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2011 (12) TMI 299 - ITAT MUMBAIValidity of Reopening - Time limitation - reason to believe - Held that:- there was no assessment on the return of income filed by the assessee for the AYs 2001-02 to 2004-05 and only processed u/s 143(1); therefore, the cases for these assessment years do not fall under the first proviso to sec. 147. - for those two years apart from no assessment, the reopening is within four years, the first proviso to sec. 147 is not applicable. Re-opening on the basis of a case of next year - the information and the material gathered during the course of assessment proceedings for the AY 2005-06 whereby the rental income was assessed under the head income from house property constitute a tangible material for forming to believe by the Assessing Officer that the income assessable to tax has escaped assessment. Accordingly, the reopening for the AY 2001-02 to 2004-05 is valid and as per law. Regarding regarding treatment of rental income as income from house property - the agreement to sub-let the property by the assessee to the third party, it is clear that the assessee was in the possession of the property with full transferable rights and has been receiving the rent from the sub-tenant in his own capacity being owner of the property - it is clear that for the purpose of I T Act, the aspect of ownership is different from the common law and if the assessee is having right to use and occupy the property and to enjoy its usufruct in his own right would be the owner of the property though may not be having the formal deed of title in his favour as contemplating under the Transfer of Property Act - Held that: the lower authorities have rightly treated the assessee as deemed owner u/s 27(iiib) of the Act and subsequently treated the rental income from sub-tenant as income from house property - Decided against the assessee. Regarding determination of the Annual Letting Value (ALV) - Assessing Officer took future agreements into consideration while computing the ALV in the years under consideration - Held that: for determination of the ALV under section 23(1), the Assessing Officer has first to find out the reasonably expected rent which the property might fetch by letting out from year to year and then this reasonably expected rent has to be compared with the annual rent received or receivable by the owner and if annual rent received or receivable as contemplated under section 23(1)(b) is in excess of the reasonable rent expected from letting out the property from year to year as determined u/s 23(1)(a) the amount so received or receivable would the annual value for the purpose of section 22 of the Act - Appeals are partly allowed for statistical purpose
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