2016 (11) TMI 724

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....e Shareholders and Directors of a company by name 'Moidus Medicare Private Limited', Calicut, which has established 'National Hospital'. A substantial portion of the building owned by the assessees was let out to the company and the agreed rent is Rs. 1 per sq.ft. 2. For the assessment year 1996-1997, applying the provisions of Section 23 of the Income Tax Act, the Assessing Officer assessed the annual value of the building at Rs. 4 per sq.ft. on the basis that another portion of the building was let out to the Telephone Department and the rent paid by the Department to the assessees is Rs. 4 per sq.ft. In the appeal filed before the Commissioner Income Tax (Appeals), the order of the Assessing Officer has set aside and thi....

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....ed for the purposes of Section 22 applying the methods laid down therein. As per Clause (a) of Section 23(1), the annual value shall be deemed to be the sum for which the property might reasonably be let out from year to year. Clause (a) would obviously be applicable to a property which is not let out and in such a case, the such sum, for which the property might be reasonably expected to let, shall be the annual value. On the other hand, a reading of Clause (b) would show that where a property is let and the annual rent received or receivable by the owner is in excess of the reasonably expected sum mentioned in Clause (a), the annual value shall be the amount actually received or receivable by the owner. In other words, as per Clause (b), ....