1985 PLP (Trib (PTD)

3. Mr. I Adv., appearing for the respondent, however, supported the order of learned Appellate Assistant Commissioner he contended that all the expenses claimed by the respondent were necessary for the upkeep and maintenance of the property hence, were liable to be deducted from the annual value which is to be determined under section 19(1)(b) of the Ordinance. Relying upon (1951)` 20 ITR

160. Janda Das Pra Bas v. C.I.T. Mr. I , the learned Advocate for the respondent argued that the actual value might be more or less than the actual rent received.

4. I have heard both the learned representatives at length and have also perused both the assessment as well as the impugne orders. The learned Appellate Assistant Commissioner has allowed the expenses for the assessment year 1979‑80 .on the ground that they are necessary and incidental to upkeep of the property. The learned Appellate Assistant Commissioner made the following observation: "The contention of the learned Authorised Representative is correct. The appellant owns Z ....M.... and in order to run the whole business he has to incur certain expenses which are necessary and incidental to upkeep of property and hence, the expenses shall be allowed in full in the .case of salary to care taker, salary to sweeper and salary to. electrician. The dis allowance of sundry goods, will be limited only to Rs.1,500."

5. However, in his same order regarding assessment year 1980‑81 the learned Appellate Assistant Commissioner made the following obser vation : "This year the Income‑tax Officer fully disallowed the expenses claimed under tenants burden for being inadmissible under section 20 of the Income‑tax Ordinance. As discussed above the expenses have to be allowed being necessary charge against income and hence, the Income‑tax Officer is directed to allow the expenses as follows: Electricity, salary to electrician, salary to care‑taker and salary to sweeper will be allowed in full and out of sundry goods Rs.1,000 will be allowed."

6. Dealing with assessment year 1981‑82 the learned Appellate Assistant Commissioner has this to say: "As discussed above, the claim on account of electricity charges and sanitary charges will be allowed in full and the salary of sweepers, electrician and care‑taker will also be allowed. Repairs should be allowed at 1/6th on actual rent collection plus deemed income from rent."

7. From perusal of the observations of the learned Appellate Assistant Commissioner as reproduced above, it appears that in the assessment year 1979‑80 the claim of electricity was not made and he did not allow it. Again, in assessment year 1979‑80 and 1980‑81 a claim for sundry goods was made which was partly allowed by the learned Appellate Assistant Commissioner. Thus, in the assessment year 1979‑80 no electricity claim was made by the respondent and in 1981‑82 the learned Appellate Assistant Commissioner has no disallowed anything claimed on account of sundry charges. Moreover, in assessment year 1981‑82 he also allowed a deduction on account of repairs which is admissible under section 20(1)(a) of the Ordinance. Mr. F.... the learned Departmental Representative, was of the view that if any finding of learned Appellate Assistant Commissioner regarding assessment year 1979‑80 and 1980‑81 are allowed to stand alongwith his findings recorded in assessment year 1981‑82, which have been reproduced earlier, the respondent would get double benefit. He therefore, submitted that the only deduction, which fell within the definition of "repairs" should be allowed.

8. I have given my anxious consideration to the facts and circum stances of the case as well as the submissions made at the Bar. It is 'true that under section 20 (1)(a) of the Ordinance, a property‑owner has been allowed deduction in respect of repairs but the word "Repair" is restricted irt its meaning. In (1953) 1 MLR 906 Day v. Haflani, the word "repair." has been interpreted to mean "to remedy defects or put back into good condition something that, having been in good condition has fallen into bad condition". The same definition has also been adopteti in other cases, for example in (1936) 1KB 669 Grec v. Flaque: From Pakistani jurisdiction PLD 1965 Kar. 442 Mohammad Sidik Shan v . Mohammad Ishak can be cited in which the same definition has been reiterated. Let me mention at this stage that word "repair" has been used in various Rent Legislations and has been coming before Courts for interpretation from time to time. In this connection I may refer to section 12 of the West Pakistan Urban Rent Restriction Ordinance, 1959, and section 12 of the Sind Rented Premises Ordinance, 1979.

