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2010 (11) TMI 477 - AT - Income TaxIncome from House Property - calculation of notional interest on advance rent received and security deposit while determining annual value of the let out property - Since the rent received by the Assessee was more than the sum for which the property might reasonably be expected to let from year to year, the actual rent received should be the annual value of the property u/s.23(1)(b) of the Act - Notional interest on interest free security deposit/rent received in advance should not be added to the same whether the revenue authorities are justified in substituting the actual rent received by this Assessee by the rent actually received by M/S. Reclamation Real Estate company India (P) Ltd., from J.P. Morgan Chase Bank, at ₹ 2,87,87,600 as against actual rent received by this Assessee of ₹ 1,12,64,400 - While determining the annual value of the property in the case of A, the AO substituted the rent paid by C to B because the rent paid by B to A was less compared to the rent paid by C to B. The Hon'ble Bombay high Court held that annual value is the actual rent received or receivable by the owner from the tenant irrespective whether tenant on such letting has received higher rent - The expression receivable cannot mean anything more than what is actually received - Held that: the annual value has to be adopted at the annual rent actually received by the Assessee from ICICI Ltd., viz., ₹ 1,12,64,400 - In the result, appeal by the Assessee is allowed while the appeal by the revenue is dismissed
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