2004 (2) TMI 649

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....been let out an annual rent of Rs. 60,000 to M/s. Matsya Metal Udyog Pvt. Ltd. In the earlier years the shareholders of the two companies were different but during the previous year relevant to assessment year 1992-93 the same family or group of persons were controlling both the concerns. No written agreement for rent has been executed between the parties. The Assessing Officer being of the view that in case the property was let out or offered for tenancy to out side party, this would fetch much higher rent, having regard to the size of the plot having area of 1971 sq. yds. and covered area of 7628 sq. ft. in a prime industrial area. The tenant have also given security of Rs. 14,35,000 on 27-3-1992 immediately before the close of the year. ....

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....essee contends that there is no justification to enhance the income of the assessee company by the notional amount of interest more particularly when the revenue has already admitted the same amount of rent from the same tenant in earlier years assessments. It was further contended that the property already being under tenancy at the beginning of the assessment year cannot be expected to let from year to year at any figure higher than the rent which has actually been produced by the property under considerations. For such a view reliance has been placed on the Hon'ble Calcutta High Court decision in CIT v. Kishanlal & Sons (Udyog) (P.) Ltd. [2003] 260 ITR 481. Reliance has also been placed on another decision in the case of CIT v. Satya Co.....