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2011 (4) TMI 876 - AT - Income TaxIncome from House property - Annual Letting Value - assessee entered into an agreement with Builder for acquisition of premises office, of which no lease is granted till date - assessee had let out property to CITI Bank vide three agreement with it - first agreement was for granting leave and license - Vide second agreement assessee received the interest free security deposits of Rs.1,54,00,000 from the CITI Bank - third agreement was for availing an overdraft facility upto Rs.51,00,000 from CITI bank - annual maintenance charges received from CITI bank are reimbursed to builder from whom the assessee has purchased the property - Revenue determined Annual Rateable Value of the property in question by adding 15% interest on free deposits - Held that:- No addition of notional interest can be made for arriving at the annual value u/s 23(1)(a) or 23(1)(b). When the ALV is determined u/s 23(1)(a), with reference to the fair rent and then to such value no further addition can be made. The fair rent takes into consideration everything. In this case the ALV cannot be limited to the standard rent as workable under the Rent Control Act but the fair rental value shall have to be determined. The fair rental value determined by the AO however is not reasonable. Infact it is clear from the order of AO that the AO has not even made an attempt to determine the fair rent u/s 23(1)(a). Hence, we set aside the order of the AO for determination of the fair rent to be adopted as the annual letting value. Whether income from licensing of premises is assessable as profits and gains of business because the assessee is not the owner of the property in question - Held that:- It is clear that the assessee acquired the property under the provisions of Maharashtra Ownership Flats Act, 1963 and even otherwise, the assessee falls under the provisions of section 27(iiia). Further, the legal position is well settled that even under the common law the assessee may not have a legal title over the property but in the context of section 22 the owner is the person who is entitled to receive income from the property in his own right. There is no dispute about the right of the assessee to receive the income from the property in question, therefore, such income would be taxable under head 'Income from House Property'
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