ASSTT CIT Vs. SARDAR DAVINDER SINGH KOHLI

JUDGEMENT

(1.) These are the three appeals filed by the revenue for the assessment years 1992-93, 1993-94 and 1994-95. As the issue involved in all the three appeals are common the same are disposed of by this consolidated order.

(2.) The grounds of appeal taken in this appeal are :

(3.) We have heard the rival submissions and perused the orders of both the lower authorities in the light of the materials available on record. Briefly the relevant facts of the case are that the assessee owned a commercial property consisting of godown at basement, ground floor and first floor. The assessee had shown income from storage charges received from sundry parties for letting out of the basement as "income from other sources" and claimed therefrom various expenses incurred as deduction while computing the total income. The expenses also includes interest of Rs. 43,077 payable to M/s. Debidutt Poddar Sons. Loan originally taken from M/s. Debidutt Poddar and Sons for acquisition of the aforesaid property was Rs. 1,50,000 only and the above interest of Rs. 43,077 includes interest on interest. According to the assessing officer, the income from letting out of the aforesaid property is to be assessed under the head "income from house property". The assessing officer also observed that no income was shown by the assessee from the ground floor and the first floor. She estimated the annual rateable value of the whole property at Rs. 1,20,000 and the same being more than storage charges received by the assessee, she took the annual value of the property at Rs. 1,20,000 and accordingly computed the income under the head "income from house property". In computing the said income, as the loan taken for acquisition of the property was Rs. 1,50,000 and hence she allowed interest on original borrowing of Rs. 1,50,000 only as deduction under section 24 of the Act. Thus, a portion of the interest payable to Messers section Debidutt Poddar Sons and other relevant expenses as claimed by the assessee was disallowed. In appeal, the Commissioner (Appeals) has observed that the annual value of the property taken by the assessing officer at Rs. 1,20,000 was without any basis and further the assessing officer has not made any enquiry to ascertain whether the charges received by the assessee was storage or rental income. In view of this he directed the assessing officer to accept the income of storage charges as shown by the assessee and to allow interest and other relevant expenses as claimed. Thus, the Commissioner (Appeals) directed the assessing officer to assess the storage income under head income from other sources". Being aggrieved by this order, the revenue is in appeal before us on the ground stated hereinabove.