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TMI Blog1973 (3) TMI 17X X X X Extracts X X X X X X X X Extracts X X X X ..... )(i)(b) of the Income-tax Act, 1961, were applicable ? (3) Whether, on the facts and in the circumstances of the case, the expenditure which was not allowed while completing the original assessments could be considered for allowance in the course of assessments reopened under section 147(a)? " The reference relates to the assessment years 1954-55, 1960-61 and 1961-62 in respect of a Hindu undivided family, which owns immovable properties and shares in limited companies. The assessee owned a house in Delhi. This house was demised to the Chinese Embassy by a deed dated 30th May, 1952. Clause 1(c) of the deed read as under : " 1. THE LESSEE hereby covenants with the lessor as follows : (c) To maintain and keep the demised premises in good ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... curred on repairs was relevant only for determining the deductions to be allowed from the annual letting value, and had no bearing on the determination of the annual letting value. It was further contended that the tenant had not undertaken to spend anything on substantial repairs and, therefore, the provisions of section 24(1)(i)(b) of the Act were not applicable. In this context, it was also pressed that the assessee had-spent an amount of Rs. 5,648 on repairs for the year 1954-55. The Tribunal found that the lease deed was not produced before the Income-tax Officer, who made the original assessment, and as such there was an omission or failure on the part of the assessee to disclose fully and truly all material facts necessary for the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on that the assessment could not be reopened under section 147(a) of the Income-tax Act. In computing the income from house property, the Income-tax Officer had to determine the annual letting value of the house, and also to fix the deductions in respect of repairs which could be allowed under the Act. For a correct determination of both these questions, the lease deed was a material document. This being so, it was incumbent on the assessee to have filed the lease deed before the Income-tax Officer at the time of the original assessment. The Tribunal has repelled the assessee's contention that the lease deed had been produced by it at the time of the original assessment. This being so, there was an omission on the part of the assessee to di ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the occupation of the owner, or where the property is let to a tenant and the owner has undertaken to bear the cost of repairs, a sum equal to one-sixth of the annual value ; (b) where the property is in the occupation of a tenant who has undertaken to bear the cost of repairs,- (i) the excess of the annual value over the amount of rent payable for a year by the tenant ; or (ii) a sum equal to one-sixth of the annual value, whichever is less ; (ii) the amount of any premium paid to insure the property against risk of damage or destruction ; (iii) where the property is subject to a mortgage or other capital charge, the amount of any interest on such mortgage or charge ; (iv) where the property is subject to an annual charge, not bein ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o an amount equal to the excess of the annual value over the amount of rent payable by the tenant, or a sum equal to one-sixth of the annual value, whichever is less. So far as the present case is concerned, if it is held that it is the landlord who has undertaken the cost of repairs, then inasmuch as the annual value of the house has been fixed at Rs. 40,000 while the amount of rent for which the accommodation has been let out is Rs. 36,000, the assessee is entitled to deduction for repairs to the tune of Rs. 4,000 as allowed by the Income-tax Officer, inasmuch as this sum is less than one-sixth of Rs. 40,000. Counsel for the assessee, however, contends that inasmuch as under the lease deed the assessee had undertaken to bear the cost of s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llector, Bechuanaland Protectorate, their Lordships of the Privy Council quoted with approval the observation of Buckley L.J. in Lurcott v. Wakely & Wheeler regarding the meaning to be ascribed to the word " repairs ". Their Lordships, on page 232, observed as under : "As was pointed out by Buckley L.J. (as he then was) in Lurcott v. Wakely & Wheeler : ' " Repair " and " renew " are not words expressive of a clear contrast', and 'Repair is restoration by renewal, or replacement of subsidiary parts of a whole. Renewal as distinguished from repair, is reconstruction of the entirety, meaning by the entirety not necessarily the whole but substantially the whole subject-matter under discussion'. " Now, under the terms of the present lease deed ..... X X X X Extracts X X X X X X X X Extracts X X X X
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