TMI Blog2007 (3) TMI 415X X X X Extracts X X X X X X X X Extracts X X X X ..... ons were heard together and as the issues are somewhat interconnected, we are disposing of the appeal as also the cross objection by way of this consolidated order. 2. The grievances raised in the appeal are as follows : 1.On the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in directing the Assessing Officer to compute the income from house property in respect of five vacant galas, after taking into account MRV as per records and other provisions of the Act. 2.On the facts and circumstances of the case and in law, the learned CIT(A) has erred in directing the Assessing Officer to restrict the disallowance in respect of maintenance of two galas to the extent of Rs. 2,40,808. 3. In the relate ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e course of scrutiny assessment proceedings, the Assessing Officer noticed that the assessee is owned of six galas in one building covering a total area of 32,050 sq.ft. One of these galas was rented out and the assessee received a rental income of Rs. 8,25,000 in respect of the same. In this backdrop, the Assessing Officer required the assessee to show cause as to why the annual letting value in respect of the remaining five galas not be computed and brought to tax under the head Income from house property . In reply to this show-cause notice, the assessee explained that these galas were used by the assessee for factory purposes, for several years before the factory was destroyed by a devasting fire. The assessee was a tenant for these ga ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his claim remains unsubstantiated in the absence of supporting evidence. The claim for assessment on the basis of BMC annual letting value was rejected on the ground that "ALV determined by the municipal authorities is only indicative and not sacrosanct". In this background the Assessing Officer computed the annual letting value on the basis of the rent of Rs. 9,54,000 p.a. realized by the assessee by leasing out one of the galas. The Assessing Officer further noted that the assessee has claimed an expenditure of Rs. 2,60,132 during the year on account of minimum power charges in respect of BSES for five out of six galas. This was rejected on the ground that there is no enabling provision under the Income-tax Act to allow minimum bill charg ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position. The paper-book filed by the assessee, which contains copies of relevant judicial precedents, has also been carefully perused and duly considered. 7. We find that section 22 categorically provides that the annual letting value of any building of which the assessee is the owner, other than such portions as the assessee may occupy for the purposes of any business or profession carried on by him profits of which are chargeable to income-tax, shall be chargeable to income-tax under the head Income from house property . To invoke the exclusion clause embedded in section 22, therefore, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer by directing him to adopt the BMC annual letting value. Hon ble Bombay High Court, in the case of M.V. Sonavala v. CIT [1989] 177 ITR 246 have held that for the purpose of computation on the basis of rent for which property might be reasonably let out , under section 23(1)( a ), municipal valuation is to be taken into account. The actual rent being realized by similar property cannot have, in this context, any bearing. The stand of the CIT(A) is thus correct and does not call for any interference. As far as expenses on maintenance are concerned, we see no reasons to disturb the findings of the CIT(A) which are on a reasonable basis and assessee s own estimates. Coming to the electricity expenses of Rs. 2,60,132 as claimed by th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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