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2017 (12) TMI 1325 - AT - Income TaxAscertaining annual rentals of the North Beach Road property - multiplication factor can be adopted wherever a property is located - Held that:- It is true that assessee had returned rental income from its property at Cathedral Road at ₹ 33,15,006/- against which Municipal Tax claimed was ₹ 1,51,522/-. It is also true that Municipal Tax as a percentage of the rental income came to 4.57% and this gave a multiplication factor 21.88. But the question before me is whether the same multiplication factor can be adopted wherever a property is located. Ld. Assessing Officer had adopted the multiplication factor of 21.88 on the Municipal Tax, for the property situated in North Beach Road. The method in which annual value is to be determined is clearly set out on the above section. No doubt, Multiplication valuation can be a pointer as to the reasonable rental that can be fetched for a given property. However, in my opinion, a multiplication factor derived from one set of data for a given property, cannot be applied blindly to another property located at a different place, even though, both are in the same city. The methodology followed by the lower authorities was in my opinion entirely unscientific. Ld. Commissioner of Income Tax (Appeals) though he gave partial relief to the assessee did not change or apply the correct method for ascertaining the rental value of the North Beach Road property. In opinion, ascertainment of annual value of the North Beach Road property requires a fresh look by the ld. Assessing Officer.
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