TMI Blog2014 (6) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... ad to make such payment, then the actual rent received would have been less. The deduction under section 24, is to be calculated on the basis of income which is earned and chargeable to tax under section 22 and 23. If the gross rent also includes society charges, which is to be paid by the assessee, then while computing the annual value, the amount of rent which is actually received in the hands of the owner in respect of the lease property should be taken into consideration while giving the deduction under section 24. Thus, the actual rent received as envisaged in section 23, should be construed as net rental income received after deducting mandatory society charges. - Decided in favour of assessee. - ITA no. 7345/Mum./2012 (Assessment Year : 2009–10) - - - Dated:- 30-6-2014 - Shri D. Karunakara Rao, Accountant Member And Shri Amit Shukla, Judicial Member Assessee by: Mr. D.H. Shah Revenue by: Mr. Sumit Kumar ORDER Amit Shukla, The present appeal has been preferred by the assessee, challenging the impugned order dated 22nd October 2012, passed by the learned Commissioner (Appeals) XIII, Mumbai, for the quantum ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. The Assessing Officer rejected the assessee s contention and held that other than the amounts covered by clause (a) and (b) of section 24, no other deduction can be claimed by the assessee against the rental income of the property. Thus, the society maintenance charges cannot be allowed as deduction while computing the income under the head income from house property . He submitted that the judicial pronouncements relied upon by the assessee relate to the assessment years prior to assessment year 2002 03 and, hence, cannot be said to be applicable to the current provisions of section 23 and 24. Thus, he disallowed the claim of maintenance charges claimed by the assessee. 4. The learned Commissioner (Appeals) also rejected the assessee s contention and upheld the reasoning of the Assessing Officer that most of the decisions relied upon by the learned counsel relate to prior period of the assessment year 2002 03 and after 1st April 2002, the law does not envisage that such a claim for deduction could be allowed. He also referred to the following decision of the Tribunal in holding that the maintenance charges paid to the assessee by the assessee is not a deduction a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he annual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable: Provided that where the property is in the occupation of a tenant, the taxes levied by any local authority in respect of the property shall, to the extent such taxes are borne by the owner, 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 subsequent provisions brought in statute w.e.f. 1st April 2002, read as under: Annual value how determined. 23. (1) For the purposes of section 22, the annual value of any property shall be deemed to be- (a) the sum for which the property might reasonably be expected to let from year to year; or (b) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g mandatory society charges. This view has been upheld by the Tribunal, Mumbai Benches, in Saif Ali Khan (supra), wherein the following decisions have been relied upon: i) Sharmila Tagore v/s JCIT, [2005] 93 TTJ 483 (Bom.); ii) Lekraj Channa v/s ITO, [1990] 37 TTJ 297 (Del.); and iii) Realty Finance Leasing (P) Ltd. v/s ITO, [2006] 5 SOT 348 (Mum.) 9. Besides this, in case of Ms. Aloo Bejan Daver (supra), the Tribunal has again referred to various decisions for coming to the following conclusions: 7. We have considered the submissions made by both the parties, perused the orders of the A.O. and ld. CIT(A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. The only dispute in the impugned appeal is regarding the allowability of deduction of society 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 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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