9911796707
TMI Blog1989 (4) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the claim put forward by the assessee and allowed the same to the tune of Rs. 2,400 only. He treated the entire building as one residential unit as against the assessee's claim that each of the rooms occupied by independent tenants on the four floors be treated as separate residential units. The relevant reasons recorded by the ITO in rejecting the assessee's claim were as under : "In this connection, it is ascertained that the said building was rented to 26 tenants and the property bears only one Census Number of the Gram Panchayat and that there is common passage for coming and going on first and second floor. The water is being taken out from tubewell with the help of Water Pump and being stored in a storage tank on the top of the building and therefrom water is supplied to each 1 and moreover, the property is rented to diamond cutters who are running ghanties of diamond cutting and polishing industry in each room and therefore, entire building was one commercial-cum-residential unit and that sub-clause (i) (ii) of clause (b) of provision of section 23(1)(b) also indicates that in order to constitute a residential unit for the purpose of the section, it must have a separa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e structures containing a plurality of residential or dwelling units, such as flats. This condition is fulfilled by the various units in the building owned by the appellant. I, therefore, direct that the ITO should allow deduction of Rs. 36,200 claimed under proviso to sec. 23(1)(c) in respect of 26 units." 5. The learned D.R. vehemently supported the order of the ITO and reiterated arguments on lines identical to those as had weighed with the ITO in rejecting the assessee's claim. According to him the separate rooms in the building could not be classified as independent residential units within the meaning of the proviso to section 23(1)(b). It was submitted that more letting of each of these rooms to separate tenants would not convert them into separate residential units for purposes of claiming a separate deduction under the proviso to sec. 23(1)(b). He placed strong reliance on the decision of the Kerala High Court in the case of Mrs. Elizabeth Varghese with the further submission that the facts of that case and the present one were identical. 6. At this stage he made a submission to the effect that even otherwise the assessee was not entitled to any deduction whatsoever si ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s also submitted that in the case before the Hon'ble Kerala High Court the A.L.V. had been worked out for the entire building and not separately for each of the rooms which had been given on rent to different persons. That, according to him, was the case of a "lodge" as against the present case which was that of a residential property. According to the learned counsel a separate A.L.V. was not possible for each of the units in the present case since the Gram Panchayat had itself provided that the property tax was to be calculated on the basis of capital value and there was no system of calculating the A.L.V. 9. It was further submitted that in any building of the type like the present one there had to be certain portions such as stair-case and passages on different floors which were subjected to common use but this according to him would not make the separate residential units into one as had been done by the ITO. He also made a statement at the bar to the effect that in the subsequent asst. years the ITO had accepted the assessee's claim although in assessments under section 143(1) of the Act. He finally made an impassioned plea for the confirmation of the order of the AAC. 10 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... foresaid facts and the facts of the case before the Hon'ble Kerala High Court. Before we examine these it would be relevant to record the following observations of their Lordships at page 609 of the report : "Clauses (a) and (b) of the proviso will, in our opinion, take within their ambit only buildings comprising a plurality of dwelling units like flats, which by themselves will constitute houses or homes. Each such dwelling unit will ordinarily be a separate house in itself with its own electricity meter and water supply connection. " (Emphasis supplied by us) In the present assessee's case the rooms on each of the floors have a separate independent entrance, separate tenants, separate electric meters and separate bathrooms and lavatory facilities. The distinguishing feature which is noted straightaway is the electric meter which was only one for the whole building in the matter before the Hon'ble Kerala High Court. (Emphasis supplied by us) 12. Another distinguishing feature is the situation of the property. In the Kerala case although the situation is not given it is mentioned that the same fell within the jurisdiction of the Municipal Corporation. The natural presumpti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al unit/units" may be in the form of a flat or flats with more than one room and with attached bathrooms etc. and obviously a separate door to each such flat or flats. However even in such modern structures there would be a common stair-case and a passage or lobby leading to the separate flat or flats. Even the water supply to each of the flats would be from pipes which are connected to overhead water tanks either jointly or singly for each flat or set of flats. 17. In the case of the present building as well there is a common stair-case for going to the rooms on the upper floors and there are balconies as well through which the tenants have to pass before going in or coming out of their respective units. The commonness finishes there since each room occupied by a tenant is an independent unit in itself where he works and resides. His doing so does not disturb anybody else and he goes in and out as he pleases. 18. The water supply system is also a normal one when compared to the ones existing in big towns and cities. It has in fact been stated by the assessee that the water facility has been provided as a special measure to attract tenants since the Gram Panchayat does not prov ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
