TMI Blog2011 (4) TMI 1277X X X X Extracts X X X X X X X X Extracts X X X X ..... TMI 9 - BOMBAY High Court has held that for the purpose of determining annual value of the property all taxes, cesses and outgoings being liabilities of the assessee, have to be excluded from assessable income in view of s. 023(1)(b). So far as the decision of the Tribunal in the case of Barodawala Properties Ltd. 2001 (12) TMI 875 - ITAT MUMBAI is concerned, we find that the Tribunal in subsequent judgments have held that while calculating annual value of the let out property, maintenance charges paid to the society by the assessee is admissible deduction from the annual let out value u/s 023(1)(b). In view of the series of decisions relied on by the ld. counsel for the assessee supporting the deductibility of society charges from the g ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... He, therefore, asked the assessee to show cause as to why the same should not be disallowed. The assessee in her reply stated as under:- With regards to rental income in respect of Flat No. 23B, Belvedre Court, Mumbai, it may be noted that your assessee has claimed deduction of ₹ 1,26,000/- towards society charges. The said deduction is claimed relying on the decision of Ms. Nandita Banerjee reported in the case of Bombay Tribunal ITA No. 1360/Mum/2000. Copy of the said decision is enclosed herewith. In the said decision the tribunal has held that after reducing society charges if the balance amount chargeable to tax is more than Annual Ratable value fixed by the municipal Corporation, said society charges should be r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase. He also rejected the concept of real income theory. He noted that in fact what is taxable is the notional income which can be derived from the house property. That is the reason a standard deduction of 30% is provided u/s 24. Whether assessee incurs any expense or not and by providing for standard deduction it is implied that all the expenses (except specifically provided under the Act such as Municipal taxes and interest on borrowed capital) for earning the income have been covered. He, accordingly, recomputed the income from house property by disallowing the deduction of society charges amounting to ₹ 1,26,000/- for A.Y. 2005-06. 5. Before the ld. CIT(A), the assessee submitted that he has paid society charges and non-occupa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... while computing annual value u/s 23(1)(b) of the Act, the society charges paid by the assessee has to be deducted. He submitted that the same is paid as per Leave and Licence Agreement with the lessee and if the lessee had paid society charges, the assessee would have received lesser amount of rent. 1. Varma Family Trust v. ITO - [1984] 7 ITD 392 (Bom) 2. Lekhraj Channa v. ITO [1990] 37 TTJ (Del) 297. 3. Neelam Cable Mfg. Co. v. ACIT [1997) 63 ITD 1 (Del) 4. Bombay Oil Industries v, DCIT [2002] 82 ITD 626 (Mum) 5. Ms. Nandita Banerjee v. ITO (ITA No. 1360/M/200, dated 8.4.04 6. Sharmila Tagore v. JCIT [2005] 93 TTJ (Mum) 483 7. ITO v. Gopichand P. Godhw ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ciety charges from the rental income for the purpose of calculation of annual letting value u/s 23(1)(b). We find the Mumbai Bench of the ITAT in the case of Varma Family Trust (supra) has held that section 23(1)(b) proceeds on the basis of actual rent received or receivable and therefore all the outgoings for earning the said rental income would be admissible deduction. We find the Tribunal in the case of Bombay Oil Industries (supra) has held that maintenance charges and municipal taxes paid by the assessee are to be deducted from gross rent to arrive at the annual value. We find that in the case of Sharmila Tagore (supra), the Tribunal held that maintenance charges paid to housing society have to deducted even while computing annual lett ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
