TaxTMI 
TaxTMI 
2018 (5) TMI 45
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.... estate. In that connection in the month of March 2005 purchased property No.9, Tolstoy Marg, Connaught Place, New Delhi, admeasuring3185 sq. meter for a total consideration of Rs. 27 crores. They have shown the said property as part of inventory under the head "Current assets and loans & advances". According to the assessee, while acquiring the said property, the intention of the assessee was not of deriving any rental income there from but only for the purpose of re-sale, as such, the annual letting value ("ALV") of the property was not brought to tax. 3. Pursuant to the search and seizure operation u/s 132 of the Income-tax Act, 1961 ("the Act") took place on 22.3.2011 in the case of Amtek Group, learned AO initiated proceedings u/s 153....
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....rther submitted on behalf of the assessee that revenue does not dispute the fact that the assessee has been dealing in the real estate i.e. acquisition and construction of property for sale and in that process the unsold property has been shown as stock in trade, and in such a situation, it cannot be said that the notional income from the property could be brought to tax under the head "Income from house property". For the purpose of analogy, reliance is placed on the decision of the Hon'ble jurisdictional High Court in the case of Uberoisons (Machines) Ltd. vs CIT, 173 Taxmann 262. 6. The next contention of the assessee is that even if we assume for a while that the provisions u/s 22 of the Act are attracted, still the determination of th....
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....rence by this Tribunal. 8. We have perused the record in the light of the submissions on either side. So far as the ownership of the property is concerned, absolutely, there is no dispute and it is the assessee that holds the ownership. Learned CIT(A) recorded that the address of the assessee is 9, Ansal Bhavan, 16 K.G. Marg, New Delhi and it shows that the assessee is not conducting any business in the building in dispute. Learned AO recorded a finding that disputed building has been used as office by various group concerns, as such, it goes without saying that the contention that this particular building is used by the assessee company does not hold good. Inasmuch as the profit and loss account and the bank statement do not reveal any in....
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....ck in trade, and are not let out. The further argument is that unlike in the other instances, where such builders let out flats, here there is no letting out and that deemed income - which is the basis for assessment under the ALV method, should not be attributed. This Court is of the opinion that the argument, though attractive, cannot be accepted. As repeatedly held, in East India, Sultan, and Karanpura, the levy of income tax in the case of one holding house property is premised not on whether the assessee carries on business, as landlord, but on the ownership. The incidence of charge is because of the fact of ownership. Undoubtedly, the decision in Vikram Cotton indicates that in every case, the Court has to discern the intention of the....
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....ng the same, we hold that the levy of income-tax in this case shall not be on the premise whether the assessee carries on business as landlord, but on the basis of ownership, as such, the authorities below have rightly held that the ALV of this building has to be brought to tax. 11. Now coming to the question of the quantification of ALV, the Full Bench of the Hon'ble jurisdictional High Court in the case of CIT vs Moni Kumar Subba(2011) 330ITR 38, held that,- 20. The above discussion leads to the following conclusions : (i) Annual letting value 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 base....
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.... and general cases where property is let out. While carrying out exercise under section 23(1) of the Act, the departmental authorities shall follow these guidelines reproduced above provided in the Full Bench decision of the Delhi High Court and followed by a Division Bench of this Court in the case of Tip Top Typography (supra). 13. It is, therefore, clear that it is incumbent upon the revenue to ascertain the standard rent as per the relevant rent control legislation and to take the fair rent or the standard rent, whichever is lower, as the ALV of the building. In the case in hand, such and exercise does not seem to have been undertaken by the AO and also the grievance of the assessee is that the source of taking non relevant to the fai....