Case Law Details
K Lalchand Pvt Ltd Vs CIT (ITAT Mumbai)
Municipal tax quantified by society & proportionately collected from flat owner is allowable expenditure
ITAT Mumbai held that in case municipal tax receipts are in name of land lord and ownership of flats are with society and taxes are borne by the society and collects proportionate taxes from flat owner. Then, municipal tax so paid is allowable as expenditure u/s 24 of the Income Tax Act.
Facts- The assessee is engaged in the business of dealing in shares and securities and renting immovable properties. During the year, the assessee has declared a rental income of ₹.76,01,000/-, dividend of ₹.1,61,600/- and share of profit from M/s Lalco Services Apartments, LLP Mumbai of ₹.14,98,991/-. AO observed that the assessee has computed rental income at ₹.45,66,730/- under the head income from house property and business loss at ₹.43,71,875/ which were set off against rental income, thereby determining total income at ₹.1,94,855/-.
AO observed that the assessee has given on rent its 24 flats owned by it. Assessee claimed that it has rented out one furnished flat to M/s. Anmol Rice Mills Pvt Ltd. and the rent received from them is ₹.60,000/- per month. Further, AO observed that assessee has given on rent 23 unfurnished flats at the same location to its related sister concern M/s Lalco Services Apartment LLP at the rate of ₹.25,000/- per month.
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