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TMI Blog1986 (4) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... t to a ground rent, the amount of such ground rent ;" 3. The ITO rejected the assessee's claim. He noted that while the claim for deduction was Rs. 35,420 only a sum of Rs. 11,215 pertained to the previous year. He therefore, restricted the deduction to Rs. 11,215 i.e. he disallowed the claim to the extent of Rs. 24,205. The assessee appealed. 4. The AAC allowed the claim following the ratio of the decision in CIT vs. L. Kuppuswamy Chettiar (1981) 25 CTR (Mad) 315 : (1981) 132 ITR 416 (Mad). In doing so the AAC recorded the finding that the liability for the payment of Rs. 35, 20 arose for the first time during the relevant previous year as evidenced by the order of the Land Development Officer dt. 5th Feb., 1981. The revenue is in ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the lessee on 20th Aug., 1932. Under this perpetual lease agreement Shri B.D. Gupta took over possession of the land in question to hold it in perpetuity as lessee from 25th May, 1927. It is provided in this deed itself that the yearly rent payable in advance would be Rs. 165. Shri Aiyar refers to this condition and submits that the yearly rent or the annual ground rent is a fixed liability to be made each year by the assessee. It has to be paid whether the lessor demands it or not. Shri Aiyar refers to a further stipulation in this lease agreement to the effect that the lessee will from time to time and at all times pay and discharge all rates, taxes, charges and assessments of every description "which are not or may at any time hereafter ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed out (No. 1, Curzon Road, New Delhi). This refers to an earlier letter from the same office dt. 31st Dec., 1980. This letter of 5th Feb., 1981 indicates that the assessee had already paid prior to the beginning of the previous year Rs. 19,935 in excess of what was payable to the L D Office. The letter goes to indicate the liability of the assessee that still had to be met as under: "11. The amount of Govt. dues from 15-7-1978 to 14-1-1981 Rs. 35,420.73 Less amount received in excess as item No. 10 above Rs. 19,935.59 Balance payable Rs. 15,485.14 9. No dispute was raised before us that the demand of Rs. 35,420.73 was made during the relevant previous year under the letter dt. 5th Feb ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and from the departmental authorities. We think that ratio of his case can be extended to the instant case also. Ground rent was fixed under the lease deed at Rs. 165 per annum. There was no need for any demand notices from the authority concerned each year for such a liability. On the other hand the additional ground rent could not have been paid until and unless the assessee received a demand for the same from the authorities concerned. The deduction has to be allowed in full in the year in which such a demand is received. The AAC was therefore, correct in applying the ratio of this decision to the instant case. It was common ground before us that misuse charges here also being for unauthorised construction had to be held to be in the nat ..... X X X X Extracts X X X X X X X X Extracts X X X X
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