AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2015 (4) TMI 407
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....o have 1/3rd share in the property. On 29th September, 1986, the Assessee filed return of income at Rs. 979/- in respect of assessment year 1986-87. The Appellant/Assessee also submitted a letter, in which, the computation of income was explained and the same was computed on the basis of rateable value as arrived at by Municipal Corporation of Ahmedabad. It was contended that this rateable value should be adopted for purposes of computing the property income. The Assessing Officer, in his order dated 22nd August, 1988 under section 143(3) of the Income Tax Act, 1961, followed the view taken in the earlier years in respect of the same Assessee to the effect that the annual value should be determined on the basis of the standard rent and not ....
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....s right in law in holding that Annual Letting Value of the selfoccupied property at Ahmedabad has to be the sum equivalent to the Standard Rent under the Bombay Rent Control Act and not the Municipal Rateable value in computing the property income u/s. 23 of the I. T. Act, 1961? 2. Whether on the facts and circumstances of the case the Tribunal was right in law in confirming that the orders of the C.I.T. u/s. 263 of the I. T. Act holding that the original assessment computing property income on the basis of the Municipal Rateable value was erroneous and prejudicial to the interest of revenue?" 5. The Tribunal had proceeded on the basis of decisions in respect of the same Assessee in the previous years. 6. Before us, Mr. Mistrilearned Sen....
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....f Sheila Kaushish vs. Commissioner of Income Tax reported in (1981) 131 ITR 435 that the annual value of the property is required to be determined with reference to standard rent and not the actual rent received. While deciding the said Appeal in M. V. Sonavala's case (supra), the Division Bench of this Court followed a decision of the Calcutta High Court in the case of Commissioner of Income Tax vs. Prabhabati Bansali reported in (1983) 141 ITR 419 and held that for the purpose of computing the annual letting value, sum for which the property might reasonably be let from year to year or the annual municipal value is to be taken. The Division Bench of this Court followed the view taken by the Calcutta High Court and directed the Departm....
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.... the conclusions in the said Full Bench decision are relevant to the facts of the case at hand, which read as under: "(i) ALV would be the sum at which the property may be reasonably let out by a willing lessor to a willing lessee uninfluenced by any extraneous circumstances. (ii) An inflated or deflated rent based on extraneous consideration may take it out of the bounds of reasonableness. (iii) Actual rent received, in normal circumstances, would be a reliable evidence unless the rent is inflated/deflated by reason of extraneous consideration. (iv) Such ALV, however, cannot exceed the standard rent as per the Rent Control Legislation applicable to the property. (v) if standard rent has not been fixed by the Rent Controller, then it i....
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....by reference to the assessments of comparable properties or to the profits carried from the property or to the cost of construction."" 11. Accordingly, while determining the annual letting value in respect of properties which are subject to rent control legislation and in cases where the standard rent has not been fixed, the Assessing Officer shall determine the same in accordance with the relevant rent control legislation. If the fair rent is less than the standard rent, then, it is the fair rent which shall be taken as annual letting value and not the standard rent. This will apply to both, self acquired properties and general cases where property is let out. While carrying out exercise under section 23(1) of the Act, the departmental au....