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TMI Blog1996 (1) TMI 152X X X X Extracts X X X X X X X X Extracts X X X X ..... Before the ITO it was explained and argued by the assessee that since the arrear of rent relates to accounting period from 24-4-1983 to 30-4-1984, it cannot be included in the rent received for previous year relevant to this assessment year. It was further pleaded that this amount can neither be assessed under the head 'other sources' as the amount has been received on account of income from house property. The Assessing Officer (A.O.) rejected the argument of the assessee on the ground that the assessee did not return this income in his return of income for assessment years relevant to the period from 28-4-1983 to 30-4-1984. He, therefore, assessed the arrear rent of Rs.76,618 to tax. 3. Before the CIT(A) the assessee submitted that the sum of Rs. 76,618 was received by the assessee towards increased rent for the period from 28-4-1983 to 30-4-1984 having been sanctioned by the Geological Survey of India. It was further submitted that the amount so received during the financial year 1987-88 was not rent received or receivable in respect of the year ended on 31-3-1988. The assessee also reiterated the same arguments and contentions which were put forth before the AO. The CIT(A) c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to support his contentions Sri Sinha relied on the Calcutta High Court decision in the case of CIT v. Bharat Petroleum Corpn. Ltd. [1993] 202 ITR 492. 6. In reply, the learned representative for the assessee Sri Bajoria submitted that the accrual of rent is not disputed but accrual is to other past 12 months and not to these present months under consideration. 7. We have carefully considered the rival contentions and arguments, the relevant facts and material available on the record and have also gone through the judicial decisions on which reliance has been placed by both the parties. We find that the issue before us to be decided is whether the arrears of rent relating to other previous years are taxable as income from house property of the previous year relevant to this assessment year in which they were received. According to the provisions of law as envisaged in sections 22 23 of the Act, it is only annual rent received or receivable which is taxable and which is brought to tax. Therefore, the arrears of rent of past years are not part of the annual rent of the previous year in which they are received. In other words, the rent of past years increased retrospectively shal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y deduction under section 23 or section 24) as the income of that previous year, whether the assessee is the owner of that property in that year or not. " Section 25A makes a special provision for charging the unrealised rent already allowed as a deduction to tax if the same is subsequently recovered by the assessee. Under section 25A where a deduction has been allowed under section 24(1)(x) of the Act in respect of unrealised rent and subsequently during any previous year the assessee has realised any amount in respect of such unrealised rent, the amount so realised shall for and from the assessment year 1985-86 be chargeable under the head "Income from house property" and accordingly charged to tax as income of that year, irrespective of whether the assessee is the owner of that property in that year or not. It is apparent from the provisions of section 25A that the CIT(A) was not justified in applying the same to the instant case as firstly, the arrears of rent received by the assessee are not unrealised rent recovered subsequently and secondly, it is not unrealised rent already allowed as a deduction to tax under section 24(1)(x) of the Act. According to the provisions of sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee as having been rightly assessed and as such assessment had become final. Hence, the sum of Rs. 44,47,482 could not be included in the total income of the assessee for the assessment year 1975-76". Such is not the factual and legal position in the instant case. Therefore, the ratio of the decision in the case of Bharat Petroleum Corpn. Ltd. does not come to the rescue of the department as it is not applicable to the facts of the instant case at all. 11. On the other hand, we find that Sri R.N. Bajoria, the learned counsel for the assessee has relied on the decision of the Authority for Advance Rulings, New Delhi in the case of Jagtar Singh Purewal which helps the cause of the assessee. In that case the question on which the authority's ruling is required is as to whether the applicant is liable to income-tax on the sum of Rs. 1,05,083 received by him on 6-7-1992 towards arrears of rent for the period from 1-8-1983 to 31-3-1992 in the assessment year 1993-94. The applicant filed a return showing Rs. 29,756 as his share of rental income for the period from 1-4-1992 to 31-3-1993 and showed arrears of rent in the return as exempt under section 22 of the Act. The Authority for Advan ..... X X X X Extracts X X X X X X X X Extracts X X X X
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