TaxTMI 
TaxTMI 
2011 (10) TMI 32
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....sing from the orders passed in the assessment proceedings and penalty proceedings, are as follows:- "1. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in setting aside the order of the Commissioner of Income Tax (Appeals) and directing the Assessing Officer to determine the property income on the basis of actual rent received by her? "2. Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal was correct in law in directing the Assessing Officer to determine the property income on the basis of actual rent received by the assessee and in ignoring the provisions of law as contained in Section 23 (1) (a) of the Income Tax A....
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.... in the Company M/s. Vaish Brothers & Co. Pvt Ltd. After considering these facts and then circumstances of the case, the Assesssing Officer concluded the transactions between the assessee and the company M/s. Vaish Brothers & Company Pvt Ltd., was a collusive transaction with the aim to reduce the tax on the assessee in her individual capacity. The Assessing Officer computed the annual letting value of the property at Rs.14,98,253/- and after allowing allowable deductions/allowances from the annual letting value, the Assessing Officer added 1/2 income from house property at Rs.6,19,423/- to the assessee's income. 3. The assessee aggrieved with the order of the Assessing Officer filed an appeal before the Commissioner of Income Tax....
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....to M/s. Vaish Brothers & Co. Pvt. Ltd., for Rs.5/- per sq. ft per month was further let out by M/s. Vasih Brothers & Co. Pvt Ltd., at a rent of Rs.11/- to Rs.15/- per sq. ft. per month. In these circumstances, it was obvious that the property was let out at lower rate of rent than that would reasonably be expected to be let out. The Assessing Officer, was, therefore, correct on reaching to the conclusion for fixing the income from house property at higher rate. In its order the Income Tax Appellate Tribunal thus has not drawn the natural inference emerging from its own observation from the legal provisions of law. The fact that lessor company had advanced interest free loan to the assessee for the purchase of land and construction of ....
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..... The CIT (Appeals) dismissed the appeal. The ITAT in its order dated 31.10.2001 decided the assessee's appeal by setting aside the order of the CIT (Appeals) and directing the Assessing Officer, to determine the property income on the basis of actual rent received. 6. Sri Shambhoo Chopra, learned counsel for the appellant submits that the Tribunal did not consider the Section 23 (1) of the Income Tax Act 1961, which clearly provides that the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year, or where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum ....
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....4 are decided in favour of the assessee." 8. Sri Ashish Bansal, learned counsel for the respondent-assessee submits that the property was not let out by the Company in the same conditions but was let out by the Company, after modifications to higher rentals. The Company disclosed the income of the house property and has paid tax on it. Any tax paid by the owners on the prospective annual value will amount to double taxation. He submits, relying upon judgement of the Bombay High Court in M/s. Sahney Kirkwood Private Ltd Mumbai Vs. The Additional Commissioner of Income Tax [in Income Tax Appeal No. 1501 of 2007 and other connected matters decided on 29.7.2011], that in the absence of any cogent evidence to show that the transaction ....