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TMI Blog2022 (4) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome of Rs. 13,94,91,797/-. The scrutiny assessment u/s. 143(3) was completed on 25.02.2015 and total income was assessed at Rs. 14,06,08,400/-. Subsequently, the proceedings u/s. 147 of the Act was initiated by issuing of notice u/s. 148 of the Act. The case was reopened on the reason that assessee has claimed expenses of Rs. 49,02,455/- towards maintenance charges apart from claiming deduction u/s. 24(a) of the Act. Therefore, assessing officer stated that the income chargeable to tax has escaped assessment to the extent of Rs. 49,02,455/- in the case of the assessee within the meaning of Sec. 147 of the I.T. Act, 1961. Therefore, the Assessing Officer held that neither Sec. 23 nor Sec. 24 provides for the deduction of expenses incurred ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has to be allowed in addition to the deduction u/s. 24 of the Act as these are society maintenance charges, which are mandatorily incurred irrespective of the property let out or vacant. The Ld. AR explained the reasons for the claim and substantiated with the submissions read as under: The appellant is a Partnership Firm, has let-out commercial properties on leave and licence. The appellant is a member of the Co-operative housing society. During the year apart from paying the Municipal Taxes, the appellant has also paid Rs. 68,18,580/- towards society maintenance charges to the housing society for the maintenance of building including the Lift, providing lighting facility in the common area and cleaning of the common area etc. Society ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on security etc. These facilities are provided by the appellant to the occupant of the premises (Tenant). The appellant further humbly submits that, the non occupancy charges which is including society maintenance charges is also charged by the housing society to members (landlord) whose properties are let-out. Therefore, while determining the annual letting value (ALV) of the property, the sum for which the property might be reasonably expected to be let from year to year, the non occupancy charges paid to the society has to be taken into account. When it is taken into account, the annual letting value (ALV) would be considerably reduced. Because payment of non-occupancy charges is inextricably linked with the letting out of the proper ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Karnala Mansion Pvt. Ltd. appellate order dated 14/09/2011 passed by CIT(A)-38, Mumbai for A.Y. 2004-05, 2005-06 AND 200607. Further the appellant has also relied on the following decisions of the Hon'ble ITAT Mumbai and Delhi I.T.A.T. in case of- 1. SHARMILA TAGORE V. JOINT COMMISSIONER OF INCOME TAX (2005) 93 TTJ MUM 483 Held, That the society maintenance charges have to be deducted even while determining the annual value of the property under Section 23 of Income Tax Act, 1961. 2. Ms. NAN DITA BENERJEE V. ITO (ITA No. 1360/MUM/2000) Held, Housing society charges can be deducted from Income from House Property. 3. DIT (International Taxation) v. Vinod Arora (2012) 139 ITD 205 (Delhi) Held, We find that assessee ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deducted even while determining the annual value of the property under section 23. Though there is no provision in section 24 for deduction of the non-occupancy charges, the non-occupancy charges will have a depressing effect upon the annual letting value of the property. Once the annual letting value of the property is estimated which is the sum for which the property might reasonably be expected to be let from year to year, there is no way to ignore the non-occupancy charges because the question of payment of non-occupancy charges arises only when the property is not self-occupied but is let out. In that view of the matter, the non-occupancy charges levied by the society will have to be considered under section 23 even while arriving ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed in (2002) 82 ITD 0626 (Mum.). The Ld. Counsel for the assessee submitted that the rental income of Rs. 14,40,000/- received by the assessee from the tenant includes the society maintenance charges and Municipal Corporation taxes and hence the assessee has rightly reduced the said charges on account of society maintenance charges and Municipal Corporation taxes amount to Rs. 1,80,000/- from the gross rental received. The Ld. D.R. supported the orders of authorities below. 14. We have considered the rival contentions and also perused the material available on record. We have observed that the assessee has paid society maintenance charges of Rs. 1,17,825/- which is stated to be the obligation of the lessee and the same is duly included in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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