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2013 (7) TMI 723 - AT - Income TaxAllowable deductions under Section 23 & 24 of Income Tax Act,1961 in computing Income from House Property Held that - Relying upon the decision of Kolkata High Court in the case of CIT Vs Sreelekha Banerjee 1988 (12) TMI 53 - CALCUTTA High Court , the legal position that as per the provisions of sections 23 & 24 of the Act, income chargeable under the head income from house property shall be computed after making the deductions of municipal taxes paid by the owner, a sum equal to thirty per cent of annual value and the amount of interest payable on borrowed capital where the property has been constructed, repaired, renewed or re-constructed with borrowed capital - Remaining expenses claimed by the assessee do not qualify for deduction from the ALV of the property as these expenditure are incurred by the assessee are not permissible under the provisions of sections 23 and 24 of the Act Decided against the Assessee. Principle of estopple and res-judicata - Since all similar expenses have been allowed in the earlier years - The assessee is entitled for deduction of all the impugned expenditure this year also Held that - Principle of estoppel or res-judicata is neither applicable against the statute nor against the settled position of law Decided against the Assessee.
Issues:
1. Disallowance of expenditure claimed by the assessee in respect of 'Dada Manzil' property. 2. Disallowance of water tax paid by the assessee to the Municipal Corporation. Issue 1: Disallowance of Expenditure Claimed by the Assessee: The appeal pertains to the disallowance of Rs. 6,13,730/- made by the Assessing Officer (AO) and confirmed by the Ld.CIT(A) regarding the expenditure claimed by the assessee for the 'Dada Manzil' property. The assessee declared a total income of Rs.1,30,24,697/- and claimed various expenses related to the property. However, the AO disallowed a significant portion of the expenses, adding it to the total income as these expenses were deemed not allowable under sections 23 and 24 of the Income Tax Act, 1961. The Ld.AR argued that these expenses were essential for providing utilities and facilities to tenants, citing legal obligations and past precedents. The ITAT considered various legal precedents and held that deductions under sections 23 and 24 are limited to specific expenses like municipal taxes and interest on borrowed capital, and the claimed expenses did not qualify for deduction. The ITAT rejected the argument based on past allowances, stating that principles like estoppel do not apply against the law. Consequently, Ground No 1 was dismissed. Issue 2: Disallowance of Water Tax Paid by the Assessee: The second issue concerns the disallowance of Rs.58,760/- for water tax paid by the assessee to the Municipal Corporation. The ITAT upheld the decision of the Ld.CIT(A) in confirming the disallowance, as this expenditure also did not qualify for deduction under the relevant provisions of the Income Tax Act. The ITAT reasoned that since the expenditure did not fall within the permissible deductions outlined in sections 23 and 24, the disallowance was justified. Therefore, Ground No 2 was also dismissed. Consequential Issues: Grounds No 3 & 4 were deemed consequential and did not require separate adjudication, leading to their dismissal without further discussion. In conclusion, the ITAT Mumbai dismissed the appeal filed by the assessee, upholding the disallowances made by the AO and confirmed by the Ld.CIT(A) regarding the claimed expenditures for the 'Dada Manzil' property. The judgment emphasized the limited scope of deductions permissible under sections 23 and 24 of the Income Tax Act, highlighting the specific expenses that qualify for deduction in computing income from house property. The decision was based on a thorough analysis of legal precedents and the statutory provisions governing such deductions.
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