Annual value of controlled property must follow standard rent, not actual rent, under house property assessment rules.

For assessment of income from house property under section 22, the annual value of a controlled property is to be determined by reference to the standard rent determinable under the Delhi Rent Control Act, 1958, not by the actual rent received. The position remains the same even where standard rent has not been fixed by the Controller and the period for seeking fixation has expired. The Supreme Court treated this as settled law and held that the High Court should have called for a reference. The question of law was answered in favour of the assessee on the basis that standard rent, not actual rent, governs annual value.

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Issues: Whether, for the purpose of assessment of income from house property under section 22, the annual value of the assessee's house was to be determined on the basis of the actual rent received or with reference to the standard rent determinable under the Delhi Rent Control Act, 1958.

Analysis: The question had already been settled by the Supreme Court's earlier decision that, even where standard rent had not been fixed by the Controller and the limitation period for seeking fixation had expired, the annual value of a controlled property is governed by the standard rent determinable under the rent control law and not by the actual rent received. The High Court's refusal to call for a reference was therefore erroneous, and the question of law was answered consistently with that settled principle.

Conclusion: The annual value had to be taken as the standard rent determinable under the Delhi Rent Control Act, 1958, and not the actual rent received; the issue was decided in favour of the assessee.

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