House property income must be based on rent receivable from the tenant despite routing through an intermediary firm.

Annual value of house property must be computed on the rent receivable from the tenant where the assessee remains the owner and real landlord. An intermediary firm routed part of the rent, but that arrangement did not alter the legal relationship between owner and tenant or justify ignoring the rent actually payable for the letting. The issue was computation of property income under section 23 of the Income-tax Act, not benami ownership. On these facts, the tenant's rent was the amount receivable by the owner, so the income could not be reduced merely because part of it passed through another entity.

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Issues: Whether the property income from the building had to be assessed on the actual rent received by the assessee-landlord or on the higher amount received by the intermediary firm, and whether the interposition of the firm could alter the annual value of the house property.

Analysis: The assessee remained the owner and the real landlord of the premises, while the tenant continued in occupation of the property. The arrangement with the intermediary firm did not change the legal relationship between the owner and the tenant, nor did it justify ignoring the rent actually payable by the tenant as consideration for the letting. The question was one of computation of property income under section 23 of the Income-tax Act, 1961, and not one of benami ownership. On the facts, the rent paid by the tenant was the rent receivable by the owner, and the amount could not be reduced merely because part of it was routed through another entity.

Conclusion: The annual value had to be computed on the higher rent receivable from the tenant, and the assessee's challenge failed.

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