Mr Chan owns a residential flat in Hong Kong which was let to Mr Lee who failed to pay rent from October $2019$ onwards. Mr Chan regained possession of the flat on $1$ April $2020.$

The flat was vacant until $1$ September $2020$ when Mr Chan entered into a five year lease agreement with Mr Lai on the following terms:

Lease duration: $1$ September $2020$ to $31$ August $2025$

Rent: $$12,000$ per month

Management fee: $$1,500$ per month payable by Mr Lai direct to the property management company

$,$ Lump$-$sum premium payable on $1$ September $2020$: $$360,000$

Rates were payable by Mr Chan. The amounts of rates paid by Mr Chan during the periods of letting were $$2\mathrm{.}000$ and $$3\mathrm{.}000$ for the years of assessment $\frac{2020}{21}$ and $2021/22$ respectively.

On $1$ March $2021,$ the Assessor wrote to Mr Chan advising him that he was satisfied that rents amounting to $$80,000$ which had previously been assessed in the $\frac{2019}{20}$ assessment had now become bad. $$30,000$ of this amount was eventually recovered in March $2022.$

Required:

$($a$)$ Compute the property tax liabilities of Mr Chan for the years of assessment $2020/21$ and $\frac{2021}{22}.$ Show all your workings and ignore provisional tax.

$(14$ marks$)$

$($b$)$ Comment on the tax treatment you have accorded to the various items mentioned in the question.

$(6$ marks$)$