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TMI Blog1991 (10) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... tenable in view of the fact that after the death of Shri Gulu G. Thadani even in the status of karta, the names of the legal heirs should come on record. 2. The learned counsel for the assessee and the learned Departmental Representative were heard and the material placed before us was perused by us. A paper book containing 66 pages is on record. The grounds of appeal for the assessment year 1977-78 are reproduced and for the remaining two years the grounds are identical :-- " (1) That the learned lower authorities have not appreciated the matter concerning the rent of Vijaya Bank premises by not going through fully with the evidence available on record. (2) That the learned Commissioner (Appeals) has taken the letter dated 15th Janua ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned and received. (6) That the order passed is against the merit, circumstances and legal aspects of the case. " 3. Before proceeding to adjudicate upon the issues involved in this case, it will be relevant to recapitulate the sequence of events. The appellant-HUF derives income from house property, share income and income from other sources. The appellant, with effect from May 1973 let out a part of the premises in Thadani Mansion to M/s. Vijaya Bank and declared the rent received at Rs. 15,000 per annum. The Assessing Officer held that the rent receivable was Rs. 2,500 per month. This order was confirmed in appeal by the CIT(A). The appellant, aggrieved with the order of the CIT(A) came before the Tribunal seeking permission to br ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ation of Rs. 75,000. Vijaya Bank, however, expressed its inability to pay Rs. 75,000 as it was not possible under their Rules and Regulations to pay "pugree". The appellant agreed that the payment be made by the bank to M/s. Allied Electric Radio Corporation on getting vacant possession and the payment of Rs. 75,000 be shown as a loan to the appellant. The appellant also agreed that till the sum of Rs. 75,000 was cleared the rent be paid at the rate of Rs. 1,250 per month and after the amount is cleared up, the rent of Rs. 2,500 per month will be paid by the Vijaya Bank to the assessee. This commitment of the assessee is contained in a letter dated 10-4-1973 addressed to one Mr. Sadanand Shetty of Vijaya Bank, New Delhi. 5. The assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to an annual charge of Rs. 1,250 per month as the appellant "was under a legal obligation to suffer Rs. 1,250 per month in favour of the bank" and that such a sum is allowable as deduction under section 24(1)(iv) of the Income-tax Act, 1961. The third limb of the assessee arguments was that there was diversion of income at source to the extent of Rs. 1,250 per month, which cannot be said to be the income of the assessee. 8. We have given our anxious thoughts to the papers filed before us and to the arguments advanced before us. Shorn of all embellishments the fact of the matter is that a sum of Rs. 75,000 was paid by the assessee to the tenant to get the vacant possession--may be after getting the amount from the bank. Even accepting the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nth. It is immaterial whether the assessee paid amount from his own pocket or arranged to make payment through bank. The Ld. CIT (A) has rightly come to the conclusion that the rent of Rs. 2,500 per month was rightly taxed by the Assessing Officer. The photocopies of the pay orders filed by the appellant show that the amount of rent was Rs. 2,500 out of which recovery of Rs. 1,250 was there and the balance amount of Rs. 1,250 was paid by the bank's pay order. This is a clinching evidence to establish that the rent of the premises was Rs. 2,500 per month out of which recovery of the loan was being made. Therefore, this was a clear case of application of income and no diversion of income at source. The arguments to the contrary advanced by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder a decree passed by the court or by some other means, not attributable to the volition of the appellant. This is clear from the letter dated 10-4-1973 addressed by the appellant to one Mr. Sadanand Shetty of Vijaya Bank, New Delhi, the relevant extract from which is reproduced as under : " With regard to the goodwill required by them I do not see any reason why the amount of Rs. 75,000 as goodwill etc. be paid by me. Since you have already settled the amount of goodwill, furniture, fixtures etc. with them, the same is payable to you. It is not possible for me to pay goodwill or any pugree. It was on that account that I readily agreed to give you my recommendation on your application to the Rent Controller. However, I appreciate that ..... X X X X Extracts X X X X X X X X Extracts X X X X
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