TaxTMI 
TaxTMI 
2013 (7) TMI 318
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....ce received cannot be added to the actual rent paid, but the annual rental value has to be determined independently. 2. The assessee, for the assessment years 1998-99 and 1997-98 respectively has disclosed the lease rent income of Rs.6,00,000/-. The assessee had received Rs.80,00,000/- as lease rent deposit. The Assessing Authority held that the interest on deposit should be taken into account for computation of the rent received by the assessee. Therefore, he assessed the annual letting value of Rs.20,40,000/- which includes notional interest in respect of the deposit of Rs.80,00,000/-. The assessee preferred appeals before the Commissioner of Income Tax (Appeals) in respect of the assessment years 1998-99 and 1997-98, who in turn dismiss....
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....the annual letting value of the property under Section 23 of the Income Tax Act, 1961.?" 7. Section 23 reads as under: (1) For the purposes of section 22, the annual value of any property shall be deemed to be - (a) the sum for which the property might reasonably be expected to let from year to year; or (b) 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 referred to in clause (a), the amount so received or receivable; or (c) where the property or any part of the property is let and was vacant during the whole o....
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....asonably be expected to be let from year to year and the higher of the two is to be taken as the annual letting value. If the rent actually received is more than that, that sum shall be treated as income from house property. On the other hand, if it is less than the amount at which the property can reasonably be expected to be let from year to year, the amount determined under clause (a) shall be the income from house property. The operative words in section 23(1)(a) of the Act are "the sum for which the property might reasonably be expected to be let from year to year." These words provide a specific direction to the Revenue for determining the fair rent. The Assessing Officer, having regard to this provision is expected to m....