TMI Blog2014 (8) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO is convinced that the case before him is suspicious, determination by the parties is doubtful that he can resort to enquire about the prevailing rate in the locality - municipal rateable value may not be binding on the AO but that is only in cases of afore-referred nature - It is definitely a safe guide. Even in the cases and matters brought by him to our notice, it is evident that the AO cannot brush aside the rent control legislation is applicable to the premises - the AO has to undertake the exercise contemplated by the rent control legislation for fixation of standard rent - The attempt by the AO to override the rent control legislation and when it balances the rights between the parties has rightly been interfered with in the given case by the Appellate authority - The AO either must undertake the exercise to fix the standard rent himself and in terms of the Maharashtra Rent Control Act, 1999 if the same is applicable or leave the parties to have it determined by the Court or Tribunal under that Act - Merely because the rent has not been fixed under that Act does not mean that any other determination and contrary can be made by the AO. From the three aspects namely ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in the State is applicable but the parties are not at idem on the quantum of rent. Therefore, the proceedings in that behalf and particularly for fixation of standard rent were not initiated under the rent control legislation. Therefore, the Assessing Officer took upon himself the responsibility of fixing the fair/standard rent. Whether this step taken by the Assessing Officer is permissible in law or otherwise is the further question. Similarly, in some of the appeals, there is not an agreement of tenancy but of leave and license. Thereunder, license fee has been agreed between the parties. Further, the quantum of security deposit has also been stipulated in the agreement. Therefore, the question arises as to whether the security deposit which though refundable but without interest can be taken into consideration for holding that the agreed license fees does not reflect the market trend or market rate prevailing in the area. 3. For the purposes of answering these questions we would refer to the facts in Income Tax Appeal No.1213 of 2011. The assessment year in question therein is 2005-06. The brief facts are that the return of income for assessment year in question was filed o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Tax Act, 1961, for short the I.T. Act is clear. That has no relation to the rateable value determined by the municipal corporation. It has also no relation to any deposits or security amount obtained by the assessee like the respondents. Therefore, the attempt is to depress the rent. When such attempts are noticed, then, it can never be intended by the law that the Assessing Officer is obliged to adopt the municipal value. In the present case the matter has been completely distorted by the assessee. The reference to section 23(1)(b) is misplaced. The element of municipal property tax rate has, therefore, no relevance. On facts also, the relationship is admitted. The Assessing Officer has made a comparative study and analysed the prevailing rate. Mr. Chhotaray, therefore, submits that the findings at page 16 and 18 of the paper book would reflect that there was nothing erroneous or illegal in the manner in which the Assessing Officer proceeded to determine the rent. Mr. Chhotaray submits that section 23(1)(a) refers to a reasonable expectation with regard to the rent that can be obtained if the premises are let. The Assessing Officer has clearly gone by this requirement of the sec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d property. At the same time, the Tribunal failed to note that there is a contrary view taken in the case of the Income Tax Officer v. M/s. Baker Technical Services Private Ltd. Income Tax Appeal No.5262, 5264/Mum/2006. In such circumstances, Mr. Chhotaray submits that the impugned order be set aside and the appeal be allowed. 9. Mr. Chhotaray also submits that the Assessing Officer was of the view that the monthly rent shown was very low and did not represent the correct fair rental value of the property under section 23(1)(a) of the Act. Under section 23(1)(a), the annual value of the property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year (henceforth referred to as fair rental value of the property). The section mandates the Assessing Officer to determine the fair rental value of the property under section 23(1)(a). The Assessing Officer made enquiries to find out the comparable rent prevailing in the vicinity. He has prepared a chart of the comparable cases showing that the monthly rent per sq. ft. in the vicinity ranged between ₹ 79 to ₹ 110 per sq. ft. instead of ₹ 3.70 per sq. ft. shown by the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... termines the annual value by taking various factors into account. He may take recourse to different recognized methods. One important method is to find the prevailing market rate of rent in the area. In order to find it out, he may make inquiry with let out properties in the locality, make enquiry with the brokers, use internet for knowing the prevailing rate in the area, take the help of