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TMI Blog2011 (2) TMI 316X X X X Extracts X X X X X X X X Extracts X X X X ..... CIT(A) in confirming the reopening of the assessment u/s 147 of the I T Act by the Assessing Officer. The ld counsel for the assessee, did not press this ground for which the ld DR has no objection. Accordingly, this ground by the assessee is dismissed as not pressed. 3. Grounds of appeal nos 2 to 4 read as under:- "2. The ld CIT(A) erred in confirming the action of the Assessing Officer in assessing the income in respect of a flat at NCPA at Rs. 3,12,450/- as against Rs. 1,68,329/-as declared in the return. 3. The ld CITA) erred in directing the income from NCPA property to be assessed u/s 23(1) (a) of the Act as against section 23(1) (b) applied by the Assessing Officer. 4. The ld CIT(A) erred in not adopt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is of rent received by GACL. He accordingly determined the annual rent at Rs.6,60,000/- being the amount attributable to the assessee. 4. In appeal, the CIT(A) held that the rateable value determined by the BMC is not the standard rent. In the case of the assessee's concessional rent shown was because of security deposit and there was direct quid pro quo between concessional rent and interest free security deposit. He accordingly upheld the action of the Assessing Officer in determining the ALV at Rs. 6.60 lacs. He further held that although the Assessing Officer has not mentioned clause 23(1) under which he had worked out the fair rent, it is to be held that fair market value has been worked out u/s 23(1)(a) of the Act. 5. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mitaben N Ambani vs CIT reported in 323 ITR 104 (Bom); decision of the Hon'ble Calcutta High Court in the case of CIT vs Prabhabati Bansali reported in 141 ITR 419 (Cal) and the decision of the Tribunal in the case of DCC vs Shri Shripal Morakhai reported in 7 SOT 609, he submitted that Municipal Rateable Value only to be taken as annual letting value of the property. 6.3 Referring to the order of the CIT(A) in the case of J M Tandon, copy of which is paced at pages 36 to 42 of the paper book, which is the basis for reopening of the assessment in the case of the assessee, he submitted that CIT (A), in the said decision, has quashed the reassessment proceedings and the department is not in appeal. He, accordingly submitted that this ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the case of Reclamation Reality India Pvt Ltd (supra) at para 25 of the order has held as under:- "25. For the reasons given above, we hold that the annual value (also referred to as municipal valuation/rateable value adopted by the municipal authorities in respect of the property at Rs. 27,50,835/- should e the determining factor for applying the provisions of sec. 23(1)(a) of the Act. Since the rent received by the assessee was more than the sum for which the property might reasonably be expected to let from year to year, the actual rent received should be the annual value of the property u/s 23(1)(b of the Act. Notional interest on interest free security deposit/rent received in advance should not e added to the same in view of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssee. In this order, after considering the entire legal position and with particular reference to section 23(1)(a) and also after considering the three orders cited before us on behalf of the department, the Tribunal came to the conclusion that even for the purpose of section 23(1)(a) the notional interest income on the security deposit/advance rent cannot be included in the income from property. Respectfully following the said order, we affirm the decision of the CIT(A) for all the three years. Thus Ground No.3 for the assessment year 2003-04 and Ground No.2 for the assessment years 2004- 05 and 2005-06 are dismissed." 8. Respectfully following the above two decisions, I am of the considered opinion that ALV adopted by the Municipa ..... X X X X Extracts X X X X X X X X Extracts X X X X
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