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TMI Blog2001 (4) TMI 185X X X X Extracts X X X X X X X X Extracts X X X X ..... fly the facts of the case are that vide agreement of lease dt. 14th Sept., 1961, the assessee was allotted a piece of land situated at Plot No. 5 in Hardings Bridge, New Delhi for construction of building for newspaper press along with reasonable number of residential quarters for staff. Clause-XIII of the agreement also provided that the said land cannot be used for any purpose other than mentioned in the agreement. Clause-XIX provides if the assessee commits any breach or makes default in the performance, the L DO could retain the possession of such land. Clause-XX of the agreement also provided that L DO may order re-entry of the assessee to the said piece of land on certain conditions. Subsequently, the L DO came to know that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he premises, one has to see whether the liability was in the nature of ground rent, whether the liability was ascertained and whether the assessee will be entitled to deduction even if the payment to L DO has not been made. It was argued that s. 24 of the Act allows deduction in respect of expenditure incurred on repairs, interest on borrowed funds for construction of property, annual charges, ground rent, vacancy allowance, etc. against the income from house property. Clause (v) of s. 24(1) allows deduction for ground rent where the property is subject to a ground rent. Hon ble Delhi High Court in the case of P.N. Sikand vs. CIT (1981) 24 CTR (Del) 25 : (1981) 131 ITR 9 (Del) has explained as to what was the ground rent. In this case also, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee, the Delhi Bench of the Tribunal vide its order dt.18th July, 1996in WTA No. 931/D/91 has observed as under: "The CIT(A) observed that since the liability has not been admitted by the assessee and it is under challenge, the action of the AO of disallowing the said deduction in respect of the said liability was perfectly justified. We do not agree with the view so taken by the CIT(A). If the liability has already been created against the assessee by a statutory authority in accordance with the provisions of the relevant law, it is an accrued liability. Such a liability will cease to exist only if it is subsequently cancelled or reduced by the competent appellate authority." The learned counsel therefore argued that the AO/CIT(A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... learned counsel supported the order of the CIT(A). 8. We have considered the rival submissions. The facts of the case have been mentioned above. Similar issue was considered by the Delhi High Court in the case of P.N. Sikand. In that case also, the agreement with the L DO was similar to that of assessee. Similar breach of misuse of the premises was noticed by the L DO for which he asked the assessee to make certain payments for regularisation. The only difference between the case of P.N. Sikand and the assessee was that in the case of P.N. Sikand, the assessee made the payment to L DO who also regularised it. In the case of the assessee such levy has been challenged and as the payment of L DO has not been made, it has not regularised it. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ility has to be treated as ascertained liability. We have also perused various deductions which are available to the assessee against the income from house property. Clause (i) of s. 24(1) allows deduction for repairs and collection of rent even if the assessee has not incurred any expenditure. But cl. (ii) provides for deduction in respect of any premium to insure the property against the risk of damage or destruction which has actually been paid by the assessee. The other deductions mentioned in cls. (iv), (v) and (vi) are available even if they have not been paid by the assessee. But again, cl. (vii) of s. 24(1) allows deduction on account of land revenue or any tax levied by the State Government only if such amount was paid. The statute ..... X X X X Extracts X X X X X X X X Extracts X X X X
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