house property." The only issue is the deduction of association maintenance charges of Rs. 1,77,000 claimed by the assessee. The Assessing Officer disallowed the claim, stating it was not allowable u/s.24 of the Income Tax Act. The Commissioner of Income-tax (Appeals) upheld this decision, leading the assessee to appeal before the Tribunal. 2. The assessee argued that the association charges were not claimed as a deduction u/s.24 but u/s.23(1)(b) while computing the annual letting value of the property. They contended that these charges, paid by the property owner, affect the annual letting value of the property. Supporting documents were provided, including bills issued by the apartment owners' Association. The Tribunal noted previous decisions where similar charges were held deductible while estimating the annual letting value of the property u/s.23. 3. After careful consideration, the Tribunal found in favor of the assessee, citing previous Tribunal orders. It was held that the association maintenance charges should be deducted while computing the annual letting value of the property u/s.23, as they impact the property's value. No contrary judgments were presented by the department. Therefore, the Tribunal directed the Assessing Officer to allow the deduction of association maintenance charges. The appeal of the assessee was allowed with no order as to costs. 4. The order was pronounced in the open court on 23.12.2008.
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