Annual letting value based on actual rent where family letting was bona fide and municipal valuation did not override agreed rent.

Annual letting value was held to be based on the actual rent received from letting the first and second floors to the assessee's sons, because there was no definite finding that the arrangement was collusive or lacking bona fides. The municipal valuation did not displace the agreed rent on the facts, and the actual rent was treated as the reasonable rent at the relevant time. The reasoning also noted that agreed rent may represent standard rent in the initial period under rent control principles, so rent below municipal valuation was not, by itself, sufficient to substitute a higher notional value.

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Issues: Whether the annual letting value of the property was to be determined on the basis of the actual rent received from letting to the assessee's sons, or on the basis of the higher municipal valuation.

Analysis: The assessee had let out the first and second floors to his sons at stated monthly rents. The lower authorities differed on whether the municipal valuation should govern the annual letting value, but the record did not contain a definite finding that the letting arrangement was collusive or lacked bona fides. In the absence of such a finding, the actual rent received was treated as the reasonable rent at the relevant time. The reasoning also noted that agreed rent could represent standard rent for the initial period under rent control principles, and the actual rent was not displaced merely because it was below municipal valuation.

Conclusion: The annual letting value was correctly determined on the basis of the actual rent received, and the revenue's challenge failed.

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