TMI Blog2012 (9) TMI 831X X X X Extracts X X X X X X X X Extracts X X X X ..... e of determining ALV. Rather, it envisages that “property might reasonably be expected to let from year to year”. For the purpose of Section 23(1)(a), the municipal valuation has been held to be correct value for determining ALV by various Courts. Assessing Officer directed to adopt the municipal valuation/rateable value adopted by the municipal authorities - Decided in favor of assessee - ITA No.1903/Mum/2012 - - - Dated:- 11-7-2012 - SHRI R.S.SYAL SHRI AMIT SHUKLA, JJ. Appellant by : Mr. Mandar Visadya Respondent by : Mr. Bahan D. Pati ORDER PER AMIT SHUKLA (J.M.) : This appeal has been filed by the assessee, against order dated 30-1-2012, passed by the CIT(A)-32, Mumbai for the quantum of assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ivli, Andheri (E), Mumbai-400 072 is at Rs.3 lakhs per month, at rate of Rs..50/- per sq.ft. and the property of CG/3, Delphi Building, Ground Floor, C wing, Hiranandani Gardens, Powai, Mumbai-400 076 is at Rs..1,84,000/- at the rate of 160 per sq.feet. The Assessing Officer after giving the benefit of 20% from the above rate, held that the deemed rent of Tax Centre property admeasuring 6000 sq.ft. @ Rs.40 would be taken at Rs.28,80,000/- i.e. 2,40,000 x 12 months and for Delphi Building Rs.17,66,400/- totalling Rs..46,46,400/-. Accordingly, income from house property was computed at Rs..32,74,980/- after giving statutory deduction of 30% under Section 24. 3. Before the CIT(A), it was submitted that the said property had not been let out ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as let out during the year. For the purpose of Section 23(1)(a), the municipal valuation has been held to be correct value for determining ALV by various Courts and in support of this, he had relied upon catena of case laws, which are as under :- i) M.V. Sonawala 177 ITR 246 (Bom.); ii) Parkpaper Industries P. Ltd. 25 SOT 406(Mum); iii) Smitaben Ambani 323 ITR 104 (Bom); iv) JMP Investments Ltd. 15 SOT 180 (Mum); v) Abhijit Rajan Vs. ACIT ITRa/2483/Mum/2009; vi) Tip Top Typography, 2010-TIOL-2300ITAT, Mum; vii) Shapoorji Co. (Rajkot) P. Ltd. ITA/7051/Mum/98 ITXA No.416 of 2004 {Bom.H.C.); and viii) Reclamation Realty 2011-TIOL-75-ITAT-Mum. He also relied upon the Board Circular, CBDT Circular 2004, dated 4-7-1976. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the annual value of any property, market rent is to be applied. On the other hand, it envisages that property might reasonably be expected to let from year to year . There are catena of case laws now available, not only of the jurisdictional High Court but also ITAT Mumbai Bench, wherein it has been held that municipal valuation should be taken as fair basis for determining the annual letting value. The gist of such case laws are given as under :- i) M.V.Sonavala Vs. CIT, 177 ITR 246 (Bom). In this case, the Hon ble High Court after relying upon the decision of Calcutta High Court in the case of CIT Vs. Prabhabati Bansali, [1983] 141 ITR 419, held as under :- However, the question posed to us are not whether the annual value of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessee relied on several other judicial pronouncements in support of his contention that the Municipal value should be the basis of determining the annual value. We are not making reference to those decisions, since in our opinion, the aforesaid pronouncement of Hon ble Bombay High Court considers the decisions of Hon ble Calcutta High Court which in turn has considered the law laid down by the Hon ble Apex Court on the issue. It is clear from the aforesaid exposition of law that charge under section 22 is not on the market rent; but is on the annual value and in the case of property which is not let out, municipal value would be a proper yardstick for determining the annual value. Decision in the case of Mrs. Sheila Kaushish (supr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y India Pvt. Ltd. ITA No1411/M/2007 : wherein the ITAT Mumbai Bench after referring to catena of case laws has come to the following conclusion :- 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 be 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 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 shou ..... X X X X Extracts X X X X X X X X Extracts X X X X
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