TaxTMI 
TaxTMI 
2017 (9) TMI 572
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....he head 'income from house property'. After seeking an explanation from the assessee in that regard, the AO held that income had to be taxed under the head 'income from other sources', that the assessee was not eligible for deduction of 30% claimed u/s. 24(a) of the Act. He made an addition of Rs. 1. 35 lakhs to the total income of the assessee. 2. 1. During the appellate proceedings before the First Appellate Authority(FAA) the assessee filed detailed submissions and relied upon the case of Manpreet Singh of the Delhi Tribunal (ITA/3976/Del/2013, dt. 6/1/2015) . After considering the available material, he held that in the case of M/s. Bajaj Bhavan Owners Premises Co-op Society Ltd. the Hon'ble Jurisdictional High Court had held that rent received from mobile towers had to be treated as income from house property, that in the contract there was no obligation on part of the owner with regard to repairs and maintenance of the terrace, that on terrace there were no rooms/structure, that only a portion of terrace had been rented out, that the assessee was entitled for deduction of 30%. Finally he allowed the appeal of the assessee . 2. 2. Before us, the Departmental Represen....
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....AO. 4. Last Ground of appeal is about deleting the addition of Rs. 97. 46 lakhs under the head income from house property. During the assessment proceedings , the AO examined details of various properties rented out on lease and license basis. He directed the assessee to file explanation about reasonableness of the rental income. After considering the submission of the assessee, the AO observed that the rent per sq. ft. varied between Rs. 19. 50 per month to Rs. 238/- per month, hat all the properties were situated in one Municipal ward of Kalyan, that there could not be any plausible reason for variation in rates. Accordingly, the AO applied the maximum rent of Rs. 238/-per sq. ft. to the total area of all premises (6617 sq. ft. ), thereby working out total rent of Rs. 1. 88 crores. After allowing deduction u/s. 24(a) of the Act, the AO worked out the taxable rent at Rs. 1. 32 crores, resulting in an addition of Rs. 97. 46 lakhs to the total income of the assessee . 4. 1. In the appellate proceedings, the assessee objected to the addition and filed a detailed explanation. After considering the available material, including the leave and license agreements entered into by the....
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....ial in Kalyan, that the AO had estimated the ALV of all the properties by adopting the highest rent(Rs. 238/-per sq. ft. ), that no comparable instance of property located in same building /area and having higher rent than the rent received by the assessee was brought on record. It is also a fact that the actual rent received by the assessee is substantially higher than the rateable value as per the local authority i. e. Kalyan-Dombivili Municipal Corporation (KDMC). The AO had not alleged that the assessee had received any amount over and above the rent received in pursuance of the leave and license agreement. We will like to refer to the case of Tip Top Typography (368ITR330) and Akshay Textiles and Trading Agencies (P. ) Ltd. (304ITR401) of the Hon'ble Jurisdictional High Court. In the first matter, the Hon'ble Court has held as under: "Income from house property has to be "computed" by computing the annual value of the property. The annual value firstly to be the sum for which the property might reasonably be expected to be let from year to year. In the event, the property which consists of any buildings or lands appurtenant thereto, if the actual rent received or receiv....
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....reflect the prevailing rate or the attempt is to deflate or inflate the rent by such methods, the Assessing Officer is not prevented from carrying out necessary investigation and enquiry. He must have cogent and satisfactory material in his possession which will indicate that the parties have concealed the real position. He must not make a guess work or act on conjectures and surmises. There must be definite and positive material to indicate that the parties have suppressed the prevailing rate. Then the enquiries that the Assessing Officer can make, would be for ascertaining the going rate. He can make a comparative study and an analysis. In that regard, transactions of identical or similar nature can be ascertained by obtaining the requisite details. However, there also the Assessing Officer must safeguard against adopting the rates stated therein straightaway. He must find out whether the property which has been let out or given on leave and licence basis is of a similar nature, namely, commercial or residential. He should also satisfy himself whether the rate obtained by him from the deals and transactions and documents in relation thereto can be applied or whether a departure t....