TaxTMI 
TaxTMI 
2005 (7) TMI 576
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....ssessment year 1991-92 and the first ground of appeal in assessment years 1992-93 and 1993-94 raised by the revenue is regarding direction of the CIT(A) who has erred in directing the Assessing Officer to accept Rs. 7,000 as income from property of Prithvi Apartment as against Annual Value determined at Rs. 13,65,475 by the Assessing Officer. 3. The facts of the case are that during the year under consideration the assessee had purchased a flat at Prithvi Apartment, Altamount Road measuring 2242 Sq.ft. for a total consideration of Rs. 1 crore from Mr. M.B. Kapadia. The assessee leased out the said flat to M/s. Oman International Bank on leave and license basis on monthly lease rental of Rs. 7,000 with effect from 1st day of October, 1990. ....
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....ase of CIT v. Prabhavati Bansali [1983] 141 ITR 419 and decision of Hon'ble Bombay High Court in the case of M.V. Sonawala v. CIT [1989] 177 ITR 246 held that the assessee was not looking for a higher rent but was interested in accretion of value, and the said rent of Rs. 7,000 was directed to be adopted for working out the annual letting out value. 5. Revenue is aggrieved and hence this appeal. 6. The Ld. Departmental Representative placed strong reliance on the order of the Assessing Officer and argued that the assessee had purchased the property for about Rs. 1 crore during the year and gave the same on Leave licence basis to M/s. Oman International Bank on a monthly lease of Rs. 7,000 which is very less as compared to the return on th....
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.... Court had considered the provisions of Bombay Municipal Act before deciding the issue of determination of annual letting value. He placed reliance on the decision of Jurisdictional High Court in the case of M.B. Sonawala (supra). He also relied on the decision of Mumbai Bench of the Tribunal in the case of Bhargava Estates P. Ltd. in IT Appeal Nos. 2242 and 2203 (Mum.) of 2001 for assessment years 1996-97 and 1997-98 dated 18th July, 2002, wherein on similar facts the Tribunal has held that the rateable value determined by the Municipal authorities should be adopted as the ALV of the property. 8. We have heard the rival submissions and perused the material on record. During the course of assessment the Assessing Officer has not brought on....
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.... has to be computed on the basis of the sum for which the property might reasonably be let from year to year or the annual municipal rateable value." A similar view has been taken by Mumbai Tribunal in the case of Bhargava Estates P. Ltd. (supra). 9. The assessee has filed a certificate from Prithvi Apartment Co-operative Hsg. Society stating that the annual value of the flat is Rs. 10,875 but no corresponding documents from the Mumbai Municipality has been filed on record. Following the decision of Hon'ble Supreme Court and the High Courts of Calcutta and Bombay, we agree that for determining the annual value of property, the adoption of Municipal Rateable Value is the correct method and in cases where the actual rent received is higher ....
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....on emergency basis at a higher rate of interest but the utilization of the same for advancing the loan is not established. 13. The revenue is aggrieved and hence this appeal. 14. The Ld. Departmental Representative submitted that the assessee is a sharebroker and has borrowed interest bearing funds at the rate of 24 per cent and 30 per cent and advanced loans to its sister concern at the rate of 18 per cent. He placed strong reliance on the order of the Assessing Officer and pointed that even before the CIT(A) no explanation has been filed to prove that the loans advanced during the year are not out of borrowed funds obtained at high rate of interest. The Ld. Authorised Representative submitted that the assessee has not only obtained loan....