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TMI Blog2012 (9) TMI 66X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,68,329/- as declared in the return. 3. The Ld. CIT(A) erred in not adopting the Municipal ratable value of Rs. 1,05,718/- as per BMC valuation as the sum for which the property might reasonably be expected to let from year to year u/s. 23(1)(a) of the Act in respect of NCPA flat. 4. The Ld. CIT(A) erred in not allowing deduction of interest Rs. 2,70,000/- from house property income as the same interest is taxed under the head income from other sources also, thus taxing the same income twice in house property income and income from other sources. 5. The Ld. CIT(A) erred in confirming the action of the AO in assessing the income in respect of seven flats at Sunbeam building at Rs. 2,97,750/- as against Rs. 1,81,500/- declared in the return." 3. Briefly stated the facts of the case are that the assessee is a co-owner with 1/5th share of flat at NCPA apartments and also own 7 flats of Sunbeam buildings. For the year under consideration, return of income was filed on 30.6.2000 declaring the total income at Rs. 8,68,280/-. The income consists of income from house property of Rs. 4,10,453/- and income from other sources to the tune of Rs. 4,69,831/-. The return was processed u/ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect nexus between money receipts as deposit money placed in the bank as FDRs. The AO further pointed out that the assessee received actual rent at Rs. 2,20,000/- upto 30.7.1999 and for the same flat, the assessee was showing monthly rent of Rs. 40,000/- because now the assessee has interest free deposit of Rs. 2.25 crores from the lessee. Comparing with the rental income of GACL, the AO came to the conclusion that similar property is fetching monthly rent of Rs. 2,75,000/- only difference was that the assessee is in receipt of an interest free deposit. The AO was therefore of the opinion that a part of rent was structured into the interest free deposit was accepted by the assessee and since the flat is co-owned by the assessee with four other entities, the AO computed assessee's share at Rs. 55,000/- per month as ALV for the NCPA flat. After giving rebate for Municipal Tax, the statutory deduction for repairs and collection charges computed at Rs. 4,81,780/- as the net income from house property for NCPA flat. Proceeding further for determining the ALV of flat at Sunbeam building, the AO found that four flats were rented out at an annual rent of Rs. 2,18,000/- and the remaining 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ome from house property. To substantiate his claim, the Ld. DR relied upon the decision of the Hon'ble High Court of Punjab & Haryana in the case of CIT Vs K. Streetlite Electric Corpn. (2011) 336 ITR 348. 8. We have considered the rival submissions and perused the orders of lower authorities and the Paper book submitted by the assessee. It is an undisputed fact that assessee was receiving a monthly rent of Rs. 2,20,000/- upto 30.7.1999. It is also an undisputed fact that thereafter the assessee received an interest free deposit of Rs. 2.25 crores from the licencee M/s. Aptech Ltd. After perusing the paper Book submitted by the assessee, we find that assessee's share in the interest free deposit at Rs. 45 lakhs, was deposited in the Savings Bank account with Standard Chartered bank which was simultaneously transferred to the fixed deposit account with Standard Chartered bank on 4th August, 1999. For the period from 1.8.1999 to 31.3.2000, the assessee received interest income of Rs. 2,70,000/- which has been offered for tax under the head ' income from other sources'. Considering these facts, we can say that the direct nexus has been established by the assessee. 9. Now coming to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the security deposit would not form part of income from house property whereas in the instant case the actual interest accrued on the security deposit has been shown as interest income under the head income from other sources. 11. We have also the benefit of the order of Tribunal in ITA Nos. 4028 & 4029/M/08 in the case of Sundeep Exports Pvt. Ltd (one of the co-owner of NCPA flat) wherein the Tribunal on identical facts and issues have held that "ALV ADOPTED BY THE Municipal rateable value should be the determining factor for applying provisions of Sec. 23(1)(a) of the Act. No notional income on interest free deposit/rent received in advance should be considered for determining the Municipal value of the property. Since the rent received by the assessee in the instant case is more than the municipal rateable value, therefore, the same has to be taken as ALV of the property." 12. After considering the facts in totality and the order of the Tribunal in the case of the co-owner (supra), respectfully following the decision of the Tribunal, in our humble opinion, the ALV adopted by the municipal authorities should be taken into consideration and following the findings of the Trib ..... X X X X Extracts X X X X X X X X Extracts X X X X
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