ITAT Allowed Deduction of Municipal Taxes on Area Not Leased Out

Dream Motels (P) Ltd. Vs ITO (ITAT Mumbai) The issue under consideration is whether treating municipal taxes paid is considered as a part of rent liable to be taxed u/s 23 of the act? ITAT states that, upon due consideration of factual matrix, the crystal-clear position that emerges is the fact that as per the terms of lease and license agreement, the licensee alone was liable to pay all taxes / outgoings with respect of leased premises. However, the same could be paid by the assessee and the same were reimbursable by licensee. This position has also been reiterated by the assessee in its subm...