a valuer, adopt any other method. After collecting the information, the assessee is confronted with the data gathered and after considering his objections suitable adjustments are made to determine the correct annual value. It is submitted that valuation is an art and there are recognized methods. The Assessing Officer is capable of making the valuation on his own by adopting the appropriate method. Each property is unique so far its annual value is concerned. It is not correct to impose a standard annual value for all properties in a locality. Valuation of a property is distorted because of relation between parties, collusion, heavy security deposit. Therefore, each case needs to be addressed on its own facts and Assessing Officer is competent to handle this issue. It is respectfully submitted th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a certain percentage of the capital value of the property. Properties with area up to 500 sq. ft. would not pay the higher rate. The concept of determining the fair rent of the property is no longer there. Therefore, there would no longer be any commonality in the wordings of the provisions of the section 23(1)(a) of the Income Tax Act and the provisions of the Municipal Act which is the main plank of the argument for adopting the municipal value for income tax. Income Tax Department is accountable for collection under the Income Tax law and should not be dependent on municipal system which is not accountable to it. Therefore, the annual value of the property under the income tax law should be delinked from the municipal valuation. Municipal valuation can at best be a factor to be considered by the Assessing Officer and nothing more than that. The Assessing Officer can reject the municipal valuation for valid reasons. 15. Mr. Chhotaray then submits that heavy security deposit is a factor to be taken judicial notice of. In many cases heavy security deposits running into crores of rupees are taken by the landlord as a consequence of which the amount of rent is reduced. It is accep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax; (9) Order of Madras High Court dated 4th April, 2003 in case of N. Nataraj v. Deputy Commissioner of Income Tax and (10) [2011] 333 ITR 38 Commissioner of Income Tax v. Moni Kumar Subba 17. Mr. Chhotaray's submissions were adopted by Mr. Tejveer Singh appearing for the revenue in Income Tax Appeal Nos. 2447/2011, 819/2012, 820/2012, 821/2012, 827/2012, 1182/2012, 753/2012, 754/2012 and 794/2012 and Mr. Suresh Kumar. 18. Mr. Abhay Ahuja appearing for the revenue in some of the appeals submitted that in Income Tax Appeal No.5489 of 2010, the questions of law arise out of the letting of two flats by the private limited companies to its Directors. The flats are in a building known as Samudra Gaurav Apartments, Worli, Mumbai. The facts of the case in the first matter viz. Income Tax Appeal No. 5489 of 2010 for assessment year 2005-06 are that the assessee by reason of its holding two class 'A' shares of M/s. Samudra Gaurav Apartment Pvt. Ltd. from the year 1980 was entitled to use and occupy two flats admeasuring 5142 sq. ft. each with four covered garages bearing No.E-1, E-2, E-6 and E-13 of which the assessee has been given possessio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer held that the rent at which the property can be reasonably let out is definitely much more than the rent being charged from the director tenants. The Assessing Officer relied on the two judgments of Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee and Anr. 122 ITR 700 (SC). and T. V. Sundaram Iyengar and Sons Ltd. v. CIT [241 ITR 420 (Mad)]. The assessee filed appeal against the order of the Assessing Officer mainly on the ground that the Assessing Officer erred in not considering the provisions that the Annual Value of the property situated in a area where Rent Control Law applies cannot exceed the standard rent as per Maharashtra Rent Control Act, 1999. The assessee submitted that as per Municipal Records the fair market value of the said property was ₹ 24,288/- per year and the rent of ₹ 30,000/- for each of the properties being higher should be taxed as rental income. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's order including the finding that the assessee had not taken any recourse to section 8(1) of the Maharashtra Rent Control Act, 1999 for fixation of standard rent. The Commissioner of Income Tax (Appeal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... D 95 (Bom). stating that the methodology for arriving at the annual value of property under the provisions of section 23(1) of the Income Tax Act, 1961 was given therein; (iii) that the property is a tenanted property and the tenant is a protected tenant as per the orders of the Court and since the rent received by the assessee is more than the standard rent/municipal rateable value, the Assessing Officer has no option than to accept the rent received by the assessee. He accordingly directed the Assessing Officer to accept the rent offered by the assessee and determine the income from the house property accordingly. Similar facts exist for assessment year 2005-06 in the case of Commissioner of Income Tax-Central III v. Ramrikhdas Balkison Sons Pvt. Ltd. (ITXA 5356 of 2010) as well as for assessment year 2006-07 in the case of Commissioner of Income Tax-Central-III v. Ramgopal Ganpatrai Sons Pvt. Ltd. (ITXA 732ofo 2011) and Commissioner of Income Tax-Central-III v. Ramrikhdas Balkison Sons Pvt. Ltd. (ITXA 673 of 2011). 