TaxTMI 
TaxTMI 
2004 (10) TMI 542
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.... ALV the nature of payments which have to be deducted from the rent received/receivable are specified in section 23 and therefore Assessing Officer has rightly deducted the municipal taxes and did not deduct other expenses. ( b) On the facts and in the circumstances of the case and in law, the learned CIT(A) erred to appreciate that the assessee is not entitled for any deduction other than what have been specifically mentioned in section 24 and therefore Assessing Officer has rightly disallowed other expenses such as maintenance charges, lease rent etc. 3.On the facts and in the circumstances of the case and in law, the decision's followed by the CIT(A) are distinguishable on facts and therefore they are not applicable to the instant case." In the Cross Objections filed by the assessee, as stated by the learned Counsel of the assessee that these are only supporting the order of CIT(A). In the present case, the assessee has been assessed as an Association of Persons. Its source of income is rent earned by it from the Bank of India in respect of a premises situated at Nariman Point, Bombay. The computation as submitted by assessee for the respective years as per pages 19 & 2....
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....es recd. from bank Rs. 44,958 Mun. charges & other charges paid by bank to the assessee Rs. 6,03,579 Rs. 31,66,202 Less: Municipal taxes Rs. 5,24,288 Rs. 26,41,914 Less: Dedcn. under section 24(1) 1/5th thereof Rs. 5,28,383 Total Rs. 21,13,531 Rounded off to: Rs. 21,13,530 The computation of income made by the Assessing Officer was agitated in the appeals filed before the CIT(A) who has deleted the addition. The revenue is aggrieved hence in appeal. As mentioned earlier, the C.Os have been filed to support the order of CIT(A). 2. The above-mentioned property is subject to rent agreement entered into between the assessee and Bank of India. The copy of the said agreement is in the shape of letter issued by the Bank of India dated 2nd June, 1981 which is placed at pages 16 to 18 of the paper book. The relevant clauses are 3, 4 and 14 which are reproduced below: "(3) Rent: Rs. 13.90 per sq.ft. per month for the 3rd floor area inclusive of ground rent, property tax, municipal Government and other rates, taxes, cesses and assessments and all other outgoings but excludi....
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....bsp; Less: Municipal 502,213 (as allowed 502,213 taxes by A.O.) Annual 2,656,481 1,997,452 Letting Value Less: Deduction 531,296 399,490 under section 24(1) 1/5th thereof 2,125,185 1,597,962 Assessment year 1998-99 As per As per the Assessing CIT(A) Officer Rent recd. 2,499,665 2,499,665 from bank ....
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....s, taxes, cesses, assessments and outgoings, any increase thereto was the liability of the bank as per clause 4 of the agreement. He further referred to clause 14, according to which, car parking facility against monthly charges also to be provided by assessee to the Bank. He contended that all the amounts disallowed by the Assessing Officer were reimbursement of the amount paid by the assessee in respect of property rented out to the Bank. All these were outgoings, therefore, allowable and has rightly been held allowable by the CIT(A). He further pleaded that the rent received by the assessee in the present case is more than the annual letting value fixed by Municipal Corporation/standard rent. Therefore, the actual rent being in excess of Municipal Corporation/standard rent, all the expenses and outgoings have to be excluded from the rent receivable and the net of the amount should be considered to be the income of the assessee. This only has been done by CIT(A), therefore, the order of CIT(A) should be upheld. 5. We have carefully considered the rival submissions in the light of material placed before us. It is the contention of the assessee that the actual rent received by i....