INCOME TAX ACT, 1961

Section 24

Income from house property - Disallowance of 30% deduction for repairs under section 24 - Rental income received by assessee -

Assessee was engaged in the running of a Five Star Hotel and was also carrying on investment and consultancy business. AO observed that the assessee had shown gross rent from house property and had claimed deduction for repairs at the rate 30%. AO noted that assessee had entered into a service agreement for letting out of a commercial center. AO further noted that the agreement included service charges also and that benefit of 30% of deduction was allowable only in respect of rental receipts. AO had held that the benefit of deduction would not be available in respect of service charges and made a disallowance. Held: The issue in respect of disallowance pertaining to income from house property is identical to earlier assessment years and there being no change in facts and circumstances. Identical issue was decided in favour of assessee and against the revenue in earlier orders of the Tribunal for assessment years 2001-02, 2002-03 & 2003-04. No contrary material or any higher Court's orders have been placed on record to show that such earlier orders of Tribunal have been reversed by any higher forum. Therefore, following the precedents in assessee's own case in Asstt. CIT v. Sunair Hotels Ltd. [ITA nos. 4450 & 4451/Del/2012, dt. 29-5-2015], AO was directed to delete the disallowance.

Followed:Asstt. CIT v. Sunair Hotels Ltd. [ITA nos. 4450 & 4451/Del/2012, dt. 29-5-2015] and Sunair Hotels Ltd. v. Addl. CIT [ITA No. 2729/Del/2010, dt. 20-8-2010].

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2006-07

INCOME TAX ACT, 1961

Section 37(1)

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