TMI Blog2005 (4) TMI 529X X X X Extracts X X X X X X X X Extracts X X X X ..... ve ground reads as follows : "I. The CIT(A) XXXII has erred in : ( i )confirming the treatment given by the Asstt. Commissioner of Income-tax, Special Circle 81(1), Mumbai to the payment of Rs. 2,37,370 (Smt. K.D. Ambani Rs. 1,69,212) made by the tenant on behalf of the appellant, as the income of the appellant and thereby confirming the income from property at Rs. 2,31,997 (Smt. K.D. Ambani Rs. 1,77,282 as against the income of Rs. 48,000 (Smt. K.D. Ambani Rs. 48,000) shown in the return of income. ( ii )Disregarding the clear provisions of section 23(1)( b ) of the Income-tax Act, 1961, which defines rent as under :- The annual value of the property shall be : ( a )the sum for which property might reasonably be expected to le ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent Amount (Rs.) 1. Contribution for plumbing, rectification, painting and structural repairs 3,868 2. Pest treatment charges 5,144 3. Repair Fund 18,100 4. Special contribution to structural repair as per resolution passed to special general body meeting held on 15-3-1990 60,000 5. Terrace water proofing 4,000 6. External Plaster and gunting work 5,000 7. Additional Water Benefit charge 34,200 8. Sinking Fund 3,304 9. Non-occupancy charge 60,000 10. Mis. Charges 2,900 11. Other outgoings 33,480 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7,374, deduction of the same is given and the annual value is determined as Rs. 2,37,370 + 60,000 - 7,374 = Rs. 2,89,996. Computation of income from house property : Name of property Annual value ( i )Usha Kiran Rs. 2,89,996 Less : Deduction :- Under section 24(1)( i ) of IT Act : Rs. 57,999 For repairs = 1/5th of ALV Income from house property as determined : Rs. 2,31,997 Less : Income from house property as returned : Rs. 48,000 Difference by which returned income needs to be increased : Rs. 1,83,997 (Figures as per file of Shri Mukesh D. Ambani) 3. Being aggrieved the issu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... agreement, it was the responsibility of the tenant to bear all the expenses related the said tenanted property, such as maintenance of the flat, society charges, etc. so the tenant has paid the aforesaid sum to the society as maintenance charges in respect of the bills raised for the relevant period. Now the question is that whether the expenditure paid directly by the tenant to the housing society formed a part of the rent receivable in the hands of the owner in terms of section 23(1)( b ) of IT Act. Clause (2) of the agreement provides that the licensee shall be fully responsible for maintaining the said premises without being the licensor i.e., the appellant to cost on this account. Clause (8) has also revealed that during the period ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... portionate share in respect of the monthly outgoings in respect of maintenance charges etc. On the other hand, it is not clear why the said amount was treated by the Assessing Officer as rent receivable in the hands of the assessee specially when the expenditure were nothing but outgoings in respect of the said flat. How an expenditure can be treated as rent received by the owner is not clear from the order of the revenue authorities. Whether an expense can be treated as an income has also not been clarified by the revenue authorities. From the clauses it can be observed that the licensee had paid the said amount against or raised by the society though in the name of the owners. The Assessing Officer has not raised any doubt in respect of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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