20. Mr. Ahuja, therefore, submits that findings by the Tribunal that the revised agreement is dated 14.08.2000 and after the enactment of the Maharashtra Ren ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Rent Control Act, 1999, the appellant revenue craves leave of this Court to adopt the arguments and submissions made by Shri P.C. Chhotaray in the case of Commissioner of Income Tax-12 v. Tip Top Typography (ITXA 1213 of 2011), and submit that Court be pleased to allow the appeals upholding the orders passed by the Assessing Officer and Commissioner of Income Tax (Appeals) determining ALV of the property. Alternatively, if this Court holds that the case of the assessees herein falls within the purview of the Maharashtra Rent Control Act, 1999, then, it is submitted on behalf of the appellant revenue that as no standard rent has been fixed by a Rent Controller or a Court either as per section 7(14)(a) or in accordance with section 8(1) of the Maharashtra Rent Control Act, 1999, nor is there any finding by the Tribunal that any standard rent was fixed prior to the Maharashtra Rent Control Act, 1999, this Court be pleased to apply the principles laid down by the Hon'ble Supreme Court in the case of Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee and Anr. (supra). In the event, this Court finds that the assessee's case/property falls within the ambit of the Maharashtr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Similar principle is laid down in the case of Motichand Hirachand reported in AIR 1968 Supreme Court 441. 23. Mr. Murlidhar, then, relied upon the decision of this Court in the case of M.V. Sonavala v. Commissioner of Income Tax reported in [1989]177 ITR 246. Mr. Murlidhar also relied upon the decision of this Court in the case of Smt. Smitaben N. Ambani v. Commissioner of Wealth Tax reported in [2010] 323 ITR 104. He has also relied upon the decision of the Calcutta High Court in the case of Commissioner of Income Tax v. Satya Co. Ltd. and the decision of the Full Bench of Delhi High Court in the case of Commissioner of Income Tax v. Mani Kumar Subba [2011]Vol.333 ITR 838. Mr. Murlidhar, therefore, submits that in all these decisions it has held that the rateable value fixed by the Municipal Corporation cannot be ignored or brushed aside. If the correctness of the municipal valuation was never disputed by the department, then, the same should be adopted as the annual value of the premises. In all these decisions, therefore, the principle laid down is that the department will have to bring in material to show as to how the municipal rateable value does not represent the correct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 23(1)(a) uses the expression 'reasonably be expected to let'. It is for this reason that the municipal rateable value has been correctly adopted for the purpose of determining the annual value under section 23(1)(a). The proposition by the Revenue that the Assessing Officer can adopt the 'fair rent' based on information obtained from local enquiries, brokers and the internet is totally unwarranted. In cases where the property is let out, ordinarily the license fee agreed between a willing licensor and a willing licensee uninfluenced by any extraneous circumstances would afford reliable evidence of what the landlord might reasonably expect to get from a hypothetical tenant. If such rent is higher than the municipal rateable value, the provisions of sub-clause (b) of section 23(1) would apply. The action of the Assessing Officer in determining the annual value by (i) imputing notional interest on the security deposit to the actual rent received while separately assessing the income earned on the security deposit (equivalent to 12 months advance license fee) offered to tax under the head 'other sources' [Reclamation Real Estate Co. India Pvt. Ltd.] (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... first time in the assessment year 2005-06, the Assessing Officer held that the transaction between the respondents and the tenants is camouflage and colourable device to evade the tax. 27. An appeal was preferred before the Commissioner of Income Tax (Appeals) against the addition made by the Assessing Officer and the said appeal was partly allowed on 4th February, 2009. By the impugned order, the Tribunal set aside the Annual Letting Value determined by the Assessing Officer and sustained by the Commissioner of Income Tax (Appeals). The Tribunal held that the transaction between the respondents and the tenants is not a colourable device. It is submitted, therefore, the tax effect, as stated by the revenue in the memo of appeal is ₹ 6.84 lakhs which is much below ₹ 10 lakhs. Therefore, no appeal can be filed to the Tribunal. Further and without prejudice, there is a pure finding of fact and which cannot be said to be perverse. All the tenants except one have offered the amount received from the sub-tenant to tax. The transaction between the respondent-assessee and the group entities is held to be genuine. It is purely a commercial transaction and cannot be said to be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y to Income Tax Proceedings. However, it appears that conclusion reached based on identical facts in the previous years need not be given a go by in the absence of any compelling circumstance. In this respect, reliance is placed on following decisions: (1) Radhasoami Satsang 193 ITR 321 (SC); (2) Berger Paints India Ltd. v. CIT 266 ITR 99 (SC); (3) Baijnath Brijmohan Sons Ltd. 161 ITR 234 (Bom); (4) H A Shah 30 ITR 618 (Bom); and (5) CIT v. Paul Brothers 216 ITR 548 (Bom). 