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TMI Blog1997 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... ired. The assessee on 15-7-1984 had sent a notice to the FCI for vacating the said property on expiry of the lease. The Manager, FCI had replied by letter dated 25-7-1984 and assured the assessee to vacate the said house as soon as alternative accommodation was available to it. FCI also offered to accept the fresh terms and conditions for rental, if the assessee so desired. The assessee, thereafter, vide letter dated 28th August, 1984 informed the FCI that he was not willing to renew the lease. He further made it clear that, in case the FCI could not vacate the building immediately on expiry of the lease, it would have to pay monthly rent of Rs. 7,280 as a temporary arrangement besides the payment of house tax, water tax and electricity dues. The Assessing Officer and the DCIT (Appeals) have observed that the above offer was apparently accepted by the FCI and the assessee thereafter started submitting the bills at the rate of Rs. 7,280 per month. However, the FCI continued to make the payment at the lesser amount which was earlier being paid by it. This lesser payment was received by the assessee under protest. The assessee subsequently served notice on the FCI demanding the amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to enforce such an agreement. The Court's order finally upheld the validity of the said agreement and enforced payment of rent on that basis. The DCIT (Appeals) had perused the order dated 24-5-1990 of the Addl. District Judge, Moradabad. The Court framed a specific question as to "what has been the rate of rent in respect of the disputed premises ?" The Court held that since, vide his letter dated 28-8-1984, the assessee had categorically conveyed to the FCI that it would be charged enhanced rent at the rate of Rs. 7,280 per month in case the premises were not vacated and since the tenant continued to be in occupation of the building and had not conveyed any dissent, it had accepted the new terms. The Court accordingly held that it shall be deemed that it was a completed contract between the parties and after 31-7-1984, the rate of rent in respect of the premises in question for the period it remained in occupation of the FCI as its tenant was Rs. 7,280. On the basis of the aforesaid findings given by the Addl. District Judge, Moradabad, the DCIT (Appeals) held that enhanced rent started accruing to the appellant immediately after 31-7-1984. He, therefore, confirmed the action of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he income liable to tax under the head income from property is to be processed in accordance with the provisions contained in sections 22 to 27 of the Act. Section 22 of the Act provides that income from the house property to its owner should be computed on the basis of the annual value of the property, which under section 23 as it originally stood, meant the rent for which the property could reasonably be let from year to year. It was notional income that was assessed which was not necessarily the amount which the property actually fetched by way of rent. However, section 23 has been amended with effect from 1-4-1976. The relevant portion of section 23 is reproduced hereunder :--- " Section 23: Annual value how determined : (1) For the purpose of section 22, the annual value of any property shall be deemed to be : (a) the sum for which the property might reasonably be expected to let from year to year; or (b) where the property is let and the annual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable) ? Explanation : For the purpose of this sub-section, "annual rent" means : (a) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is well-settled law that the income-tax authorities or the Court can take into consideration the events and developments which took place after the end of the relevant accounting year but before the final determination of the point in issue by the concerned authority. 12. Even if it is assumed that after expiry of the lease period of 31-7-1984, there was no subsisting contract between the assessee and the tenant, the matter will have to be decided in the light of the relevant provisions contained in Indian Contract Act dealing with quasi-contract. It is an undisputed fact that the assessee gave notice to the tenant before the expiry of the lease for vacating the premises. The tenant replied that it would vacate the premises as soon as other alternative accommodation is found out and they also invited fresh terms from the assessee in respect of the increase in the rent. The assessee conveyed that he is not interested in renewing the lease and in case FCI continued to occupy the rented premises after expiry of the lease, they would have to pay rent of Rs. 7,280 per month. All these evidences existing on records will be relevant for the purpose of determining as to what should be rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the DCIT (Appeals) that the rent receivable will include the rent received in a subsequent year to the extent it relates to the relevant previous year under consideration, and it would be liable to tax under the head 'Income from house property' to the extent it relates to the rent pertaining to those 12 months in the relevant previous year. 15. The judgment relied upon by the learned counsel for the assessee in the case of Ishwari Khaitan Sugar Mills (P.) Ltd. is clearly distinguishable, as in that case, the matter was still sub-judice before the Court and the litigation with regard to payability of extra amount of enhanced price of sugar was subject to the final disposal of the Hon'ble High Court. In the present case, the suit was finally decided and it became clear and certain as to how much amount of rent was receivable in respect of the year under consideration. 16. In view of the aforesaid facts and discussion, and in view of the reasons given in the order of the DCIT (Appeals), I am of the considered opinion that the DCIT (Appeals) has rightly confirmed the action of the Assessing Officer in assessing the ALV of the house at Rs. 87,960 and was also right in confirming the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... net income from plying of the said bus after deduction of certain expenses like salary to driver, conductor, etc. out of the said amount of Rs. 14,400, the assessee claimed further deduction on account of salary, stationery, repairs and depreciation, etc., amounting to Rs. 12,791, and thus the income was shown at net figure of Rs. 1,680. The Assessing Officer observed that the assessee did not furnish details of gross receipts and running expenses such as salary to driver, conductor, etc. The assessee has also not produced any voucher in respect of further expenses claimed. He observed that the Bus No. USL/4725 (1968) model is having capacity of 52 passengers in all and the said bus is plied at Neerpur Sehora route. The distance of this route is 18 kms. Considering the old model of the bus he estimated that the bus might have taken only one trip in the said route which means the bus is plying 36 kms. per day. The fare per passenger was Rs. 3 per seat. The total receipt for 300 days was thus estimated at Rs. 93,600. He granted deduction at the rate of 70 per cent in respect of the entire expenses including depreciation and thereby determined the net income from the said due at Rs. 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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