Case Law Details
RELEVANT EXTRACTS:
5.1 The Act mandates a particular head for each type of income, so that the same has necessarily to be assessed under the said head and in the manner provided under the relevant Chapter. As such, the assessee’s contention of being contractually obliged to bear the said expenditure under the relevant (rent) agreement would be of no moment; the assessee being entitled to claim only the deductions as enumerated u/s. 24 of the Act in the computation of its income asses sable u/s. 22.
5.2 So however, we find merit in the assessee’s second plea. This is as what section 22 attempts to assess is the annual value of the property consisting of any building or land appurtenant thereto, of which the assessee is the owner, and which has not been put to use for the purposes of its business or profession by it. The rent being charged by the assessee, if so, is only a surrogate measure of the said annual value. The expenditure on the aforesaid items, i.e., the salary (including bonus) to the maintenance staff of the facilities as electric motors, lift, cleaning, etc.. as well as that on the electricity consumed in respect of any common area and the electric motors, is not attributable directly to the house property as such, but to its enjoyment by the tenant/users thereof. In a given case it may well be that the said expenditure is incurred by the tenant or tenants (collectively) , with the land-lord having no locus standi or role therein, so that who incurs the same in the first instance, is only a matter of mutual arrangement or convenience and, thus, of no consequence where the bona fides thereof are, as in the present case, not in doubt. The rent being charged by the assessee, which represents the measure of its annual value, would, being only decided under the said arrangement, in such a case, stand correspondingly reduced. As such, though the assessee, being entitled only to ;he deductions in respect of the said expenditure in the computation of ;he income under the said head of income only in terms of its provisions, would not be entitled to the impugned deductions, we consider that the annual value of its house property be assumed at the reduced value, i.e., after deducting the impugned amounts (from the rental), being only in relation to the expenditure required to be necessarily incurred for the enjoyment user of the relevant property and, therefore, can only be considered as having been included at the said amount, i.e., at cost, by the two parties in he reckoning/determining of the same (rental). We decide accordingly.
