9911796707
TMI Blog2006 (6) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... cumstances of the case, the Tribunal misdirected itself in law in being (basing?) its conclusions on irrelevant material and in ignoring other essential material on record ?" 2 The reference relates to year 1986-87. 3 Briefly stated the facts giving rise to the present reference are as follows: 4 The applicant is a firm deriving income from property representing godowns at Maliyana as well as from houses in Chiipi Tank and Kaiser ganj. The other income of the applicant-firm is from interest. 5 The applicant disclosed an annual letting value of the property at Maliyana at Rs. 11,95,053. Deduction from this annual letting value was claimed on account of collection charges of Rs. 71,703. This sum comprised of rent collection account of Rs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation to the rival submissions. I do not think there was necessity of 12 employees for collection work. To my mind these employees were engaged by the applicant for over all work connected with the godowns, such as, repairs, maintenance, taxes, banking work etc. The total claim made towards collection charges is Rs. 71,703. The Assessing Officer has already allowed 1/6th towards repairs at Rs. 1,99,175. These employees will be supervising repairs of the godowns also. Supervision/charges of repairs are separately considered then the entire claim of Rs. 71,000 and odd can be said to have been allowed by the Assessing Officer partly against collection charges and partly towards repairs. The allowance of Rs. 30,000 by the Assessing Officer towa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Mahesh Chand [1993] 199 ITR 247 (All). 9 Shri A. N. Mahajan, learned standing counsel, on the other hand, submitted that the tax on rental statement, salary chart and the details of the collection expenditure were filed by the applicant before the assessing authority. No supporting documents were filed and that is why the assessing authority after discussing the entire issue had disallowed the expenditure towards collection charges on the ground that the sum of the expenditure amounting to Rs. 22,417 had been debited in the profit and loss account and did not actually pertain to the collection work. Further, he had urged that the employees engaged by the applicant were not only collecting the rent but were also supervising the repair wor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... collection. The assessing authority is not entitled to make a pure guess but is supposed to make an assessment with reference to the evidence and material on record. It would not be applicable to a case where the only source of income of the applicant is in respect of income from house property. Further, in view of the findings recorded by the authorities including the Tribunal that the employees engaged by the applicant were not exclusively doing the work of collection of rent, the Tribunal, in our opinion, was justified in apportioning the expenditure incurred towards collection charges and towards repairs. 11 Thus, the first question of law referred to us is answered in the affirmative, that is, in favour of the Revenue and against the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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