TMI Blog2011 (6) TMI 499X X X X Extracts X X X X X X X X Extracts X X X X ..... 75% of total electricity expenses as business expenditure, allocating 25% towards personal use - Held that:- In the absence of any contrary material placed on record by the Revenue to show that conferences with the producers & directors were not held at the residence of the assessee for the purpose of his profession or part of the residence was not used for business purposes and keeping in view the amount of income returned by the assessee ₹ 3.41 crores, we are of the view that further disallowance of 25% over and above already disallowed by the assessee is without any basis and unreasonable and accordingly the same is deleted - Decided in favor of the assessee - I.T.A.No.1653/Mum/2009 - - - Dated:- 29-6-2011 - ORDER PER D.K ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of disallowance of municipal taxes and Society charges of ₹ 1,36,066/- out of income from house property. 8. Briefly stated facts of the above issue are that out of income from house property known as Oxford Towers, Andheri, Mumbai, the assessee claimed deduction of municipal taxes and Society charges of ₹ 1,36,066/- and in support reliance was also placed on the decisions in (1) Seth Raj Channa vs. ITO (1990) 37 TTJ Del. 297, (2) Realty Finance Leasing Pvt. Ltd. 5 SOT 348 and (3) Nandita Banerjee vs. ITO ITA No.1360/Mum/2000. However, the AO was of the view that the method of computation has been substituted by the Finance Act, 2001, w.e.f. 01-04-2002 and the decisions relied upon by the assessee are all relating to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion of municipal taxes is separately provided under sec. 23(1) proviso which reads as under B 23(1) For the purposes of section 22, the annual value of any property shall be deemed to be - (a)xxxxxxxxxxxxx (b)xxxxxxxxxxxxx (c) xxxxxxxxxxxxx Provided that the taxes levied by any local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of accounting regularly employed by him) in determining the annual value of the property of that previous year in which such taxes are actually paid by him. The above proviso clearly provides that the taxes levied by any local authority in re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 24. Income chargeable under the head Income from house property shall be computed after making the following deductions, namely: (a) a sum equal to thirty per cent of the annual value; Thus, from the above, it is clear that a sum equal to 30% is allowable from the annual value so determined u/s.23(1) of the Act. In other words, the deductions u/s. 24 are to be given from, and calculated on the basis of, the annual value so determined. 15. In the cases relied on by the ld. counsel for the assessee B 16. In Sharmila Tagore vs. Jt. CIT (Mumbai) (2005) 93 TTJ (Mum) 83, it has been observed and held vide para 3 of the order as under B 3. The assessee is in further appeal before the Tribunal. As regards the mai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Leasing (P) Ltd. vs. ITO (2006) 5 SOT 348 (Mum.), the Tribunal, after relying on the decision in Praveen Kumar vs. ITO (ITA No.6159 (Mum) of 2011), has observed and held as as under B 12. We have heard the rival submissions. We find that there is no dispute that the charges paid to the society are not covered in the allowable deductions as enumerated under section 24 of the Income-tax Act. The claim of the assessee is that the said society charges are to be allowed as deduction from annual letting value (ALV) as in the case of Municipal taxes. In the case of Praveenkumar (supra), the expenditure incurred towards service charges and legal expenses were allowed as deduction while computing the annual letting value under section 23 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... expenses of ₹ 2,41,350/- as business expenditure, allocating 25% amount of ₹ 60,337/- towards personal use. However, the AO, considering the fact that the residential premises is being used for office purposes also, allocated 50% of electricity expenses towards personal needs instead of 25% claimed by the assessee and accordingly made an addition of ₹ 60,337/- to the total income of the assessee. On appeal, the ld. CIT (A), while observing that by no stretch of imagination 75% of electricity expenses would be allocated for professional purposes with 25% being for personal user, held that the disallowance made by the AO is most reasonable and hence upheld the disallowance made by the AO. 21. At the time of hearing, the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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