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2021 (9) TMI 597 - ITAT MUMBAICapital gain computation - Addition of capital gains by allowing further proportionate cost - assessee society constructed office premises for the commercial purpose on the land taken on lease for 99 years from MMRDA - CIT(A) while determining the capital gain at ₹ 3,92,000/- had categorically observed that the ld. AO had accepted the said computation in the remand proceedings which is quite evident from the fact that the ld. AO had no comments to offer in his remand report in respect of this issue - HELD THAT:- On perusal of the remand report that the ld. AO had categorically stated that he has no comments to offer on the submissions made by the assessee before the ld. CIT(A). Hence, it could be safely concluded that the ld. AO had nothing adverse to state on the submissions made by the assessee. Having accepted the contentions of the assessee in the remand report, the Revenue ought not to have preferred any appeal on this issue before us. Reliance in this regard is placed on the decision of the Hon’ble Madras High Court in the case of B Jayalakshmi vs. ACIT [2018 (8) TMI 208 - MADRAS HIGH COURT]. Accordingly, the ground No.1 raised by the Revenue is dismissed. Income from house property - Fair rental value in respect of let out property - annual value for the purpose of taxability under the head ‘income from house property’ - AR argued that in the year 2007, substantial development took place which had contributed for the enhanced rental value that could be derived by the assessee from a different tenant i.e. Trans Expo Trade Pvt. Ltd - HELD THAT:- AO had adopted the annual rent derived by the assessee in A.Y.2007-08 for the similar extent of property let out to a completely different party i.e. Trans Expo Trade Pvt. Ltd., at ₹ 10,25,000/- per month and had discounted 25% from such value in order to arrive at the fair rental value of the property let out to M/s. Lupin Ltd., in A.Y.2004-05. This in our considered opinion, is not correct approach. AO ought to have determined the fair rental value in the year under consideration based on certain comparable data. Since that was not done by the ld. AO and also in view of the fact that the actual rent received by the assessee is also more than the municipal value for the year under consideration, which fact is not disputed by the Revenue before us, we hold that actual rent received by the assessee at ₹ 3,50,000/- per month in respect of property let out to M/s. Lupin Ltd., should be considered as annual value for the purpose of taxability under the head ‘income from house property’. This is the precise direction given by the ld. CIT(A) also by considering the provisions of the Act, on which we do not find any infirmity.Ground No.2 raised by the Revenue is dismissed. Determination of Annual Lettable Value (ALV) on vacant properties - Intention to let out - HELD THAT:- Considering the fact that intention to let out is of no relevance and same cannot be equated with the word “let” in Section 23 of the Act. Hence, the argument advanced by the ld. AR in this regard that “intention to let out” is to be seen, stands dismissed, in the light of the decision of in the case of Vivek Jain [2011 (1) TMI 897 - ANDHRA PRADESH HIGH COURT] Determination of annual value by the ld. AO in respect of vacant properties based on the actual rent received by the assessee for let out property in A.Y.2007-08 - As already held that the actual rent received by the assessee in respect of let out property to some other tenant in subsequent assessment year cannot be used as a fair rental value for an earlier assessment year in respect of property that is let out to different tenant. While that has been held for a let out property, the same principle would indeed be applicable for vacant property also. As also held in ground No.2 of the Revenue hereinabove that in such a scenario, municipal value should be adopted with the actual rent and higher of those two should be considered as the annual value. We find that the ld. CIT(A) has also directed the ld. AO to consider only the municipal value as the annual value in respect of vacant properties, on which finding, we do not find any infirmity - order of the ld. CIT(A) with regard to determination of annual value for the vacant properties is upheld. Accrual of income - Disallowance in respect of amount received on account of transfer fee from incoming member of the society - The issue in dispute before us is already decided by the Hon’ble Apex Court in the case of ITO vs. Venkatesh Premises Co-operative Society Ltd. [2018 (3) TMI 675 - SUPREME COURT]. Thus we hold that the receipt on account of transfer fee / amenities fee cannot be brought to tax as income of the assessee. Accordingly, the ground raised by the assessee is allowed.
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