Rent control and standard rent govern house-property valuation; disputed rent is taxed on receipt under special provisions.

For property covered by rent control legislation, annual value cannot be fixed above standard rent, and disputed rent cannot be extrapolated from an isolated determination relating to another portion of the property. The Tribunal also noted that disputed receipts and arrears are taxable only in the year of receipt under the special house-property provisions governing unrealised rent and arrears. Applying the rule of consistency, it followed the earlier coordinate Bench view in the assessee's own case and found no basis to depart from that approach for the relevant assessment years.

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Issues: Whether the addition made towards deemed rental income from house property was sustainable, and whether the rental receipts were taxable in the year of receipt at the standard rent under the Rent Control regime.

Analysis: The Tribunal followed the co-ordinate Bench decision in the assessee's own case for earlier assessment years. It held that, where the property was covered by rent control legislation and there was a dispute regarding rent and recovery, the annual value could not be extrapolated on the basis of an isolated court determination relating to a different portion of the property. The Tribunal accepted that the income from the disputed receipts was chargeable only in the year of receipt under the special provisions governing unrealised rent and arrears, while the remaining tenanted properties were to be assessed at the standard rent under the applicable rent control law. Applying the rule of consistency, the Tribunal found no basis to depart from the earlier coordinate Bench view.

Conclusion: The addition towards deemed rental income was not sustainable and the rental income had to be recomputed in accordance with the earlier Tribunal decision; the issue was decided in favour of the assessee.

Final Conclusion: The revenue's appeals failed, and the assessment was to be aligned with the coordinate Bench's earlier ruling on house property income and receipt-based taxation of disputed rent.

Ratio Decidendi: For property governed by rent control law, annual value cannot exceed standard rent, and disputed rent or arrears is taxable in the year of receipt under the special house-property provisions.

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