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TMI Blog2011 (9) TMI 1109X X X X Extracts X X X X X X X X Extracts X X X X ..... g the year. AO noted that while computing the income, the assessee had deducted a sum of ₹ 24,57,281/- on account of property tax. The assessee explained that the property tax related to the construction period. The assessee had collected development/betterment charges from the purchasers which had been offered to tax and, therefore payment on account of tax was required to be allowed as payment of tax was the responsibility of the builder. The purchasers were liable for payment of tax only after taking over the possession of the property. The AO was, however not satisfied by the explanation given. He noted from the sample agreements entered with the purchasers that expenses relating to tax, etc., were to be borne by the purchaser. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cipal taxes paid by the assessee was not the allowability of the assessee and, therefore, the same could not be considered as expenditure for the purpose of business and accordingly he disallowed the claim. In appeal, CIT (A) confirmed the order of the AO aggrieved by which the assessee is in appeal before the Tribunal. 2.1. Before us, the learned AR for the assessee reiterated the submissions made before the lower authorities and submitted that there was no dispute that the assessee had paid the municipal tax which was clear from the details given at page 1 of the paper book. The assessee paid the taxes as per the demand by the BMC and therefore the same was required to be deducted while computing the business income. It was also submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd taxes. Further, clause 32 also provided that purchaser was required to pay to the promoters his/her share in respect of any charges levied or any payments required to made to any Government or local body. It is thus clear that taxes were payable by the purchasers as per the agreement. Any deduction on account of any expenditure can be allowed in case of the assessee, only in respect of the liability incurred by the assessee towards such expenditure. Since the municipal taxes were payable by the purchasers, claim of deduction on this account cannot be allowed in case of the assessee. We, therefore, see no infirmity in the order of the CIT (A) confirming the disallowance and the same is therefore upheld. 3. The second dispute is regardi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty during the relevant year. It was also submitted that there were decisions of the Tribunal in support of the said proposition. The learned DR on the other hand supported the order of the authorities below and placed reliance on the findings given in the respective orders. 3.2. We have perused the records and considered the rival contentions carefully. The dispute is regarding the nature of income earned by the assessee on renting of the space on the terrace of the house property for putting up towers by the Mobile Company. The assessee had treated the rental income as income from the house property whereas the authorities below have assessed the income as business. There is no dispute that the house property under reference was a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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