TMI Blog1994 (12) TMI 326X X X X Extracts X X X X X X X X Extracts X X X X ..... lumn 8 of the application form as follow: The applicant derives rental income. During the period between April 1, 1992, and March 31, 1993, the petitioner received arrear of rent. Whether the arrears of rent received thus will be subject to tax under section 23 of the Income-tax Act. The application was defective in several respects and ultimately a proper application duly signed by the applicant was filed only on November 10, 1994. The fuller facts have been elicited from counsel for the applicant who appeared before the authority at the time of hearing. They may now be stated. The applicant is residing and carrying on business at Glasgow. He has been assessee as non-resident under the Income-tax Act for the assessment years ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uly 6, 1992, the one-sixth share therein of Shri Jagtar Singh Purewal being ₹ 1,05,083. A sum of ₹ 40,452 was, however, deducted from the above amount as tax deducted at source . For the assessment year 1993-94, the applicant filed a return of income. He showed therein ₹ 29,756 as his share of the rental income from the property based on the rents payable and paid for the period April 1, 1992, to March 31, 1993. The amount of ₹ 1,05,083 was also shown as income with a remark : Arrears of rent received from tenant exempt under section 22 . The tax on ₹ 1,34,839 came to ₹ 24,711 but as ₹ 40,452 had been deducted at source, the applicant claimed a refund of at paid in excess. This return has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n excess of the sum referred to in clause (a), the amount so received or receivable; Explanation 1 to section 23(1) also provides that annual rent means, in a case where the property is let throughout the previous year, the actual rent received or receivable by the owner in respect of such year. It is, therefore, clear that the income from property computed under section 23 cannot exceed the actual rent derived in respect of the property for the previous year in question. In the present case, there application has returned and been assessee on the increased rent received by him for the financial year 1992-93. This is no longer in issue. The matter in dispute is only in regard to the sum received by him by way of arrears of rent for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r not could arise only for the assessment year 1992-93 and not the assessment year 1993-94 in respect of which the application has been filed. It is therefore, urged that the authority should decline to answer the question. This contention, apart from being purely technical, is without merit because under section 23, after amendment, the income from house property can be assessee on accrual or receipt basis. Hence, if the arrears are assessable at all as income under section 23, they could be brought to tax in the year of receipt, namely, the financial year 1992-93 relevant to the assessment year 1993-94. This objection, therefore, cannot be sustained. A question might arise as to whether the assessee's act of filing the return in ..... X X X X Extracts X X X X X X X X Extracts X X X X
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