TaxTMI 
TaxTMI 
2021 (1) TMI 38
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.... partnership firm and has income from House property interest on deposits and income from other sources. The assessee firm filed the return of income on 25.07.2013 disclosing the total income of Rs. 1,72,64,680/-. Subsequently, the case was selected for scrutiny and notice u/s 143(2) and 142(1) of the Act along with questioner were issued. In compliance to the notice, the Ld. AR of the assessee appeared in the assessment proceedings from time to time and furnished the details as called for and the case was discussed. The A.O on perusal of the financial statements, found that the assessee has obtained the building Dubash House on lease from Bombay Port Trust (BPT). Further,the assessee firm has given the building on rent to various parties /tenants and such rental income is assessed under income from house property. The A.O found that, the assessee firm is offering the rental income after claiming deduction of lease rent paid to Bombay Port Trust (BPT) of Rs. 37,39,000/-.The A.O is of the opinion that the assessee is not eligible to claim the deduction of lease rent paid to the BPT. The assessee has filed the submissions on the disputed issue on 16.03.2016 along with supporting d....
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....assessee firm has claimed the lease rent paid as deduction from the rental income/licence fee received from its tenants. The assessee has filed the detailed explanations on the clauses of the leave and license agreements. The LdAR emphasized on the fact of payment of additional rent to be charged irrespective of the actual rent received. The Ld. AR mentioned that the annual value of the property has to be determined as per provisions of Sec. 23(1)(b) of the Act. We consider it appropriate to refer to Sec. 23(1)(b) of the Act, which is read as under: "(1) For the purposes of Sec. 22, the annual value of any property shall be deemed to be- (a) the sum for which the property might reasonably be expected to let from year 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" 6. Further, We find that the assessee firm has to pay the lease rent of building to its owner Bombay Port Trust (BPT) and also the assessee has entered into the leave and license agreement with tenants ....
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....ase agreement these maintenance charges were to be borne by the tenants. The Commissioner (Appeals), however, allowed this claim which view of the Commissioner (Appeals)was affirmed by the Tribunal as well. Held that since the maintenance and other charges were paid by the assessee, it was rightly held to be deductible from the rent while computing the annual letting value. 7.1 We also find in the case of M/s. Suman Didwania Vs. ACIT (supra), Hon'ble Tribunal has held as under: "3. We have heard the parties. The Ld. Counsel placed his reliance on the decision of the ITAT in the case of Sharmila Tagore vs. JCIT 93 TTJ 483 and in the case of ITO vs. Gopichand P. Godwani 1 SOT 374 (Mum). The Ld. D.R. placed reliance on the orders of the authorities below. We find that the assessee's claim is covered by the decision of the ITAT, Mumbai in the case of Sharmila Tagore (supra) in the said case it is held that the maintenance charges paid by the assessee have to be deducted even determining the annual value of the property u/s.23. We, accordingly, following the decision of the co-ordinate Bench allow the grounds taken by the assessee and direct the A.O. to re-....
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....he provisions of section 23(1)(a) of the Income Tax Act apply both to owner-occupied property as also to property which is let out and the measure of valuation to decide the annual value is the standard rent or the fair rent. However, section 23(1)(b) only applies to cases where the actual rent received is more than the reasonable rent under section 23(1)(a) of the Act and it is for this reason that section 23(1)(b) contemplates that in such cases the annual value should be decided on the basis of the actual rent received." 6. It is not disputed by revenue that only section 23(1)(b) is applicable to the present case as it is also not the case of assessing officer as he has computed the house property income as per actual rent received. In this view of the situation, if the outgoings in respect of which additions have been deleted by CIT (A) were the liability of the assessee, the same should be excluded from the assessable income as the net amount only can be considered which is received by the assessee or is receivable by the assessee as per express provisions of section 23(1)(b). However, this fact has not been ascertained that whether the amounts claimed by the....