TMI Blog2004 (8) TMI 625X X X X Extracts X X X X X X X X Extracts X X X X ..... n : ( a )adopting a method, which is contrary to the provisions of the Income-tax Act, 1961, while calculating income from house property at Sea Lords , Cuffe Parade, Mumbai. ( b )not allowing the deduction for municipal taxes, insurance premium and ground rent paid. ( c )disallowing the loss of Rs. 55,130 from the above referred property." 4. The facts, in brief, are that the assessee is a co-owner of the house property being flat No. 4 at Sea Lords, Cuffee Parade, Colaba, Mumbai with four other co-owners; The assessee s share in the said house property, which is occupied by co-owners, is at 22.62%. The assessee, in working out income from house property arrived at a loss of Rs. 55,958 by taking annual rateable value of the fla ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of which municipal taxes are levied. This is because the municipal rateable value is also determined on the basis of the gross rent of the house property. He has cited the following decisions : 1. Shiela Kaushish v. CIT [1981] 131 ITR 435 (SC). 2. M.V. Sonavala v. CIT [1989] 177 ITR 246 (Bom.). 3. CIT v. Bhaskar Mitter [1994] 73 Taxman 437 (Cal.). 6. Citing 4 S.C.C. 408 M/s. AVR Co. v. Fairfield Co-op. Housing Society Ltd., the ld. AR of assessee has contended that the Rent Control legislation (Bombay Rents, Hotel and Lodging House Rates Control Act, 1947) is not applicable to a Co-op. Housing Society and so the situation of fair rent to be determined/determinable under Rent Control legislation does not apply in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . Radha Devi Dalmiya v. CIT [1980] 125 ITR 134 3 , which has been referred to of page 4 of CIT(A) s impugned appellate order. He has also cited the case of Shiela Kaushish ( supra ). He has contended that standard rent could be ascertainable on the basis of cost of construction and value of land; and that the Hon ble Supreme Court agreed in principle that ALV will be determined on the basis of cost of construction and value of land. He has referred to the Society s certificate dated 20-11-1998 regarding Annual Value of the property as placed in assessee s paper book and contended that the annual rateable value has been determined at Rs. 4,610 as shown at Sr. No. 1 of the Certificate but there are number of expenses involving huge amou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the assessment year involved was an earlier one. 10. In Shiela Kaushish s case ( supra ), the Hon ble Supreme Court held that when building is situated in an area where Rent Control Law applies, the standard rent determinable under the provisions of Rent Control Law would be the annual value even though standard rent had not been determined. The assessment years involved in that case were 1969-70 and 1970-71, i.e., prior to insertion of clause 23(1)( b ) w.e.f. 1-4-1976 vide Amendment Act of 1975. 11. In M.V. Sonavala s case ( supra ) it has been held that computation of annual value has to be on the basis of sum for which property might reasonably be let out for year to year and the annual municipal rateable value. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppellants claim has deemed tenant was not tenable and that they were also not the statutory tenants. In the circumstances, the matter was treated to form part of Society s business and in turn, falling within the jurisdiction of co-operative court. As such, the facts of the cited case are quite differing, and the decision has no direct bearing on the issue of determination of ALV nor on the issue of taking the standard rent as basis. 14. Considering all the facts and circumstances of the case together with the fact that the assessment year involved is 1996-97 i.e., after the amendment of section 23 by insertion of clause ( b ) of section 23(1) as also the legal position, we are of the view that the ALV has to be determined as per sec ..... X X X X Extracts X X X X X X X X Extracts X X X X
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