Tribunal decision favors assessee in interest assessment & rental value determination, citing consistency & legal support.

The Tribunal allowed the appeal of the assessee regarding the assessment of interest and determination of annual rental value. The decision emphasized consistency, legal precedent, and acceptance of the Municipal Corporation's rateable value for property assessment. The appellant's interest claim of Rs.30,000 was allowed, citing consistency and legal support, despite the Assessing Officer's disallowance. The Tribunal directed the Assessing Officer to accept the income returned by the appellant for the vacant flats, Capri and Kodinar, based on the Municipal Corporation's rateable value.

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Issues involved: Assessment of interest under section 57(iii) of the Income Tax Act, 1961 and determination of annual rental value under section 23(1)(a).

Assessment of interest:
The appellant claimed interest payable of Rs.30,000 from the interest received on FD, savings bank interest, and interest from ICICI Safety Bonds. The Assessing Officer disallowed the interest claim as the nexus between the expenditure and income was not proven as required under section 57(iii) of the Act. The appellant argued for consistency based on past practice and legal precedent, citing the Karnataka High Court judgment. The Tribunal allowed the interest claim of Rs.30,000, emphasizing the importance of consistent practice and legal support for the appellant's claim.

Determination of annual rental value:
The appellant owned three flats, with two remaining vacant. The Assessing Officer determined the fair market rent based on Times of India reports, which the appellant contested. The CIT(A) upheld the Assessing Officer's decision, stating the appellant did not make efforts to let out the properties. The Tribunal, considering previous decisions, ruled in favor of the appellant, stating that the Municipal Corporation's rateable value should be accepted as the annual letting value. The Tribunal directed the Assessing Officer to accept the income returned by the appellant for the vacant flats, Capri and Kodinar.

Conclusion:
The Tribunal allowed the appeal of the assessee concerning the assessment of interest and determination of annual rental value, emphasizing the importance of consistency, legal precedent, and acceptance of Municipal Corporation's rateable value for property assessment.

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