28. Mr. Shah submits that in view of the above submissions, the impugned order passed by the Tribunal needs to be upheld and appeal filed by the revenue is liable to be dismissed. 29. For properly appreciating the rival contentions it would be necessary to make a reference to section 22 and 23 of the Income Tax Act, 1961. Section 22 falls in Chapter IV of the Income Tax Act which is entitled as computation of total income. Section 14 is the first section appearing in this Chapter and it sets out the heads of income. By section 14(A) the expenditure incurred in relation to the income which has to be excluded from the total income is set out. Then, there is a sub-title/heading A. Salaries . ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that income from house property shall be taken as a component of the income chargeable to tax. How that income from house property has to be 'computed' is then provided by the legislature. That is the annual value of the property. Thus, the legislature deems the annual value firstly to be the sum for which the property might reasonably be expected to be let from year to year. In the event, the property which consists of any buildings or lands appurtenant thereto, the actual rent received or receivable by the owner in respect thereof if in excess of the sum referred to in clause (a), it is that amount so received or receivable which shall be deemed to be the annual value for the purposes of computing the tax under the head income from house property. 33. In the present appeals, the arguments proceed on the footing that in computing the annual value of house property under section 23 (1)(a) is the Assessing Officer required to adopt the municipal rateable value of the property. However, in all the appeals before us, the factual position is that the property or part thereof is let or given on leave and license basis. The Assessing Officer has disbelieved the assessees in c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d as comparable. He submits that these instances are of leave and license agreement. Therefore, the rate per sq.ft. and based on which the license fees are determined would demonstrate as to how the amount decided or determined as license fees by the assessee with the related party M/s. Reliance is lesser than the prevailing rate. 36. Thereafter, the Assessing Officer dealt with the stand of the assessee and which was supported by the assessee by some decisions of Courts of law. This is evident from paras-3.8 onwards. The Assessing Officer held that the assessee has let out the premises to M/s. Reliance Industries Ltd. for a period of 33 months as per the leave and license agreement entered into between the assessee and M/s. Reliance Industries Ltd. dated 1st April, 2004. The Assessing Officer held that the relationship between the assessee firm and the tenants is established as both belong to the Reliance Group. Then, he held that the annual value of the premises let out by the assessee can be estimated as per the provisions of section 23(1)(a) and the estimate can be of an amount higher than the standard or 'fair rent' determined as per the Rent Control Act/municipal r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ich the assessee borrowed funds. This order of the Assessing Officer was confirmed in appeal by the Commissioner of Income Tax (Appeals). Being aggrieved by this order, the assessee carried the matter in the Tribunal. The Tribunal on facts found that the actual rent received by the assessee, even without taking into account the notional interest, was more than the annual value determinable under section 23(1)(a) of the Act and it is for this reason that the Department invoked only section 23(1)(b) of the Act. The Tribunal concluded that section 23(1)(b) only applied to cases of actual rent being received by the assessee and that the said section does not apply to cases falling under section 23(1)(a) which permits adoption of notional value as annual letting value of the property. Hence, the Tribunal allowed the appeal. 41. This Court, on facts further noted that the department has invoked section 23(1)(b) of the Act and not section 23(1)(a). Further the Tribunal held that an annual rent received by the assessee even without taking account the notional interest was more than Annual Letting Value of the property determinable under section 23(1)(a) of the Income Tax Act. The Divisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rest, was more than the annual value determinable under section 23(1)(a). This finding of fact has not been challenged by the department in this appeal. On the contrary, the department has contended that in this case section 23(1)(b) was applicable. They have not relied on the provisions of section 23(1)(a). The question as to whether notional interest could have been taken into account under section 23(1)(a) does not arise in this appeal and we do not wish to go into that question