2013 (12) TMI 1386

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....sed by the Revenue in both the appeals relate to the decision of the Ld.CIT(A) as to the determination of annual letting value u/s 23(1)(a) of the Income Tax Act. 3. Briefly stated, the relevant facts are that the assessee had given its commercial premises admeasuring 8118 sq.ft in 'sheth house', situated at Dr. V.B. Gandhi road, Mumbai-23 to M/s Reliance Industries Ltd. for a monthly rent of Rs.30,000/-. Besides the monthly rental, the licensee had also paid a sum of Rs.5,25,00,000/- as interest free deposit to the assessee. Assessee, in its return of income had declared Rs.3,60,000/- as ALV of the property considering the fact that the actual rent received (i.e. Rs.30,000/- per month) was more than the municipal value i.e., Rs.39,576/-....

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....her decisions of various High Courts on the issue and hence the Ld.CIT(A) is not correct in following the decision of the Tribunal in the assessee's own case for the Assessment Year 2005-06. On the other hand, the Ld.AR of the assessee has reiterated the same submissions made by the assessee before the lower authorities and drawn our attention to various decisions of the Tribunal and High Courts mentioned and attached in the compilation which forms part of the record. 5. We have heard both the sides and perused the material on record. It is not disputed that the assessee has shown the actual rent which is more than the municipal value. The actual rent declared by the assessee (Rs.30,000/- per month) is more or less ten times higher than ....

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....year to year" used in section 23(1)(a). The same proposition is supported by various decisions of the Hon'ble Bombay High Court. 5.2 As regards the decision of the Delhi High Court in the case of CIT Vs. Moni Kumar Subba (supra) relied on by the Ld.AR, it is relevant to state that the issue raised before the High court pertains to the validity of determining the ALV by adding notional interest on the interest free deposit, which the Court has held as not permissible. In this context, the High Court in the said decision has observed that the annual value fixed by the Municipal Authorities can be a rationale yardstick. However, it would be subject to the condition that the annual value fixed bears a close proximity with the assessment year....