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TMI Blog2017 (5) TMI 111X X X X Extracts X X X X X X X X Extracts X X X X ..... ties while computing ALV. Disallowance of deduction of society charges of ₹ 2,92,615/- from rental income u/s 23 of the Act - Held that: - from the order of the Coordinate Bench in Assessee’s own case in ITA Nos.7210/Mum/2007 & 3552/Mum/2009 for the assessment years 2002-03 & 2006-07 that this issue has been restored back to the file of the Assessing Officer for necessary verification and deciding the issue afresh - issue restored to the file of the Assessing Officer for fresh adjudication. Appeal allowed by way of remand. - ITA NO.3117/MUM/2015, ITA NO.3118/MUM/2015, ITA NO.3596/MUM/2015 - - - Dated:- 26-4-2017 - SHRI C.N. PRASAD, JUDICIAL MEMBER AND SHRI ASHWANI TANEJA, ACCOUNTANT MEMBER For The Assessee : Shri Vimal P ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit should be considered as reasonable percentage of interest and this should be added to the rental value of the property for arriving at Annual Letting Value of the property. The Ld. CIT (Appeals) deleted the addition made to the rental value following the decision of the Hon ble Bombay High Court in the case of CIT Vs. Tip Top Typography [48 taxmann.com 191]. 4. The Ld. DR vehemently submits that the Assessee has shown the rental value less and Assessee has received interest free rental deposit to the tune of ₹ 3.5 crores, therefore, the Assessing Officer is justified in assessing 10% of the deposit as notional interest from the interest free deposit as ALV apart from the rental income. 5. The Ld. Counsel for the Assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... [2011] 10 taxmann.com 195(Delhi) (FB) iii) CIT Vs. Satya Co. Ltd (1994) 75 Taxman 193 (Cal.) iii) CIT Vs. J K Investors (Bombay) Ltd (2000) 248 ITR 723 (Bom.) 9.2 I have considered the submission of the Authorised Representative and the order of the Assessing Officer as well as the case laws cited by the Authorised Representative. It is seen that the total rental income received by the assessee in respect of the impugned properties is ₹ 1,16,10,000/- per annum and the assessee has received interest free security deposit of ₹ 72,00,000/-. From these figures, it is clear that the amount of security deposit is not disproportionately higher compared to the rent received by the assessee. It is equivalent of approx 7.5 month ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r receivable under section 23(1)(b) of I.T.Act. Therefore respectfully following the decision of the jurisdictional High Court we hold that notional interest should not form part of annual value. This ground of the revenue is rejected. Respectfully following the said decisions, we affirm the order of the Ld. CIT (Appeals) on this issue. Grounds raised by the Revenue are dismissed. 7. The only ground left for adjudication in the Assessee s appeal for the assessment year 2002-03 in ITA No.3596/Mum/2015 is regarding disallowance of deduction of society charges of ₹ 2,92,615/- from rental income u/s 23 of the Act. 8. The Assessing Officer while completing the assessment rejected the claim of the Assessee for allowing society ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had disallowed the same holding that there was no business in existence and therefore the expenses could not be allowed. Aggrieved by the decision of the CIT(A), the assessee is in appeal before the tribunal. 2.2.1 We have heard both the parties, perused the records and considered the matter carefully. The dispute is regarding allowability of expenditure on account of maintenance charges paid by the assessee to society as an owner of the flat in the society. We have already held that the rental income from flat has to be assessed as income from house property. The income under the head house property is assessed in respect of bonafide letting out value of the property and not any income from any other services. Therefore in case, as p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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