TMI Blog2012 (8) TMI 38X X X X Extracts X X X X X X X X Extracts X X X X ..... stimation is not justified - CIT(A) was correct in deleting the addition. - ITA No. 90/Ahd/2010 - - - Dated:- 6-7-2012 - Shri D.K.Tyagi, and Shri T.R. Meena, JJ. Appellant: Shri M. Mathivanan, Sr. D.R. Respondent: Shri Aseem Thakkar, A.R. O R D E R PER : T.R.Meena, Accountant Member This is an appeal at the behest of the Revenue which has emanated from the order of CIT (A)-I, Ahmedabad, order dated 15.11.2009 for assessment year 2005-06 against the deletion of addition of Rs. 20,99,311/- on account of annual letting value of the house property. 2. The brief fact of the case is that the assessee is individual assessee. She has two immovable properties, one at Ahmedabad and one at Mumbai which are shown self as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iation in the manner of valuation during the year under consideration. The assessee also claimed before the A.O. that Mumbai property should be treated as self occupied property and Ahmedabad property for valuing the ALV. The A.O. had given detailed reasoning in paragraph no. 1.4 and also relied upon Sakarlal Balabhai Vs. ITO (1975) 100 ITR 97, 107, Hon ble Gujarat High Court, Smt. Radhadevi Dalmiya Vs. CIT (1980) 125 ITR 134 Shri Bipinbhai Vadilal Family Trust v Commissioner of Income Tax in 208 ITR. The A.O. finally concluded the estimated value of property on the basis of rate of interest on cost of house property @ 5% on capital value of Rs.4,19,86,220/- which was Rs.20,99,311/-. The A.O. made addition of Rs. 20,99,311/- in the income ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er the head "Income from House Property" is not a tax upon rent of the property, but it is taxed on the inherent capacity of a building to yield income. The courts have consistently held that reasonable expected rent can be determined by taking into considerations of municipal valuation of property and fair rent of the property- However, if the property is covered by rent control Act, then, the amount so computed cannot exceed the standard rent, as determined under the Rent Control Act. 6.2 In view of the language of section 23(i) which, before amendment in 1975 was in pan material with that used in municipal tax legislation, the Supreme Court in Sheila Kaushish v. C/T [(1981) 131 ITR 435 (Supreme Court) and Amolak Ram Khosla v. CIT [(198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n annual rateable value of the property at Mumbai, the ALV of the property belonging to appellant has been determined at Rs.9,527/-. This value has been accepted by the Assessing Officer's in earlier as well as in subsequent assessment years in scrutiny assessments. In the impugned assessment order, the Assessing Officer grossly erred in determining the fair rent of self occupied property on the basis of capital value of property. Such an estimation is not permissible. The Assessing Officer is directed to tax the income from house property, as declared in the return of income. This ground of appeal is treated as allowed. 4. The Revenue is before us. The ld. D.R. relied upon the order of the A.O. whereas the assessee relied upon the order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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