2012 (12) TMI 1155

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....of a property not actually let out cannot, for the purpose of section 23(1)(a) exceed the municipal valuation of the property as adopted by the municipal authorities. 2. The learned CIT(A) was not justified in ignoring the binding authorities of the Hon'ble jurisdictional High Court and the Hon'ble Tribunal which were brought to his notice, which lay down that the 'annual value' of a property for the purposes of section 23(1)(a) cannot exceed the municipal valuation of the property. 3. The learned CIT(A) erred in ignoring the settled position that the annual value of a property for the purposes of section 23(1)(a) cannot exceed the standard rent as computed under the Rent Control Act." 2. The only issue before us is determination of an....

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....erred to in clause (a), the amount so received or receivable; or (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable :" There has been no change in the language so far as Section 23(1)(a) is concerned. Further from the plain reading of the section, it would be seen that nowhere it has been provided that for the purpose of determining the annual value of any property, market rent is to be applied. On the other hand, it envisages that "property might reasonably be expected to let from year t....

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.... on the basis of the sum for which the property might reasonably be let from year to year and the annual municipal value." ii) Parkpaper Industries P. Ltd. 25 SOT 406(Mum) : In this case, the Hon'ble Tribunal after relying upon the decision of Bombay High Court in the case of M.V.Sonavala Vs. CIT, 177 ITR 246 (Bom) and the decision of the Hon'ble Supreme Court in the case of Dewan Daulat Rai Kapoor Vs. New Delhi Municipal Committee [1980] 122 ITR 700 (SC) and in the case of Mrs. Sheila Kaushish Vs. CIT [1981] 131 ITR 435(SC), has observed and held as under:- "12. Learned cousel for the assessee relied on several other judicial pronouncements in support of his contention that the Municipal value should be the basis of determining the annu....

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....mitaben Amabani, 323 ITR 104(Bom) : In this case, the Hon'ble High Court has held as under :- "In the case of self-occupied property, the valuation of a house for the purpose of wealth-tax is to be calculated on the basis of gross maintainable rent which is the sum for which the house might reasonably be expected to be let from year to year. As far as rateable value is concerned, under the various Acts that govern municipalities/ municipal corporations rateable value is also calculated on the basis of reasonable rent that the property may fetch." iv) DCIT Vs. Reclamation Realty India Pvt. Ltd. ITA.No.1411/M/2007 : wherein the ITAT Mumbai Bench after referring to catena of case laws has come to the following conclusion :- "25. For the ....