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TMI Blog2014 (6) TMI 1024X X X X Extracts X X X X X X X X Extracts X X X X ..... g grounds:- "1. On the facts and in the circumstances of the case and in law the learned CIT(A) erred in confirming the order whereby he had disallowed the claim of deduction of maintenance charges paid to society / builder in respect of the following flats let out by the appellant. (i) Flat no.2702, Octavius, Powai, Mumbai Rs. 24,240 (ii) Flat no.503 Delphi Premises, Powai Rs. 1,01,088 2. The said CIT(A) erred in not appreciating that the leave and licence agreement with the tenant there is a specific mention that the maintenance charges of the flats payable to society / builder will have to be paid by the appellant out of the actual rent paid by the tenant and that the deduction for the maintenance ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... '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 o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal has considered other decisions, wherein it has been held that maintenance charges to the society are to be allowed while conducting the annual value determined under section 23(1). 6. The learned Departmental Representative, on the other hand, strongly relied upon the order of the learned Commissioner (Appeals) and submitted that once the statutory deduction of 30% is allowed, then the same excludes all kind of maintenance and charges. 7. We have heard the rival contentions, perused the relevant findings of the authorities below and the material available on record. The Assessing Officer as well as the learned Commissioner (Appeals) have strongly relied upon the fact that the section 23(1)(a) and 23(1)(b), which were p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar 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), the amount so received or receivable; or (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable: 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 wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee, 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. 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 cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of Gopichand P. Godhwani (supra), after considering the decision of the Hon'ble Bombay High Court in the case of J.K. Investors (Bombay) Ltd. (2001) 168 CTR (Bom) 189 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. 23(1)(b). So far as the decision of the Tribunal in the case of Barodawala Properties Ltd. (supra) 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 23(1)(b). In view of the series ..... X X X X Extracts X X X X X X X X Extracts X X X X
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