House property annual value cannot be replaced by higher notional rent when municipal ratable value fairly reflects expected letting value.

In computing income from house property, the Tribunal followed earlier binding decisions and held that, where the property is let out and municipal valuation is available, annual value should be determined by reference to the expected letting value reflected in the municipal ratable value. A higher notional rent could not be substituted for the actual rent received on the facts before it. The addition based on notional rent was deleted, and the assessee's declared house property income based on municipal ratable value was accepted.

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Issues: Whether, for computation of income from house property, the annual letting value of the property should be taken on the basis of the municipal ratable value or on the basis of notional rent higher than the actual rent received.

Analysis: The issue had already been decided in earlier binding decisions followed by the coordinate Bench, holding that where the property is let out and the municipal valuation is available, the annual value is to be determined with reference to the sum for which the property might reasonably be expected to let from year to year. The adoption of a notional rent higher than the actual rent received was therefore not justified on the facts before the Tribunal, and judicial discipline required adherence to the earlier view on the identical question.

Conclusion: The addition made by adopting notional rent was deleted and the assessee's declared income from house property, based on municipal ratable value, was accepted.

Ratio Decidendi: In computing income from house property, where the issue is identical and the municipal ratable value fairly reflects the expected letting value, annual value should not be substituted by a higher notional rent.

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