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TMI Blog2016 (9) TMI 1198X X X X Extracts X X X X X X X X Extracts X X X X ..... be added to the rent agreed to be paid. However, if the maintenance charges etc. are stipulated to be payable by the licencee or the lessor it must form a part of the rent for the purpose of computing the annual value of the property. A view to the contrary would enable a party to undervalue the annual value of the property for the purpose of section 23 by the simple expedient of providing for the payment of the maintenance charges etc. and the rent separately. The maintenance charges must be included as part of the rent for the purpose of computing the annual value of the property. The assessee is not prejudiced thereby in any event. We are informed that the amounts received under the sub-sub-licencee had been brought under the head “Income from house property”. Section 24 provides that the income chargeable under the head “Income from house property” shall be computed after making the deductions specified therein. Under clause (a) of Section 24, a sum equal to thirty percent of the annual value is liable to be deducted. The assessee has, therefore, the benefit of deductions under section 24 as well as under the proviso to section 23 of the Act. - Decided against the assesse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Demised Premises; and (ii) The passenger lifts, provided that nothing greater in weights and bulk other than handbags, brief case and attached cases shall be taken into passenger lifts; and the Sub-Sub-Licencee paying and yielding therefore unto the Sub-Licencee during the said period of terms:- (a) Rent in respect of the Demised Premises calculated @ ₹ 40/- (Rupees Forty only) per sq. ft. (Super Area) total monthly rent is ₹ 14,680/- (Rupees Fourteen thousand six hundred eighty only) of the area comprised in the Demised Premises, the said rent be paid quarterly in advance. The first payment, however, will be for two months (May June, 2000). (b) In addition to the monthly rent, monthly and proportionately for any part of the month, all maintenance charges payable to the Builders, M/s Bharat Hotels Limited, as per their current bills in respect of the Demised Premises. Presently the maintenance charges fixed by the Builders are ₹ 14.22 (Rupees fourteen and paisa twenty two only) per sq. ft. per month. All reasonable and future enhancements, if any, will also be to the Sub-Sub-Licencee account. Any abnormal increase will be to the Sub-Licencee account. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 22. The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property as he may occupy for the purposes of any business or profession carried on by him the profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head Income from house property . Annual value how determined. 23. (1) For the purposes of section 22, the annual value of any property shall be deemed to be- ( a ) the sum for which the property might reasonably be expected to let from year to year; or ( b ) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause ( a ), the amount so received or receivable; or ( c ) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause ( a ), the amount so received or receivable : Provided that the taxes levied by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the property of that previous year in which such taxes are actually paid by the assessee. Thus if the taxes are not paid they cannot be deducted. In that event they remain included in the annual value of the property. The proviso does not include the maintenance charges paid by the assessee. 10. If the maintenance charges are not included in the rent, it would enable an assessee to avoid paying tax on the true annual value of the property. Under section 23(1) for the purpose of section 22 the annual value of the property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year. The amount of rent would also be dependent upon the common facilities of a building. The better the facilities, qualitatively and or quantitatively, the higher the rent. It can hardly be suggested that the annual value of a property which provides several common amenities such as a swimming pool, gymnasium, security car, parking and elevators would be the same as the annual value of a property in the same area but without these facilities. The actual rent received would be much higher where the facilities are better. Section 23 provides that the annual ..... X X X X Extracts X X X X X X X X Extracts X X X X
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