TaxTMI 
TaxTMI 
1987 (11) TMI 1
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....ction for " repairs " in respect of house property at Delhi leased out to the Chinese Embassy under a deed of lease dated May 30, 1952. Originally, the assessments were completed including therein the annual letting value of this property at Rs. 36,000 and allowing a deduction of Rs. 6,000 for repairs under section 24(1)(i)(a) of the Income-tax Act, 1961 (" the Act "), or the corresponding provisions of the Act of 1922. Subsequently, the assessments were reopened on the ground that the assessee had got excess of relief. In the reassessments, the Income-tax Officer held that as the lessee had undertaken " to keep the premises in good and habitable condition, execute all repairs ", the deduction of Rs. 6,000 was impermissible. The Income-tax....
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.... the facts and in the circumstances of the case, the expenditure which was not allowed while completing the original assessments could be considered for allowance in the course of the assessments reopened under section 147(a) ? As stated earlier, the High Court answered the questions against the assessee, but granted a certificate under section 261 of the Act as in its opinion two important questions arose out of the judgment. The questions the High Court had in mind are questions Nos. (2) and (3) supra. It must, at the outset, be observed that the question as to the validity of the reopening of the assessments which was raised before the High Court was not, in our opinion, rightly, reagitated here. Learned counsel for the appellants urge....
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....dertaken to bear the cost of repairs ", the deduction towards repairs which the assessee-owner is entitled to is either the excess of the annual value over the amount of rent payable for a year by the tenant, or a sum equal to one-sixth of the annual value, whichever is less. There is no dispute that if section 24(1)(i)(b) is applicable, the computation would be correct. The only question, therefore, is whether, having regard to the terms of the covenant, it could be said that the tenant had undertaken to bear the cost of repairs within the meaning and for the purposes of section 24(1)(i)(b) of the Act. The covenant in this behalf in the lease deed dated September 9, 1952, is in terms following: "To maintain and keep the demised premises ....
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....nt of the tenancy, the tenant must do the necessary repairs, notwithstanding that the building is thereby put in a better condition than when the landlord let it. The effect is the same if, without expressly covenanting to put it into repair, the tenant only covenants to keep the house in tenantable repair. Such a covenant presupposes putting the house in such repair, and keeping it in repair during the term. The construction of the covenant is the same whether the covenant specifies ' tenantable ' or ' habitable ' or 'good' repair. A general covenant to repair without any such words is satisfied if the premises are kept in a substantial state of repair." (Emphasis supplied) The oft-quoted observations in Lurcott v. Wakely and Wheeler [1....