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2021 (3) TMI 719 - AT - Income TaxIncome from house property - ALV determination - annual letting value of the property in question by taking an instance of property let out to DRT for a rent @ 8.78 per sq.ft - HELD THAT:- Assessing Officer has taken the ALV as the rate of rent in respect of a building situated in the area, however, the Assessing Officer has not given the assessee a fair opportunity to raise the objection against adopting the said rate of rent as fair market rental value of the property in question while determining the ALV of the property. There is not dispute that in case the Assessing Officer finds that the rental income shown by the assessee is not in the parity of the reasonable expected sum for letting out of the property in terms of section 23 (1) - AO can proceed to determine the annual letting value. The Annual letting value of the property is the sum which is reasonably expected to be fetched by letting out for the property from year to year basis. Thus, the reasonable and proper criteria for determining the annual letting value is the fair market rental for which the property can be reasonably let out from year to year. AO has though adopted the rate of rent as it was agreed upon between the parties in respect of property in the vicinity however, the assessee did not give the opportunity to the assessee to present its case against such adoption of the annual letting value. The Assessing Officer has also not taken the facts which might have influenced the fair market rental value of the property being the difference in the locality of the properties, the area let out advantage and disadvantage if any attached to the properties. Therefore, the Assessing Officer has adopted the said rent without even giving a show cause notice to the assessee CIT (A) though confirmed the order of the Assessing Officer however, the comparable of the rate adopted by the Assessing Officer not been examined by the Ld. CIT (A). Accordingly, in the facts and circumstances of the case the matter is set aside to the record of the Assessing Officer for re-adjudication of the same - Appeal of the assessee is allowed for statistical purposes.
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