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2021 (6) TMI 132 - AT - Income TaxIncome from house property - Levy of deemed rent on the unsold real estate property of the assessee who is a real estate developer - HELD THAT:- Provisions of section 23(5) was inserted to provide relief to the builders and developers from the ambit of deemed rent on unsold stock already present in the sanguine provisions of section 23, for a period of one year with effect from 1.4.2018. Hence the assessee is mistaken in its plea that deemed rent has been levied under the provisions of section 23(5) which as per the claim of the assessee is prospective. As we have noted that it is nobody's case that deemed rent is to be levied under the provisions of section 23(5). Hence this plea of the assessee that deemed rent was not leviable as section 23(5) was not in existence in the statute books for the impugned assessment year is totally unsustainable Thus from the decision and precedence from Hon'ble Delhi High Court in the case of Ansal Housing Finance & Leasing Co. Ltd [2012 (11) TMI 323 - DELHI HIGH COURT] read alongwith in CIT Vs. Gundecha Builders [2019 (1) TMI 112 - BOMBAY HIGH COURT], it is amply clear that deemed rent from the unsold stock is duly leviable on the assessee on the facts of present case. Hence principally we do not find any infirmity in the proposition that deemed rent is leviable upon the assessee. Rental value - The assessing officer has not levied the deemed rent on municipal ratable value or any nearly similar instance. The reliability of municipal ratable value has been duly upheld in several decisions. AO cannot make any adhoc computation of deemed rent. Hounourable Bombay High Court decision in the case of CIT Vs. Tip Top Typography [2014 (8) TMI 356 - BOMBAY HIGH COURT] duly supports this proposition. Thus assessing officer has made an ad hoc estimate of 8.5% of investment on the plea that assessee has not been able to provide the municipal retable value. In considered opinion nothing stops the assessing officer from obtaining the municipal ratable value from Departmental or government machinery. Hence we direct the assessing officer to compute the valuation of deemed rent in accordance with our observation as above and take into account the Hon'ble Jurisdictional High Court decision as above. Since we have decided the issue by duly taking note of Hon'ble Jurisdictional High Court decision and have also applied Hon'ble Delhi High Court decision, the reference to other decision in this case is not considered relevant to adjudication in this case. Appeal by the assessee stands partly allowed for statistical purposes.
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