T.V. Rajagopala Rao, President - (1.) THESE are assessee's appeals for asst. yrs. 1989-90 and 1991-92. Since the assessee is one and the same, and the impugned order passed by the Dy. CIT(A), Vijayawada, dt. 3rd May, 1993, is common from both the years, it is felt that these appeals can be taken up together and disposed of by a common order.
(2.) The claim of the assessee was an individual for both the assessment years. However, the AO determined his status as HUF, for which he followed his assessment order for the asst. yr. 1987-88. The assessee filed returns of income as individual for the asst. yrs. 1989-90 and 1991-92 on 12th July, 1989, and 18th September, 1991, returning total income of Rs. 11,260 and Rs. 48,040, respectively. In the first instance, the returns were processed under s. 143(1)(a) and they were accepted under intimations dt. 5th February,, 1990, and 24th April, 1992, respectively. For asst. yr. 1991-92, even while sending the intimation under s. 143(1)(a), the AO made the following three adjustments : Rs. (1) Deduction claimed towards municipal taxes in 1,190 the absence of evidence (2) Maintenance allowance in the absence of 12,000 evidence (3) Collection charges claimed in the absence 3,896 of evidence Thus, after the above adjustments, the income of the assessee was determined for the asst. yr. 1991-92 at Rs. 66,130. The assessee filed rectification petition under s. 154. In the order under s. 154 dt. 31st July, 1992, for asst. yr. 1991-92, a sum of Rs. 3,896 was allowed as deduction on the ground that details of collection charges were filed by the assessee before the AO. However, with regard to the other two claims, the deductions were maintained on the ground that municipal taxes cannot be allowed as deduction, since the evidence for payment of municipal taxes was purported to have been not furnished and secondly, maintenance allowance cannot be allowed as per the stand taken by the Department in the earlier year. For asst. yr. 1989-90, after sending the intimation under s. 143(1)(a), notice under s. 143(2) was issued and the claim of maintenance, etc. were discussed in detail, in the assessment order framed under s. 143(3) dt. 4th January, 1991. In that assessment, it is stated that the assessee claimed a sum of Rs. 61,000 deductible as maintenance allowance paid by him to his wife Smt. Saraswathi Bai Vyas as per the Court's order. When asked, the assessee stated before the AO that the maintenance amount was paid in pursuance of the Court's order for which a charge is created on the house properties held by the assessee, and the decree passed by the Court reveals this, and, therefore, the said amount is allowable as deduction while computing the house property income in his hands under s. 24(1)(iv) of the Act. In pursuance of the assessee's claim, the judgment passed by the Fifth Additional Judge, City Civil Court, Hyderabad, in O.S. No. 857 of 1978 dt. 24th February, 1986, was filed. A reading of the said judgment would show even as per the AO that the assessee has to pay a maintenance of Rs. 1,500 per month from the date of the suit, viz., 18th October, 1978, to his wife, and it is also ordered and decreed that a charge is created over all the plaint schedule properties. Assessee's wife brought the decree to execution in EP No. 22 of 1987. Thereupon, the assessee took up the matter in appeal before the Andhra Pradesh High Court, and it is said to be pending in CC Appeal No. 39 of 1986. Pending disposal of the appeal, assessee by his petition CMP No. 18497 of 1987 moved the High Court for stay of all further proceedings in EP No. 22 of 1987, and the Hon'ble High Court by its order dt. 22nd March, 1988, granted stay on the condition that the assessee deposits a sum of Rs. 30,000 in the lower Court within two weeks from the date of the order, and a further sum of Rs. 15,000 within two weeks thereof. In pursuance of this order, the assessee deposited the entire sum of Rs. 45,000 on 28th March, 1988. In view of the above, the assessee claimed that he is entitled to deduction of Rs. 61,000 under s. 24(1)(iv) of the Act.
(3.) THE AO felt that the High Court stayed that operation of further proceedings in the EP and that the amounts deposited in pursuance of the High Court's stay order, therefore, were treated as interim payments pending disposal of the assessee's appeal before the High Court. THE AO further stated that the High Court's stay order did not create any charge on the assessee's properties. THE AO further felt that since the Hon'ble High Court stayed the lower Courts decree and its execution, it cannot be regarded that a charge on the assessee's properties is subsisting, to expect the assessee to claim the benefit of deduction under s. 24(1)(iv) of the Act for any payments made during the relevant accounting year. THErefore, the AO concluded that the properties are not subject to any charge as envisaged under s. 24(1)(iv). THE AO further stated that in any view, the assessee is not obliged to pay any further sum beyond what was required by the Hon'ble High Court, viz., Rs. 45,000 pending disposal of the appeal. Even before the AO, an alternative claim was made, namely, that if the payment of Rs. 45,000 made in pursuance of the High Court's order is held to be not allowable, at least the balance of Rs. 16,000 should be allowed inasmuch as it was paid in pursuance of the order of the lower Court. Considering this alternative claim, the AO held that from the records produced before him, it was evident that the assessee was paying Rs. 1,000 per month as per Court's order and it was further stated that from the judgment dt. 24th February, 1986, in O.S. No. 857/78, the wife of the assessee was originally granted monthly maintenance of Rs. 500 in MC 3/75 by the Third M.M. City Criminal Court, Hyderabad. THE said order of the Criminal Court was confirmed by the High Court. As such the maintenance allowance if at all, payable would only be Rs. 500 per month. THErefore, according to the AO, the assessee was obliged to pay only Rs. 500 per month towards maintenance claim of his wife and not Rs. 1,000 per month. Thus, the deduction towards maintenance payment to the wife as per the order of the High Court or as per the order of the City Civil Court were denied, and the total income was computed at Rs. 73,190 after allowing deductions towards municipal taxes, 1/6th for repairs and collection charges.;