9911796707
TMI Blog2005 (4) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... ommon order. The substantive ground reads as follows : "I. The CIT(A) XXXII has erred in :-- (i )confirming the treatment given by the Asstt. Commissioner of Income-tax, Special Circle 81(1), Mumbai to the payment of Rs. 2,37,370 (Smt. K.D. Ambani Rs. 1,69,212) made by the tenant on behalf of the appellant, as the income of the appellant and thereby confirming the income from property at Rs. 2,31,997 (Smt. K.D. Ambani Rs. 1,77,282 as against the income of Rs. 48,000 (Smt. K.D. Ambani Rs. 48,000) shown in the return of income. (ii)Disregarding the clear provisions of section 23(1)(b) of the Income-tax Act, 1961, which defines rent as under :- The annual value of the property shall be : (a )the sum for which property might reasonably be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Contribution for plumbing, rectification, painting and structural repairs 3,868 2. Pest treatment charges 5,144 3. Repair Fund 18,100 4. Special contribution to structural repair as per resolution passed to special general body meeting held on 15-3-1990 60,000 5. Terrace water proofing 4,000 6. External Plaster and gunting work 5,000 7. Additional Water Benefit charge 34,200 8. Sinking Fund 3,304 9. Non-occupancy charge 60,000 10. Mis. Charges 2,900 11. Other outgoings 33,480 12. Taxes 7,374 Total 2,37,370 (Figures as per the file of Shri Mukesh D. Ambani) Further the Assessing Officer has observed that the bills were in the name of the appellant, however, the payments were made by the sub-tenant. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f IT Act : Rs. 57,999 For repairs = 1/5th of ALV Income from house property as determined : Rs. 2,31,997 Less : Income from house property as returned : Rs. 48,000 Difference by which returned income needs to be increased : Rs. 1,83,997 (Figures as per file of Shri Mukesh D. Ambani) 3. Being aggrieved the issue was carried before the first appellate authority and after reiterating the facts as referred hereinabove ld. CIT(A) has concluded that the reimbursement incurred by the licensee on behalf of the licensor were nothing but indirect rent paid by the licensee to the licensor. According to him as well for the purpose of calculating any rent received or receivable as per the provisions of section 23(1)(b) have to be considered h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... able in the hands of the owner in terms of section 23(1)(b) of IT Act. Clause (2) of the agreement provides that the licensee shall be fully responsible for maintaining the said premises without being the licensor i.e., the appellant to cost on this account. Clause (8) has also revealed that during the period of licence the licensee shall bear or reimburse to the licensor the proportionate share in respect of the monthly outgoings payable in respect of the said premises including water and maintenance charges. In the light of these specific clauses of the agreement we have examined the provisions of section 23(1)(b) alongwith Explanation 1 of the said section this section provides the method for determination of annual value of property. Th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xpense can be treated as an income has also not been clarified by the revenue authorities. From the clauses it can be observed that the licensee had paid the said amount against or raised by the society though in the name of the owners. The Assessing Officer has not raised any doubt in respect of the genuineness of the bills raised. In support of the claim few case laws have also been cited. In the case of CIT v. Sathya Co. 125 Taxation 136 (Cal.), copy of the order filed, it was held that no notional interest could be added to calculate the rental income and it was also held that the presumption of Assessing Officer that the notional interest as integral part of rent was ultra vires the provisions of section 23 of IT Act. In an another dec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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