TMI Blog2022 (4) TMI 713X X X X Extracts X X X X X X X X Extracts X X X X ..... the Respondents : C. T. Mathews ORDER Per Amarjit Singh , AM The solitary ground of appeal of the assessee is directed against the decision of Ld. CIT(A) in confirming order of the assessing officer in disallowing maintenance charges of ₹ 49,02,455/- (including non occupancy charges) claimed as deduction while computing income from house property. 2. Fact in brief is that assessee has filed return of income declaring total income of ₹ 13,94,91,797/-. The scrutiny assessment u/s. 143(3) was completed on 25.02.2015 and total income was assessed at ₹ 14,06,08,400/-. Subsequently, the proceedings u/s. 147 of the Act was initiated by issuing of notice u/s. 148 of the Act. The case was reopened on the reason that assessee has claimed expenses of ₹ 49,02,455/- towards maintenance charges apart from claiming deduction u/s. 24(a) of the Act. Therefore, assessing officer stated that the income chargeable to tax has escaped assessment to the extent of ₹ 49,02,455/- in the case of the assessee within the meaning of Sec. 147 of the I.T. Act, 1961. Therefore, the Assessing Officer held that neither Sec. 23 nor Sec. 24 provides for the deduction of exp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has disallowed the society maintenance charges of ₹ 68,18,580/- paid by the appellant to the housing society u/s. 24 r.w.s. Sec. 23 of Income Tax Act 1961. The appellant has claimed the said amount of ₹ 68,18,580/- paid to the housing society towards the maintenance charges. Rent collected by the licensor includes the society maintenance charges and rent is nothing hut a compensation money paid by the tenant for using the property. Thus, it is humbly stated that while determining the rent receipt by it from the tenant, the amount of ₹ 68,18,580/- should have been excluded from the gross amount of the rent received by the appellant since it was only reimbursement of the utility charges paid by the appellant to the society on behalf of the tenant for the services enjoyed by the tenant. As per the common practice the licensor pays the municipal taxes, cess or any other charges in respect of the let-out property. Further the society maintenance charges also is paid by the licensor for the benefits/amenities enjoyed by the tenant. Hence society maintenance charge paid by the licensor has direct a nexus for earning rent. The appellant has cla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder dated 09/09/2014 passed by CIT(A)-38, Mumbai for A.Y. 2010-11. (iii) M/s. Karnala Mansion Pvt. Ltd. appellate order dated 14/09/2011 passed by CIT(A)-38, Mumbai for A.Y. 2004-05, 2005-06 AND 200607. Further the appellant has also relied on the following decisions of the Hon'ble ITAT Mumbai and Delhi I.T.A.T. in case of- 1. SHARMILA TAGORE V. JOINT COMMISSIONER OF INCOME TAX (2005) 93 TTJ MUM 483 Held, That the society maintenance charges have to be deducted even while determining the annual value of the property under Section 23 of Income Tax Act, 1961. 2. Ms. NAN DITA BENERJEE V. ITO (ITA No. 1360/MUM/2000) Held, Housing society charges can be deducted from Income from House Property. 3. DIT (International Taxation) v. Vinod Arora (2012) 139 ITD 205 (Delhi) Held, We find that assessee has claimed a sum of 22,888/- was paid by it towards common maintenance of the building including the provision of lift, cleaning of common areas etc. provided by the assessee to the occupants of the flat. Thus, it is the assessees argument that while determining the rent receipt by it from the tenant, the amount of 22,888/- should have been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... als) upheld the AO view. On second appeal: Held-II It was an admitted fact that the gross rent receipt also included the society charges which were to be paid by the assessee. Therefore, while computing the annual value the amount of rent which actually went into the hands of the owner in respect of leased property should be taken into consideration. As per the provisions of Sec. 23 the annual value of property is to be determined on the basis of actual rent received by the owner. Hence, the society charges paid by the assessee in respect of its let out properties were allowable while computing the annual value. 9. The Hon'ble ITAT in the case of Asha Ashar Vs. ITO. [2017] 81 taxmann.com 441 (Mumbai) held as under: 13. Regarding the second issue, the Ld. Counsel for the assessee submitted that the issue is squarely covered by the decision of Mumbai Bench of the Tribunal in the case of Sharmila Tagore v. JCIT, (2005) 93 TTJ (Mumbai) 483 and also in the case of Bombay Oil Industries Ltd. v. DCIT reported in (2002) 82 ITD 0626 (Mum.). The Ld. Counsel for the assessee submitted that the rental income of ₹ 14,40,000/- received by the assessee from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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