Annual value under sections 22 and 23 turns on rent receivable, and upheld lease findings controlled the ownership inquiry.

For computing annual value under sections 22 and 23 of the Income-tax Act, 1961, the decisive factor is the rent receivable from the property, not the amount actually received by the assessee. The High Court also upheld the Tribunal's finding that the leases in favour of Peekay Management were not genuine, rejecting the challenge that the finding was perverse or based on non-consideration of material. On those findings, Peekay Management was not treated as the owner for section 22 and 23 purposes, and the assessee remained the relevant owner.

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Issues: (i) Whether the Tribunal's finding that the leases in favour of Peekay Management were facade and not genuine was vitiated by non-consideration of relevant material and was perverse. (ii) Whether, in determining the real annual value under sections 22 and 23 of the Income-tax Act, 1961, the rent actually received by the assessee or the rent receivable had to be taken into account. (iii) Whether Peekay Management or the assessee was the owner for the purposes of sections 22 and 23 of the Income-tax Act, 1961.

Issue (i): Whether the Tribunal's finding that the leases in favour of Peekay Management were facade and not genuine was vitiated by non-consideration of relevant material and was perverse.

Analysis: The finding on genuineness of the leases was examined in the light of the earlier decision of the same court on the assessee's case. The court found no reason to disturb the Tribunal's conclusion and did not accept the challenge based on perversity or omission to consider material facts.

Conclusion: The issue was answered in the negative and in favour of the Revenue.

Issue (ii): Whether, in determining the real annual value under sections 22 and 23 of the Income-tax Act, 1961, the rent actually received by the assessee or the rent receivable had to be taken into account.

Analysis: The court held that for the purpose of computing annual value, the decisive factor is the rent receivable and not the amount said to have been actually received by the assessee. The computation under sections 22 and 23 therefore had to proceed on the basis of the rent which the property could reasonably fetch.

Conclusion: The issue was answered in favour of the Revenue.

Issue (iii): Whether Peekay Management or the assessee was the owner for the purposes of sections 22 and 23 of the Income-tax Act, 1961.

Analysis: In view of the answers on genuineness of the leases and the basis of annual value, the court accepted that Peekay Management was not the owner for the purposes of sections 22 and 23 and that the assessee remained the relevant owner.

Conclusion: The issue was answered in the affirmative and in favour of the Revenue.

Final Conclusion: The reference was answered wholly against the assessee and in favour of the Revenue, with no order as to costs.

Ratio Decidendi: For computation of annual value under sections 22 and 23 of the Income-tax Act, 1961, the relevant criterion is the rent receivable from the property, and a finding on the genuineness of a lease, once upheld, governs the ownership inquiry for that purpose.

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