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Case Law Details

Case Name : Rockcastle Property Private Ltd Vs ITO (ITAT Mumbai)
Appeal Number : I.T.A. No. 7377/Mum/2018
Date of Judgement/Order : 18/05/2021
Related Assessment Year : 2012-13
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Rockcastle Property Private Ltd Vs ITO (ITAT Mumbai)

As per the provisions of Section 23(1)(b), annual value shall be deemed to be the actual rent received or receivable by the assessee. The proviso provides for deduction of municipal taxes levied by any local authority. As per Explanation, the actual rent received or receivable would not include the amount of rent which owner could not realize. We find that the statutory provisions are quite clear and provide for deduction of only specified items i.e. taxes paid to local authority and the amount of rent which could not be realized by the assessee, from the expression ‘actual rent received or receivable’. No other deduction is permissible. Allowing the other deduction would amount to distortion of the statutory provisions and such a view could not be countenanced. To accept the plea that rent which actually goes into the hands of the assessee is only to be considered, would enable the assessee to claim any expenditure from rent actually received or receivable since the same would ultimately reduce the amount which actually goes into the hands of the assessee. The same is not the intention of the legislatures. The statutory provisions, as noted earlier, provide for deduction of specified items only.

Proceeding further, we are of the considered opinion that the ‘society maintenance charges’ as paid by the assessee, by no stretch of imagination, could be held to be taxes paid to local authority.

When Income is calculated under the head House Property, then besides statutory deduction of 30% u/s 24, an assessee is entitled only for deduction with respect to taxes levied by any local authority. Therefore, society maintenance charges levied by the Society which is not a local authority are not at all allowable to the assessee. Therefore, we held so and accordingly, maintenance charges are not allowable under the head ‘Income from House Property’.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

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