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TMI Blog1982 (3) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... that no rent could, therefore, be deemed to have accrued or arisen to the assessee from them as tenants of the assessee-company. The matter was under dispute and as and when the Court would settle the dispute, if anything would be received by the assessee-company by way of rent for unauthorised period of occupation by them would be returned by it in its return of income of the year in which such Court decree would be passed. A letter to this effect has been filed by the assessee-company, subsequently, before the ITO, on 3rd Aug, 1979 giving, inter alia, the following assurances: "We do hereby assure and agree to be assessed and deposit the tax which shall be found due and payable by us hereafter on account of realisation of disputed rent either as result of the order of civil court or otherwise." The ITO did not accept the above plea of the assessee and brought the income from rent from such tenants also to tax in the assessee-company's hands. The matter was taken in appeal to the AAC and then to the Tribunal which vide its order dt. 18th Feb, 1978 in I.T.A. No. 4276(Cal) of 1976-77 in respect of the asst. yr. 1973-74 restored the matter back to the ITO with the direction tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the aforesaid Act spells this out. Section 23 speaks as to how even if an amount of deposited rent is withdrawn, it will not constitute waiver on the part of the landlord except where such landlord has given notice to the tenant to quit. This would mean if there is merely a dispute as to the quantum of rent, the deposited rent could be withdrawn and not when the tenant's ouster is sought. In the instant case all of the dispute rent are stated to be from tenants whose ejectment is being sought by the assessee. Hence there is no question of the assessee-company withdrawing from the amounts of rent deposited. Out of the many defaulting tenants, the ITO summoned a few and from the statement taken from one of them learnt that the disputed rents are being deposited in the court. The assessee is not seriously disputing this. But it is a fact that no amount of such deposited rent is withdrawn by the assessee who cannot afford to do so without giving up it to eviction. But it is also a fact that the amounts of rent lying in deposit would eventually go to the assessee whatever be the decision of the court. And the assessee has submitted in writing as for instance its letter dated 3rd Augu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the recovery of possession of the premises, the acceptance of rent in respect of the period of default in payment of rent by the landlord from the tenant shall operate as a waiver of such default." It is the submission of the ld. departmental representative that a bare reading of s. 23 would indicate that the landlord's right to eject the tenants does not get lost merely because the landlord withdraws the rent deposited in the court by the tenants, for such withdrawal it does not operate as an admission against the person of the correctness of any of the facts stated in the tenant's application for depositing the rent u/s 21. The acceptance of rent in respect of the period of default in payment of rent may operate as a waiver only if the landlord has not instituted a proceeding for the recovery of the possession of the premises against the tenant in question in the Court. But where such a suit has been filed by a landlord, no presumption of waiver would arise. He pointed out that in Kartick vs. Gangadutt AIR 1956 Cal 120 it was held by the Hon'ble Calcutta High Court that where a tenant remains in possession by virtue of the statute, even after the expiry of the contractual tena ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t no legal relationship existed between the assessee and the tenants so long as the suits were pending in the Court for decision. 9. On behalf of the assessee-company, the order of the ld. CIT(A) was stoutly supported and a few copies of the plaints filed in the Court against some of the tenants were filed before me and it was pleaded that the company had been legally advised not to recognise the tenants against whom suits for eviction have been filed or accepted rents from them and as the company did not treat the said persons as tenants, no rent accrued and arose to the assessee from them. 10. I have carefully considered and examined the facts of the case and the rival submissions. There is no dispute with regard to the fact that the assessee-company has served eviction notices on the various tenants and that it has also filed suits in the Court to evict them. The contractual relationship of the landlord and the tenant has thus come to an end. The company cannot, therefore, except as a matter of right take any rent from the persons who have been declared by it to be no more its tenants. The question as to whether or not the said tenants can be evicted from the said premises ..... X X X X Extracts X X X X X X X X Extracts X X X X
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