2013 (5) TMI 223

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..... he assessee filed his return declaring total income of Rs.15.34 lakh including income from house property, being lease rent received from Canara Bank of Rs.19,477 for letting out the premises situated at Dalamal Towers and Rs.8,79,660 as compensation from ONGC for the use of its property viz. Office No.171-172 In Maker Tower E and Arcadia Building, 6th Floor, Mumbai. The Assessing Officer noticed that the properties at Arcadia Building and 171-172 Maker Tower E were co-owned by the assessee with his share of 15%. As the assessee along with other co-owners had received interest free earnest deposit in respect of these two properties, the Assessing Officer came to hold that 12% of such deposits was liable to be included in the Annual letting .....

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..... aterial on record, we find that the Assessing Officer made addition on this score by determining ALV which included 12% interest on interest free earnest deposits received by the assessee. In our considered opinion, this issue is no more res integra in view of the direct Full Bench judgment of the Hon'ble Delhi High Court in the case of CIT v. Moni Kumar Subba [(2011) 333 ITR 38 (Del) (FB)] in which it has been held that no addition to the annual letting value can be made on account of notional interest on interest free deposit with the landlord u/s.23(1)(a) of the Act. In the light of this direct judgment we are of the considered opinion that the action of the authorities below on this score cannot be upheld. Similar view has been taken by .....

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..... turbed the ALV of the property by increasing it with the notional interest. It was further contended that the deposit was received in the year 1983 when such property was first let out and in no earlier or later year, the annual value declared by the assessee has been disturbed . The said contentions made by the assessee remained uncontroverted on behalf of the assessee. 6. In view of the foregoing reasons as given above and also following the principle of consistency, we hold that the action of the CIT(A) cannot be upheld. We, therefore, overturn the impugned order on this issue and direct that the ALV as declared be accepted without increasing it with notional interest or tinkering it in any other manner as suggested by the ld. CIT(A). .....

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