2013 (7) TMI 723

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....efly stated, the relevant facts are that the assessee, an individual who had the main source of income in the form house property, income from business, income from capital gain and income from other sources, while declaring a total income of Rs.1,30,24,697/-, had claimed the following against the income from house property of 'Dada Manzil': a. Electricity expenses Rs.27,055/- b. Legal & Professional fees Rs.2,98,774/- c. Municipal taxes Rs.5,33,955/- d. Licence fees Rs.4,070/- e. Salaries Rs.1,80,000/- f. Telephone expenses Rs.8,275/- g. Travelling expenses Rs.36,796/- h. Water charges Rs.58,760/- Total Rs.11,47,685/- However, in the assessment framed u/s 143(3), the AO had allowed o....

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....n the expenditure and the earning of income need not be direct; even an indirect connection could prove the nexus between the expenditure incurred and the income. The Ld.AR has further relied on the decision of the ITAT in the case of J.B. Patel & Co (Co-Owners) reported in (2009) 118 ITD 556 in support of the proposition that the annual letting value of the property has to be estimated u/s 23(1) (a) of the Act only after deducting the expenses incurred for providing the facility. Further, it has been submitted that the department in the AYs 2001-02 and 2002-03 vide orders of the Ld.CIT(A) dated 14.12.2004 and 10.05.2005 in XII/ITO12(3)-2/IT-19/04-05 and CIT(A)XII/ITO12(3)-2/IT-101/04-05 respectively has accepted and allowed all the said ex....

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....ion 24 provides for such deduction. In the said case the Delhi High Court has observed that use of the word "namely" in Section 24 shows that heads of expenditure whereof deduction can be claimed in the computation of income from house property are exhaustive. The ITAT has also relied on the decision of the Calcutta High Court in the case of Indian City Properties v. CIT (1965) 55 ITR 262 wherein it has been held that deduction specified in Section 24(1) are exhaustive and in order that a particular expenditure may be claimed as permissible deduction, it should come within the ambit of one of the clauses of Section 24(1). It has also been held by the Hon'ble Calcutta High Court that deduction cannot be claimed under any general principle of....

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....e, lift and water pump. The Legal & Prof. fees of Rs. Rs.2,98,774/- is incurred by assessee in order to solve the dispute between assessee and tenant M/s. Bata Shoe & Co in order to vacate the occupation and the same given on rent to another tenant. The telephone and travelling expenses are claimed by the assessee for the follow up of legal case with M/s. Bata Shoe &Co. The salary expenses of Rs.1,80,000/- is out of the maintenance staff for the facilities like electric motors, lift, billing and accounting, cleaning, etc. The water charges of Rs.58,760/- has been paid to Bombay Municipal Corporation (BMC) is for water charges of building. Considering the details of the expenditure claimed by the assessee to the total tune of Rs.11,47,685/-,....