TMI Blog2015 (4) TMI 407X X X X Extracts X X X X X X X X Extracts X X X X ..... rd rent has not been fixed, the Assessing Officer shall determine the same in accordance with the relevant rent control legislation. If the fair rent is less than the standard rent, then, it is the fair rent which shall be taken as annual letting value and not the standard rent. This will apply to both, self acquired properties and general cases where property is let out. While carrying out exercise under section 23(1) of the Act, the departmental authorities shall follow these guidelines reproduced above provided in the Full Bench decision of the Delhi High Court and followed by a Division Bench of this Court in the case of Tip Top Typography (2014 (8) TMI 356 - BOMBAY HIGH COURT). Reference will also have to be made to a decision of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... August, 1988 under section 143(3) of the Income Tax Act, 1961, followed the view taken in the earlier years in respect of the same Assessee to the effect that the annual value should be determined on the basis of the standard rent and not on the basis of the rateable value as determined by the Municipal Corporation. He further took the view that in determining the standard rent, the return on the investment should be calculated at 12% and computed the income from house property at ₹ 57,760/- instead of ₹ 979/- as per the return filed by the Appellant/Assessee. 3. Being aggrieved by the order, the Appellant preferred an Appeal to the Commissioner (Appeals), who dismissed the Appeal upholding the assessment made. In further Ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome on the basis of the Municipal Rateable value was erroneous and prejudicial to the interest of revenue? 5. The Tribunal had proceeded on the basis of decisions in respect of the same Assessee in the previous years. 6. Before us, Mr. Mistrilearned Senior Counsel appearing for the Assessee/Appellant has taken us through the decision of this Court in the matter of M. V. Sonavala vs. Commissioner of Income Tax reported in (1989) 177 ITR 246 , in which, this Court had occasion to consider various questions (in relation to various assessment years). The Division Bench of this Court inter alia considered the issue of computation of annual value of the properties within the meaning of section 23(1)(a) of the Income Tax Act, 1961 as appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of computing the annual letting value, sum for which the property might reasonably be let from year to year or the annual municipal value is to be taken. The Division Bench of this Court followed the view taken by the Calcutta High Court and directed the Department to determine the annual value of the properties accordingly. 8. In another decision of this Court in the case of Smt.Smitaben N. Ambani vs. Commissioner of WealthTax reported in (2010) 323 ITR 104 (Bom.), one of the questions raised was, Whether on the facts and in the circumstances of the case, the Tribunal was right in law in holding that while applying the provisions of rule 1BB for valuing the selfoccupied property, municipal rateable value has to be adopted instead of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence unless the rent is inflated/deflated by reason of extraneous consideration. (iv) Such ALV, however, cannot exceed the standard rent as per the Rent Control Legislation applicable to the property. (v) if standard rent has not been fixed by the Rent Controller, then it is the duty of the assessing officer to determine the standard rent as per the provisions of rent control enactment. (vi) The standard rent is the upper limit, if the fair rent is less than the standard rent, then it is the fair rent which shall be taken as ALV and not the standard rent. We would like to remark that still the question remains as to how to determine the reasonable / fair rent. It has been indicated by the Supreme Court that extraneous circumstan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... standard rent, then, it is the fair rent which shall be taken as annual letting value and not the standard rent. This will apply to both, self acquired properties and general cases where property is let out. While carrying out exercise under section 23(1) of the Act, the departmental authorities shall follow these guidelines reproduced above provided in the Full Bench decision of the Delhi High Court and followed by a Division Bench of this Court in the case of Tip Top Typography (supra). 12. Reference will also have to be made to a decision of this Court in the case of Smt. Kokilaben D. Ambani vs. The Commissioner of Income Tax in Income Tax Reference No. 513 of 1997 and connected matters decided on 11th September, 2014, wherein, we ha ..... X X X X Extracts X X X X X X X X Extracts X X X X
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