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2020 (9) TMI 181 - AT - Income TaxIncome from house property - ALV u/s 23(1)(a) - Municipal value of property or actual rent received - determining ALV to undertake and apply known method of working out the Annual Value - CIT-A adopting the rent paid by the earlier licensee for the earlier period as Annual value (ALV) for the present year for the purpose of section 23(1)(a) - determining reasonable expected rent of a house property - HELD THAT:- As per section 23(1)(a), the annual value of any property shall be the sum for which the property might reasonably be expected to be let from year to year. It may neither be the actual rent derived nor the municipal valuation of the property. It is something like notional rent which could have been derived, had the property been let. In determining the reasonable rent, several factors have to be taken into consideration, such as, location of the property, annual ratable value of the property fixed by the municipalities, rents of similar properties in neighborhood, rent which the property is likely to fetch having regard to demand and supply, cost of construction of the property and nature and history of the property. These factors play vital role in determining reasonable expected rent of a house property. In the instant case, as mentioned earlier, the leave and license agreement dated 01.01.2010 for a period of 36 months i.e. from 01.01.2010 to 31.12.2013 and subsequent leave and license agreement dated 01.01.2014 for a further period of 36 months i.e. from 01.04.2013 to 31.03.2016 are exactly the same. In the instant case, as stated by the AO as per the website of MCA the assessee was a major shareholder and Director in the company to whom property has been rented i.e. Joseph Leslie Dynamiks Mfg. Ltd. We are of the considered view that the above principles in Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT]are applicable to this case. Considering the facts and circumstances of this case, we admit the additional evidence filed by the assessee. Accordingly, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make an order afresh by examining the “Leave and License Agreement dated 7.7.2012 between Shri Ganesh Vishwas and one Joshi and Sameer Thakoor” - Assessee appeal is allowed for statistical purposes.
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