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2018 (9) TMI 427 - HC - Income TaxRevision u/s 263 - assessment of immovable properties - Held that:- Commissioner merely proceeded to record that both the immovable properties namely, the mall managed by the petitioner company and one managed by M/s. Gandhi Reality (India) Pvt. Ltd., both are situated in the nearby locality, without giving the distance between the two properties and without even prima-facie ascertaining their respective locations. This would be relevant as we discuss the issue further. Next the Commissioner also merely adopted the respective municipal taxes of the two properties as the basis for considering commercial rental value of these properties. The municipal tax rate as well as the potential for fetching rental charges for the immovable properties have many variables. The municipal taxes are fixed on the basis of various factors such as builtup area, the age of the property, location of the property, nature of occupation of the property, use of the property, etc. So far as the rent potential of the property is concerned, equal number of variables would go into deciding the same such as, location of the property, area under rent, the age of the building, the nature of the business surrounding the property. In an immovable property even a small distance of location can make a big difference if one property is situated at a prime location at an important junction and the other does not enjoy any such advantage. These aspects cannot be standardised by applying a mathematical formula. Commissioner compared the two most variable factors by merely taking the proportion of the two sets of properties between RMC taxes and the rentals received or receivable. The starting point for making further inquiry itself was erroneous. Income from other sources - Held that:- As noticed the correspondence between the AO and the assessee during the course of assessment proceedings in the earlier portion of his order. Considerable attention was given to the question of assessee's income from other sources and the expenditure claimed by the assessee in order to earn such income. In particular, the entire breakup of such expenditure was before AO. AO having asked for details, the assessee supplied full details of property tax expenses, electricity expenses, legal and professional expenses, security charges, etc. AO made no additions. Clearly a case of full inquiry having been made by the AO before he made up his mind. This is not a case where there were no inquiries or no germane inquiries having been made. On this basis, the second ground of the Commissioner also must fail and yet another area on this ground where the Commissioner has committed error while apportioning the cost between two heads of income where the Commissioner has taken the projected income of ₹ 9.35 crores from the house property as estimated by him on the basis of projections. All in all, we do not find this a fit case where Commissioner would have exercised revisional powers.
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