TMI Blog2004 (10) TMI 542X X X X Extracts X X X X X X X X Extracts X X X X ..... educted from the rent received/receivable are specified in section 23 and therefore Assessing Officer has rightly deducted the municipal taxes and did not deduct other expenses. ( b ) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred to appreciate that the assessee is not entitled for any deduction other than what have been specifically mentioned in section 24 and therefore Assessing Officer has rightly disallowed other expenses such as maintenance charges, lease rent etc. 3.On the facts and in the circumstances of the case and in law, the decision s followed by the CIT(A) are distinguishable on facts and therefore they are not applicable to the instant case." In the Cross Objections filed by the assessee, as stated by the learned Counsel of the assessee that these are only supporting the order of CIT(A). In the present case, the assessee has been assessed as an Association of Persons. Its source of income is rent earned by it from the Bank of India in respect of a premises situated at Nariman Point, Bombay. The computation as submitted by assessee for the respective years as per pages 19 21 are as under : "A.Y. 1997-98 Computatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... use property: (A.Y. 1998-99) Rent recd. From bank Rs. 24,99,665 Car parking recd. from bank Rs. 18,000 Water charges recd. from bank Rs. 44,958 Mun. charges other charges paid by bank to the assessee Rs. 6,03,579 Rs. 31,66,202 Less: Municipal taxes Rs. 5,24,288 Rs. 26,41,914 Less: Dedcn. under section 24(1) 1/5th thereof Rs. 5,28,383 Total Rs. 21,13,531 Rounded off to: Rs. 21,13,530 The computation of income made by the Assessing Officer was agitated in the appeals filed before the CIT(A) who has deleted the addition. The revenue is aggrieved hence in appeal. As mentioned earlier, the C.Os have been filed to support the order of CIT(A). 2. The above-mentioned property is subject to rent agreement entered into between the assessee and Bank of India. The copy of the said agreement is in the shape of letter issued by the Bank of India dated 2nd June, 1981 which is placed at pages 16 to 18 of the paper book. The relevant clauses are 3, 4 and 14 which are reproduc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bank to assessee Less: Municipal 502,213 (as allowed 502,213 taxes by A.O.) Annual 2,656,481 1,997,452 Letting Value Less: Deduction 531,296 399,490 under section 24(1) 1/5th thereof 2,125,185 1,597,962 Assessment year 1998-99 As per As per the Assessing CIT(A) Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntered into between assessee and the bank and contended that excluding the existing municipal and Government and other rates, taxes, cesses, assessments and outgoings, any increase thereto was the liability of the bank as per clause 4 of the agreement. He further referred to clause 14, according to which, car parking facility against monthly charges also to be provided by assessee to the Bank. He contended that all the amounts disallowed by the Assessing Officer were reimbursement of the amount paid by the assessee in respect of property rented out to the Bank. All these were outgoings, therefore, allowable and has rightly been held allowable by the CIT(A). He further pleaded that the rent received by the assessee in the present case is more than the annual letting value fixed by Municipal Corporation/standard rent. Therefore, the actual rent being in excess of Municipal Corporation/standard rent, all the expenses and outgoings have to be excluded from the rent receivable and the net of the amount should be considered to be the income of the assessee. This only has been done by CIT(A), therefore, the order of CIT(A) should be upheld. 5. We have carefully considered the rival su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fair rent. However, section 23(1)( b ) only applies to cases where the actual rent received is more than the reasonable rent under section 23(1)( a ) of the Act and it is for this reason that section 23(1)( b ) contemplates that in such cases the annual value should be decided on the basis of the actual rent received." 6. It is not disputed by revenue that only section 23(1)( b ) is applicable to the present case as it is also not the case of Assessing Officer as he has computed the house property income as per actual rent received. In this view of the situation, if the outgoings in respect of which additions have been deleted by CIT(A) were the liability of the assessee, the same should be excluded from the assessable income as the net amount only can be considered which is received by the assessee or is receivable by the assessee as per express provisions of section 23(1)( b ). However, this fact has not been ascertained that whether the amounts claimed by the assessee and disallowed by the Assessing Officer in respect of car-parking, water charges and municipal charges and other charges were the actual liability of the assessee or not. This factual aspect has to be examined ..... X X X X Extracts X X X X X X X X Extracts X X X X
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