Law:

Section:

I. Section 22 of the Income-tax Act, 1961 - Income from house property - Chargeable as - Assessment years 1996-97 to 2000-01 - In respect of premises leased out by assessee, maintenance and other charges paid by assessee were to be deducted from rent while computing annual letting value of said property [In favour of assessee] The assessee had leased out its premises to five tenants. Lease agreements were entered into in this behalf wherein rent to be received by the assessee from those tenants was specified. The tenancies became operative with effect from October, 1992. However, dispute arose about payment of the said rent. Said premises were in a multi-storey building and maintenance charges were payable by the occupier to the agency/builder maintaining the building. The tenants claimed that the rent payable by them to the assessee included maintenance charges and, therefore, it was the obligation of the assessee to pay the maintenance charges. The assessee, on the other hand, wanted these tenants to pay the maintenance charges exclusive of contractual rent. Because of this dispute, the tenants filed a suit in Small Causes Court for fixation of standard rent. In that case, the Small Causes Court passed an interim order in 1994 fixing the rent at Rs. 30,000 per month, which was less than the contractual rent agreed upon between the parties in the rent agreement. Since the rent was fixed on lump sum basis at Rs. 30,000 per month, the assessee had to pay the maintenance charges, which were claimed as deduction. The Assessing Officer disallowed the claim on the ground that as per the lease agreement these maintenance charges were to be borne by the tenants. The Commissioner (Appeals), however, allowed this claim which view of the Commissioner (Appeals) was affirmed by the Tribunal as well. Held that since the maintenance and other charges were paid by the assessee, it was rightly held to be deductible from the rent while computing the annual letting value. II. Section 25B of the Income tax Act, 1961 - Income from house property - Arrears of rent received - Assessment years 1996-97 to 2000-01 - Arrears of rent relating to earlier years received by assessee in…

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