TaxTMI 
TaxTMI 
2011 (2) TMI 552
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.... T Act and not on the basis of notional income comparing the same with any other let out property. ii) The ld CIT(A) has also erred in estimating the notional income at Rs. 1,44,000/- of the property not let out comparing with the market rate as against offered by the appellant at Rs. 32,995/- disregarding the provisions of law." 2.1 Facts of the case, in brief, are that the Assessing Officer, during the course of assessment proceedings noted that the assessee had two self occupied properties. The assessee had claimed one property as self occupied property and the value has taken at nil. In the case of second property i.e. Flat no.8, 1st Shamrock, Main Avenue, Linking Road, Near Ram Krishna Mission, Santacruz (W) Mumbai,....
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....02. find that the Assessing Officer has not examined as to whether the amendment has any impact on the said decision of Hon'ble Allahabad High Court (supra). The impugned amendment simply enable the Assessing Officer to ascertain the house property income on other self occupied properties that the on that has been declared by the appellant to be the self occupied property u/s 22 whereas the modalities to compute the house property income are provided in sec. 23 and the decision of Hon'ble Allahabad High Court is on these modalities only that are unaffected by the impugned amendment through Finance Act 2001. The Hon'ble Allahabad High Court found 7% on investment to be the fair return for the house property against the disclosed 3% as fixed ....
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.... orders of the authorities below and the paper book filed on behalf of the assessee. I have also considered the various decisions cited before me. There is no dispute to the fact that the assessee is the owner of two house properties out of which one is self occupied and the other one is lying vacant. There is also no dispute to the fact that the assessee has shown notional annual income of Rs. 2000/- on account of the second flat. There is also no dispute to the fact that the Assessing Officer adopted Rs. 3 lacs as annual rent of the property which was brought down to Rs. 1,44,000/- by the CIT(A) before allowing deduction u/s 22 of the I T Act. It is the submission of the ld counsel for the assessee that charges u/s 22 is not on the market....
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....bhabati Bansali (supra) that standard rent, if it does not exceed the municipal valuation alone can be adopted in place of municipal valuation. For all the above reasons, we hold that the municipal valuation should be the basis of determining annual value in the present case. Action of the Revenue authorities in adopting annual value on the basis of inquiries conducted regarding market rent in the vicinity of the property is not in accordance with law. The AO is directed to accept the income from house property on the basis of municipal valuation." 7. Respectfully following the decision cited above, I direct the Assessing Officer to adopt municipal value as basis for the purpose of determining the annual value of the property. The....