in this appeal. However, the moot point which needs to be considered in this case is whether notional interest could form part of the actual rent received by the assessee under section 23(1)(b). It is important to note that the property is covered by the provisions of the Bombay Rent Act. The scheme of section 23(1)(b), in contradistinction to section 23(1)(a), shows that fair rent is the basis to determine the annual value of a property. This was the sole basis prior to the assessment year 1975-76. However, after the amendment of section 23(1) by the Taxation Laves (Amendment) Act, 1975, the legislature has clearly laid down under section 23(1)(b) that when the actual annual rent received or receivable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terminable as above, then actual rent shall constitute the annual value under section 23(1)(b). Now, applying the above test to the facts of this case, we find a categorical finding of fact recorded by the Tribunal that the actual rent received by the assessee was more than the fair rent. Under the above circumstances, in view of the said finding of fact, we do not see any reason to interfere. 42. The Division Bench expressly kept open the question as to whether notional interest can form part of the fair rent under section 23(1)(a) of the Income Tax Act, 1961. 43. It also appears that both, the judgment in the case of Satya Co. (supra) rendered by a Division Bench of the Calcutta High Court and the judgment of this Court in the case of J.K. Investors (Bombay) (supra) were considered by the Full Bench of the Delhi High Court on which decision heavy reliance is placed by the counsel for the assessee. The Full Bench was called upon to decide as to how to determine fair rent of the property and, then, to find out as to whether the actual rent received is less or more than the fair rent so that higher of the two is taken as Annual Letting Value under section 23(1)(b) of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere is no mandate of law whereby the AO could convert the depression in the rate of rent into money value by assuming the market rate of interest on the deposit as the further rent received by way of benefit of interest-free deposit. But s. 23, as already noted, does not permit such calculation of the value of the benefit of interest-free deposit as part of the rent. This situation is, however, foreseen by Schedule III to the WT Act and it authorises computation of presumptive interest at the rate of 15 per cent. as an integral part of rent to be added to the ostensible rent. No such provision, however, exists in the Act. That being so, the act of the AO in presuming such notional interest as integral part of the rent is ultra vires the provision of s. 23(1) and is, therefore, unauthorised. Though what has been urged on behalf of the Revenue is not to be brushed aside as irrational, yet the contention is not acceptable as the law itself comes short of tackling such fact-situation. This view of the Calcutta High Court has been accepted by a Division Bench of this Court as well in the case of Commissioner of Income Tax v. Asian Hotels Limited [(2008) 215 CTR (Del.) 84] holding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his Court and Operative words in Section 23 (1)(a) of the Act are the sum for which the property might reasonably be expected to let from year to year . These words provide a specific direction to the Revenue for determining the fair rent . The Assessing Officer, having regard to the aforesaid provision is expected to make an inquiry as to what would be the possible rent that the property might fetch. Thus, if he finds that the actual rent received is less than the fair/market rent because of the reason that the assessee has received abnormally high interest free security deposit and because of that reason, the actual rent received is less than the rent which the property might fetch, he can undertake necessary exercise in that behalf. However, by no stretch of imagination, the notional interest on the interest free security can be taken as determinative factor to arrive at a fair rent . The Provisions of Section 23(1)(a) do not mandate this. The Division Bench in Asian Hotels Limited [2010] 323 ITR 490 (Delhi), thus, rightly observed that in a taxing statute it would be unsafe for the Court to go beyond the letter of the law and try to read into the provision more than what i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or benefit is sought to be treated as income, specific provisions in that behalf have been made in the Act by including such benefit, etc., in the definition of the income under section 2(24) of the Act. Specific provisions have also been made under different heads for adding such benefits or perquisites as income while computing income under those heads, e.g., salary, business. The computation of the income under the head 'House property' is on a deemed basis. The tax has to be paid by reason of the ownership of the property. Even if one does not incur any sum on account of repairs, a statutory deduction therefore is allowed and where on repairs expenses are incurred in excess of such statutory limit, no deduction for such excess is allowed. The deductions for municipal taxes and repairs are not allowed to the extent they are borne by the tenant. However, even such actual