1984-VIL-64-ITAT-

Equivalent Citation: TTJ 019, 562,

Income Tax Appellate Tribunal GAUHATI

Date: 15.02.1984

INCOME TAX OFFICER.

Vs

VIJAY KUMAR BAWRI.

BENCH

Member(s)  : ANAND PRAKASH.

JUDGMENT

This is a Departmental appeal. The first controversy is with regard to the computation of property income. The assessee claimed deduction for electricity charges and salary of chowkidar, while computing the income from house property. The aforesaid claim was rejected by the ITO on the ground that it was not permissible under any of the clauses of s. 23 or s. 24 of the IT Act, 1961. The AAC, however, allowed the said expenses on the short ground that the ITO gave no reasons, while making the aforesaid disallowances.

2. The Department is aggrieved of the aforesaid treatment by the ld. AAC of the problem posed to him by the assessee. It is pointed out by the ld. Departmental Representative that the ld. AAC has to decide the question in accordance with law, whether or not the ITO gave reasons for his action. The ITO might not have given any reason for not accepting the above claim of the assessee, because they were prima facie not in accordance with the provisions of s. 23 and s. 24. If the ld. AAC directed the allowance of the said expenses, he should have indicated the provisions of law under which he was allowing the same. This could hardly be a reason to allow an expenditure that the ITO had disallowed it without assigning any reason. Under the law, according to the ld. Departmental Representative, the assessee’s claim was no tenable. There was no provisions in either s. 23 or s. 24 of the IT Act, 1961, which permitted deduction for electricity charges and for salary paid to the chowkidar. In support of his claim, the ld. Departmental Representative also relied on the decision of the Tribunal in I.T.A. Nos. 31 (Gau) to 36 (Gau) of 1981, dt. 2nd Sept., 1983. The Tribunal held on identical facts in the above appeal that the claims in question could not be countenanced in law.

3. The assessee’s ld. counsel supports the order of the ld. AAC and points out that under law the assessee’s claims were tenable and the order of the ld. AAC should not be reversed merely because he had not given proper reasoning for sustaining the assessee’s claim. He filed before us a copy of the assessment order in the assessee’s own case in respect of the asst. yr. 1977-78 wherein the ITO had accepted the assessee’s claim for allowance of electricity charges. The claim for salary was, however, not accepted by the ITO. The assessee’s contention is that the assessee had to employ the chowkidar to look after the Athgaon property as it was situated a little away from the city and some representative of the assessee has to be there to look after the security of the property, which was being used by transports. Even if there be no specific provision under ss. 23 and 24 for making the said allowances, the amount should be allowed to him on general principles.

4. In support of his claim for deduction of electricity charges, the ld. counsel for the assessee stated that the rents, which were being realised by the assessee from his tenants, were inclusive of electricity charges and, therefore, to find out the annual letting value of the property, the electricity charges had to be excluded.

5. The ld. Departmental Representative submits in his rejoinder that the assessee had led no evidence in support of his claim that rents realised from his tenants were inclusive of electricity charges and such a plea of the assessee could not be accepted without evidence. With regard to the salary of the chowkidar, the ld. Departmental Representative submitted that the computation of income from property was notional and it was not based on actual payments. Therefore, unless there was a provision specifically allowing for deduction of the salary of the chowkidar, no deduction could be allowed from the property income on general principles.

6. I have given careful consideration to the facts of the case and the rival submissions. The assessee’s plea that the rents realised by him from his tenants are inclusive of electricity charges appears to be probable. But this claim deserves to be established as a fact by leading cogent evidence. The assessee has not led any such evidence as yet. In the interest of justice, however, I feel that an opportunity should be given to the assessee to establish his claim in this regard. Accordingly, I set aside the orders of the authorities below on this point and restore the matter to the ITO for finding out as to whether or not the rents paid by the tenants were inclusive of electricity charges. If they were inclusive of electricity charges, the plea of the assessee is correct and the annual income from property is then to be determined after excluding the payments for electricity from the gross realisation of rents from the tenants. The fact that the ITO accepted the assessee’s computation while completing the assessment for the asst. yr. 1977-78, does not per se establish the assessee’s claim in as much as the said claim was accepted by the ITO without any enquiry. It is a question of fact as to whether or not agreement of the assessee with his tenants was as he suggests. If is for the assessee to establish that there was such an agreement. For this purpose, it is necessary to enquire into the matter which has not been done by any of the authorities below. The assessment is, therefore, restored to the file of the ITO for doing the needful in accordance with the direction above.

7. So far as the assessees claim with regard to the deduction of the salary of chowkidar is concerned, it is untenable in law. 6% collection charges are paid to an assessee while computing his property income to enable him to meet expenses of the type indicated by the assessee. The computation of the income under the head ‘property’ is not based on actuals. It is a national income which has to be computed in accordance with the various provisions of ss. 23 and 24 of the IT Act, 1961. If the allowance is not mentioned in the aforesaid two sections as deductible while computing the assessee’s income from property, deduction in respect thereof cannot be allowed to the assessee on general principles, as suggested by the assessee. The theory of general principles would be relevant if it is the actual or real income which has to be computed, as in the case of income from business under s. 28. The computation of income under the head ‘Property’ is not of this nature. The assessee’s claim is, therefore, rejected.

8. In the result, I consider this appeal for statistical purposes as partly allowed.

 

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