9. Be it as it may, one thing is clear from the definition of th word "repair" that there would be a defect which requires to be corrected. However, there might be cases where no defects exist yet I property‑owner has to incur expenses as per agreement entered into with his tenants. Mr. Ishratullah, the learned Advocate for the respondent cited such examples: According, to him, the respondent was paying wages to a sweeper whose job is to sweep and clean the floor and passage on either side of which the shops are located and which is frequented by the customers., He further pointed out that the sweeper is also required to keep neat and clean toilets which have been provided by the respondent for the convenience of the tenants as well as their customers. Mr. Ishratullah further stated that the same passage is also electrified and electric lights are for the convenience of the customers as well as the shopkeepers. The learned counsel contended that cleaning of and disinfecting the floor and toilets by the sweeper and switching on the electric lights during the business hours cannot by any stretch of imagination, be treated as repairs. He asked that if the landlord is allowed only that expenses which he incurs on repairs, who would be made liable for the expenses incurred on wages of a sweeper and on electricity bills. The learned counsel, therefore, argued that the learned Appellate Assistant Commissioner was right in taking it to be a necessary charge against income.

10. As far as the payment of the electricity bills and wages to the sweeper are concerned, I think the respondent is entitled to claim them. It is true that section 20 (1)(a) of the Ordinance has allowed deductions only regarding repairs. However, the concept of the charge against income is not foreign to Income‑tax Law and has been time an again pressed into service to meet such situation. It is set up against the annual value. In re: Babulal Raj, Kalia 4 ITR 148, it was held‑ that the bona fide annual value is a question of fact and in determining it all the circumstances of the case must be considered. Similarly, in (1961) 3 Taxation 201 C.I.T. v.. Sital Das Tirathdas the Indian Supreme Court had to make the following observation: "Obligations, no doubt, there are in every case, but it is the nature of the obligation which is the decisive fact. There is a difference between amount which a person is obliged to apply out of his income which by the nature of the obligation cannot be part of the income of the assessee." In Sital Das's case (supra), although the point involved was regarding the charge of the maintenance allowance awarded to the family members of the assessee, yet the 6bservation quoted above, is very pertinent. Thus, I am in respectful agreement with the learned Appellate Assistant Commissioner when he says that these expenses are necessary and incidental to upkeep of property. I also agree with him when he says that they should be allowed being necessary charge against income. However, with due respect to him I think, that his observations should be confined only to electricity charges and wages of the sweeper.

11. Now as regards the salary paid to the electrician and care‑taker as well as the amount spent on sanitary goods I think, with due respect to learned Appellate Assistant Commissioner, that the contention of Mr. M F the learned Departmental Representative has much force. The electrician and the care‑taker are paid wages for "repairs". The job of the electrician must be to rectify the defects which cropped up in the electrical wiring ‑or the matter connected with the electric supply. Similarly, the job of the care‑taker should be to keep a watch on the maintenance and upkeep of the property and point out or rather carry out the repairs as and when anything is damaged. Similarly, any amount spent on sanitary goods is apparently an amount spent on repairs of the toilets. Thus, the amount spent on all three items is an amount spent regarding the repairs of the property. Let me emphasise that' the words used in clause (a) of subsection (1) of section 20 of the Ordinance are "in respect of repairs". In my humble view any expenses connected with the actual repairs already carried on or antici pated or expected repairs would fall within the folds of the expression "in respect of repairs". It is, therefore, in my view, falling within the ambit of clause (a) of subsection (1) of section 20 of the Ordinance. With due respect I think that both the Income‑tax Officer and the learned Appellate Assistant Commissioner have not approached this question from correct angle. Thus, as far as the claim of respondent regarding electricity and wages paid to the sweeper are concerned, it would be deemed to be necessary charge against income, hence would be allowed against the annual value of the property; but the salary paid to the electrician and care‑taker and the amount spent on sanitary goods would be deemed to be amount spent in respect of repairs. Needless to say that the respondent would be entitled to claim these expenses under clause (b) of subsection (2) of section 19 and clause (a) of subsection (1) of section 20.

12. Before parting with this case let me point out that the Department has assailed the finding of the learned Appellate Assistant Commissioner regarding all three relevant assessment years on the ground that it is contrary to the provisions of section 20(1) of the Income‑tax Ordinance. However, at the fagend of the argument Mr. M F the learned Departmental Representative wanted to amend his memo of appeal regarding assessment year 1979‑80 so as to impugn the finding of learned Appellate Assistant Commissioner whereby he directed the deletion of add backs as ordered by the Income‑tax Officer. The learned Departmental Representative moved an oral application to that effect. Since the amendment sought would substitute altogether a new ground of appeal after the expiry of the period of limitation, I do not think that I would be justified in allowing the application of the learned Departmental Representative at this stage. Moreover, I have discussed in detail the appeal regarding assessment year 1979‑80 and I do not think that any prejudice in going to be caused to the Department. I, therefore, reject the amendment application.

13. All the three appeals stand disposed of as indicated above. M. B. A. Appeal disposed of accordingly.