reimbursements for municipal taxes, insurance, repairs or maintenance of common facilities are not considered as part of the rent and added to the annual value. Accordingly, there can be no scope or justification whatsoever for making any addition for any notional interest for determining the annual value ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ent valuation. We may profitably reproduce the following observations of the Supreme Court in the case of Corporation of Calcutta v. Smt. Padma Debi, AIR 1962 SC 151, 153. A bargain between a willing lessor and a willing lessee uninfluenced by any extraneous circumstances may afford a guiding test of reasonableness. An inflated or deflated rate of rent based upon fraud, emergency, relationship and such other considerations may take it out of the bounds of reasonableness. Thus the rateable value, if correctly determined, under the municipal laws can be taken as ALV under Section 23(1)(a) of the Act. To that extent we agree with the contention of the learned Counsel of the assessee. However, we make it clear that rateable value is not binding on the assessing officer. If the assessing officer can show that rateable value under municipal laws does not represent the correct fair rent, then he may determine the same on the basis of material/ evidence placed on record. This view is fortified by the decision of Patna High Court in the case of Kashi Prasad Kataruka v. CIT [1975] 101 ITR 810. The above discussion leads to the following conclusions: (i) ALV would be the sum at ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ifferent view cannot be taken. We respectfully concur with the view taken in this Full Bench decision of the Delhi High Court. 47. We are of the view that where Rent Control Legislation is applicable and as is now urged the trend in the real estate market so also in the commercial field is that considering the difficulties faced in either retrieving back immovable properties in metro cities and towns, so also the time spent in litigation, it is expedient to execute a leave and license agreements. These are usually for fixed periods and renewable. In such cases as well, the conceded position is that the Annual Letting Value will have to be determined on the same basis as noted above. In the event and as urged before us, the security deposit collected and refundable interest free and the monthly compensation shows a total mismatch or does not reflect the prevailing rate or the attempt is to deflate or inflate the rent by such methods, then, as held by the Delhi High Court, the Assessing Officer is not prevented from carrying out the necessary investigation and enquiry. He must have cogent and satisfactory material in his possession and which will indicate that the parties have con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere must be cogent and reliable material. 49. We are of the opinion that market rate in the locality is an approved method for determining the fair rental value but it is only when the Assessing Officer is convinced that the case before him is suspicious, determination by the parties is doubtful that he can resort to enquire about the prevailing rate in the locality. We are of the view that municipal rateable value may not be binding on the Assessing Officer but that is only in cases of afore-referred nature. It is definitely a safe guide. 50. We have broadly agreed with the view taken by the Full Bench of the Delhi High Court. Hence, the issue of determination of the fair rental value in respect of properties not covered by or covered by the Rent Control Act is to be undertaken in terms of the law laid down in the Full Bench decision of the Delhi High Court. 51. We quite see the force in the arguments of Ms. Vissanjee that ordinarily the license fee agreed between the willing licensor or a willing licensee uninfluenced by any extraneous circumstances would afford reliable evidence of what the landlord might reasonably be expect to get from a hypothetical tenant. She has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ercise contemplated by the rent control legislation for fixation of standard rent. The attempt by the Assessing Officer to override the rent control legislation and when it balances the rights between the parties has rightly been interfered with in the given case by the Appellate authority. The Assessing Officer either must undertake the exercise to fix the standard rent himself and in terms of the Maharashtra Rent Control Act, 1999 if the same is applicable or leave the parties to have it determined by the Court or Tribunal under that Act. Until, then, he may not be justified in applying any other formula or method and determine the fair rent by abiding with the same. If he desires to undertake the determination himself, he will have to go by the Maharashtra Rent Control Act, 1999. Merely because the rent has not been fixed under that Act does not mean that any other determination and contrary thereto can be made by the Assessing Officer. Once again having respectfully concurred with the judgment of the Full Bench of the Delhi High Court, we need not say anything more on this issue. 53. Thus, apart from the three aspects namely of a municipal valuation, of obtaining interest ..... X X X X Extracts X X X X X X X X Extracts X X X X
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