1983 (1) TMI 118

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....ed income from the house property at Rs. 840 computing it by taking the annual value of the property on the basis of the municipal ratable value. The ITO computed the income from house property at Rs. 8,821, taking the licence fee of Rs. 12,000 per annum as the rent received and, hence, the bona fide annual value. On appeal, the AAC upheld the ITO's order, holding incidentally that the provisions of section 23(1)(b) of the Income-tax Act, 1961 (' the Act '), apply to the assessee's case. The present appeals are laid against the above orders of the AAC. 2. The learned counsel for the assessee has pointed out that the property in the present case is not let but is only subject to the incidents of a leave and licence agreement. Computation ....

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.... is on the low side. The difference between the concept of letting and licensing may be important for other purposes but, according to the learned counsel, is not relevant for the purposes of fixing the property income. After 1973, it is also pointed out, that a licencee becomes a statutory tenant under the Rent Act. 4. In law, there is a distinction between ' letting ' and ' licence '. The latter has been explained as excluding any interest in the property which a tenant acquires. A licence is associated with an exclusive use of the premises where there is a concurrent right reserved for the lessor also to avail of the benefit from the premises. In my view for the purposes of determining the property income in any particular case it may....

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....(1)(a) applies, it is competent for the ITO to fix the property income on the basis of the rent at which the property can be let out from year to year. The decision in Dewan Daulat Rai Kapoor's case, primarily lays down that the annual value cannot exceed the measure of standard rent. There is no obligation to be bound by the valuation given by the municipality, though that would be an important circumstance in fixing the annual rent. The property in the present case was constructed somewhere in 1965. There is no question of its being occupied or giving out for letting at a period the Bombay Rent Control Act came into force. The property is situated in a crowded busy area in Dadar where the usual rents people are prepared to pay for such ac....