TMI Blog2005 (4) TMI 512X X X X Extracts X X X X X X X X Extracts X X X X ..... Electronics Ltd. In addition to the rent, the assessee had also received interest-free deposits of Rs. 50,14,896. The assessee was asked to explain as to why the notional interest on the rent-free deposit be not taken into consideration while determining the ALV under section 23(1)( a ) of the Act. The explanation of the assessee was that the deposit was received as security of the rent as well as the premises as per prevailing practice in lease transactions. Hence, the same could not be taken into consideration for determining the ALV under section 23 of the Act. The Assessing Officer was not satisfied with the said explanation. In para 5 of its order, the Assessing Officer admitted that there was no guidelines under section 23(1)( a ) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Satya Co. Ltd. [1994] 75 Taxman 193 and certain decisions of the Tribunal. The Learned CIT (Appeals) relied on the judgment of the Hon ble Calcutta High Court wherein it was held that under section 23 of the Act, there was no scope for adoption of notional interest on interest-free deposit as rent unless it is shown by the Assessing Officer that benefit on account of interest-free deposit from the tenant was a colourable device of receiving the rent in circuitous manner. On the facts of the present case, it was held by him that there was no material on record to show that interest-free deposit was indeed a colourable device. Further, there was no material to show that the rent charged by the assessee was lower than the prevailing market ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as considered by the Hon ble Supreme Court in the case of Dewan Daulat Rai Kapoor ( supra ) though it was a case where the ratable value was to be determined for the purpose of levy of house tax. In that case, it was held that such annual value was limited to the measure of standard rent determinable on the principles laid down in the Rent Control Act and the same cannot exceed such measure of standard rent. Where such standard rent was not fixed, then the assessing authority would have to arrive at its own figure of the standard rent by applying the principle laid down in the Rent Control Act for determination of standard rent. This view was followed in a later decision by the Hon ble Supreme Court in the case of Mrs. Sheila Kaushish ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o not clear whether the provisions of Rent Control Legislation are applicable to the properties in dispute. The Learned Counsel for the assessee has no objection if the matter is restored for determination of the ALV in accordance with the above legal position. In view of the same, we set aside the order of the Learned CIT (Appeals) and restore the matter to the file of Assessing Officer for fresh determination of the ALV in accordance with the guidelines mentioned above. At this stage, it may be clarified that if the property is not the subject-matter of Rent Control Legislation, then the ALV shall be determined on the basis of comparable cases. If the property is found to be governed by Rent Control Legislation, then ALV shall be determin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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