TMI Blog2014 (7) TMI 898X X X X Extracts X X X X X X X X Extracts X X X X ..... s by considering the value of investment of the flat - CIT(A) has slightly reduced the same in AY 2006-07 and confirmed the same in AY 2007-08 - the tax authorities have considered the value of property only for determining the Annual Rental value – Relying upon Dy. CIT Versus Reclamation Realty India Pvt. Ltd.[2010 (11) TMI 477 - ITAT, MUMBAI] - the Standard rent / Municipal rateable value has to be considered as fair rental value - the rent received by the assessee is more than the municipal rateable value - the rent received by the assessee has to be taken as the Annual value u/s 23 of the Act – order of the CIT(A) set aside – Decided in favour of Assessee. - I.T.A. Nos.1877 & 6826/Mum/2011 - - - Dated:- 17-7-2014 - Shri H. L. Karwa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Act). By considering the value of investment made in purchase of flat, the AO estimated the rental income at ₹ 12,00,000/- in both the assessment years and accordingly computed the income from house property . In the appeal filed by the Assessee, the ld. CIT(A) reduced the annual value estimated by Assessing officer in assessment year 2006-07 to ₹ 10 lakhs, but confirmed the order of AO for assessment year 2007-08. Aggrieved by the orders of ld. CIT(A), the Assessee has filed these appeals before us for both the years. 4. We have heard the rival contentions and perused the record. At the time of hearing the ld. Counsel placed reliance on the decision rendered by the Coordinate Bench of the Tribunal in the case of DCIT V/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 the charge u/s.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. If the property is subject to rent control laws and the fair rent determined in accordance with such law is less than the municipal valuation, then only that can be substituted by the municipal value. The decision in the case of Mrs. Sheila Kaushish (131 ITR 435)(SC) mentions standard rent under the Rent Control Act as one of the yardsticks. We also find from the dec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal has very categorically held that if ratable value is less than the standard rent (where the property is subjected to rent control laws) then only standard rent has to be taken. In coming to the above conclusion the Tribunal has followed the decision of the Hon ble Supreme Court in the case of Dewan Daulat Rai kapoor (122 ITR 700). Thus the decision in the case of Baker Technical Services (P) Ltd. (supra), being contrary to the decision of the Bombay High Court, in our view cannot be followed. The decision relied upon by the learned D.R in the case of Fizz Drinks Ltd. (95 TTJ (Del) 249) and Tivoli Investment Trading Co. (P) Ltd. (90 ITD 163) are distinguishable on facts. The facts in that case were that the agreeed rent was Re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... same in AY 2006-07 and confirmed the same in AY 2007-08. Thus, we notice that the tax authorities have considered the value of property only for determining the Annual Rental value. The judicial pronouncements that were considered by the co-ordinate bench of Tribunal in the case of Reclamation Reality India Pvt Ltd (supra) clarifies that the Standard rent / Municipal rateable value has to be considered as fair rental value. In the instant case, there is no dispute that the rent received by the assessee is more than the municipal rateable value. Hence, we are of the view that, in the facts and circumstances of the case, the rent received by the assessee has to be taken as the Annual value u/s 23 of the Act. Accordingly, we set aside the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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