Tribunal directs Assessing Officer to determine flat's letting value based on Municipal Ratable Value

The Tribunal allowed the appeal, directing the Assessing Officer to determine the annual letting value (ALV) of the vacant flat as per the Municipal Ratable Value (MRV), in accordance with previous decisions involving the same assessee and family members. The Tribunal rejected the method of increasing the MRV by 5% annually for determining ALV, emphasizing the need for consistency in ALV determination based on MRV.

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Issues:
- Determination of annual letting value (ALV) of the premises owned by the assessee.

Analysis:
1. The appeal was filed by the assessee challenging the order passed by the Commissioner of Income Tax (Appeals) regarding the determination of the annual letting value (ALV) of the premises owned by the assessee for the assessment year 2010-11.

2. The Assessing Officer initially enhanced the ALV, but the Commissioner (Appeals) restricted it to a lower amount. Both the assessee and the Revenue appealed to the Tribunal, which sent the issue back to the Assessing Officer for fresh adjudication.

3. The Assessing Officer, in the fresh assessment proceedings, determined the ALV based on the rent received by the assessee in a later assessment year, which was contested by the assessee. The Commissioner (Appeals) directed the ALV to be computed based on the Municipal Ratable Value (MRV) increased by 5% annually.

4. The Tribunal noted that the Commissioner (Appeals) had followed his own order in a different case, but disagreed with this method in a consolidated order involving similar disputes. The Tribunal held that the ALV should be determined based on the MRV, as accepted in previous cases involving the same assessee and other family members.

5. The Tribunal emphasized that determining the ALV on an ad-hoc basis by increasing the MRV by 5% annually was not acceptable. It directed the Assessing Officer to determine the ALV of the vacant flat as per the MRV, and if the ALV determined by the assessee was based on MRV, it should be accepted.

6. Therefore, the Tribunal allowed the appeal, directing the Assessing Officer to determine the ALV of the vacant flat as per the Municipal Ratable Value, in line with previous decisions in similar cases involving the same assessee and family members.

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