ITAT decision: Assessing Officer to use municipal rateable value as ALV for self-occupied properties

The ITAT Mumbai allowed the appeal by the assessee concerning the assessment of deemed let out income for self-occupied properties under section 23 of the Income Tax Act. The ITAT directed the Assessing Officer to consider the municipal rateable value as the annual letting value (ALV) instead of the estimated value, leading to the appeal being allowed in February 2011.

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Issues involved: Assessment of deemed let out income u/s 23 of the Income Tax Act for self-occupied properties.

Summary:
The appeal was filed by the assessee against the order of the CIT(A)-26, Mumbai for the assessment year 2006-07. The main ground raised was regarding the notional value of a flat under section 23 of the Income Tax Act. The Assessing Officer observed two house properties owned by the assessee and proposed deemed let out income for one of the properties. The assessee contended that both flats were self-occupied and no addition was necessary.

The Assessing Officer disagreed with the assessee's explanation and deemed one flat as let out property. The CIT(A) upheld this decision, considering the location and rental value of the property. However, the ITAT Mumbai set aside the CIT(A)'s order, directing the Assessing Officer to consider the municipal rateable value as the annual letting value (ALV) instead of the estimated value of Rs. 3 lakhs. The appeal by the assessee was allowed, and the order was pronounced in February 2011.

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