TMI Blog2015 (5) TMI 548X X X X Extracts X X X X X X X X Extracts X X X X ..... ed to let from year to year and the same is to be compared with the actual rent received. If the rent so received or receivable is higher than the amount at which it would be reasonably expected to let from year to year, then the actual rent received will be adopted as an annual value. The swimming pool and health club were not business apparatus and were not used for carrying on business of trading or manufacturing or professional activities. Hence, the swimming pool could not be treated as plant. See Anand Theatre [2000 (5) TMI 4 - SUPREME Court ] - AO shall proceed to determine the annual letting value (ALV) of the suit property in respect of the years 1990-91 and 1992-93 in terms of the above directions. - ITA 266/2002 - - - Dated: ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ty for the residence. The lessee i.e. DLF made some alterations in the properties at their cost in the earlier years. In AY 1990-91 and 1991-92 the assessee included ₹ 43,345/- in their returns as annual letting value ( ALV ) of the properties based upon municipal valuation and for the subsequent years the ALV returned was ₹ 52,540/- again based on municipal valuation. The AO, inter alia, adopted the ALV of ₹ 4,72,496/- for all the three AYs. This was based on the cost of the construction of the property and value of the land to the assessee. The CIT(Appeals) by common order of 25.5.1995 allowed the assessee s plea and followed his previous orders. Those orders had been ultimately upheld by the ITAT for several previous ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... light of material available on record and the judicial pronouncements cited at the Bar. The issue before us as raised in the question referred to this Special Bench is relating to the determination of ALV of the property belonging to the assessee and situated at No. 14-16, Aurangzeb Road, New Delhi in accordance with law. The relevant provisions governing the determination of ALV are contained in Section 23 and Sub-section (1) thereof, being relevant in the present context, the provisions thereof are extracted below for ready reference: 23. (1) For the purposes of Section 22, the annual value of any property shall be deemed to be: (a) the sum for which the property might reasonably be expected to let from year to year; or (b) wher ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... year, then the actual rent received will be adopted as an annual value. As held by Hon'ble Delhi High Court in the case of John Tinson Co. (P) Ltd. v. CAT (supra), the standard rent of a property is synonymous to the sum for which the property might reasonably be expected to let from year to year and the AO, therefore, is duty-bound to calculate such standard rent. It was also held by the Hon'ble Delhi High Court that it is not necessary that standard rent should be fixed by the Rent Controller under the Rent Control Act for it to be taken into reckoning for the purposes of Section 23(1) and even the AO can fix the same adopting the principles and methodology laid down in the relevant rent laws. In the case of CIT us. Raghubir S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case so require. It was held that the amount calculated in accordance with the relevant formula set out in Section 6 would, therefore, ordinarily represent the standard rent of the building unless the landlord or the tenant as the case may be can persuade the Controller that there are circumstances requiring adjustment in the amount so arrived at. The annual value of a building as governed by the Delhi Rent Control Act, 1958 must be limited to the measure of standard rent determinable under that Act and the landlord cannot reasonably expect to get more than the standard rent payable in accordance with the principles laid down in the Delhi Rent Control Act, 1958. It was held that in a case where the standard rent of a building is not fixed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere provided to the Chairman and the Directors residing in the aforesaid bungalows. The swimming pool and health club were not business apparatus and were not used for carrying on business of trading or manufacturing or professional activities. Hence, the swimming pool could not be treated as plant. The Ld. CIT(A) correctly relied on the supreme court decision in Anand Theatre reported in 244 ITR 192. We do not see any infirmity in the order of the Ld. CIT(A) for the assessment year under consideration. 12. As a consequence of the above discussion, since the impugned order has been effectively overruled and the earlier view affirmed, the remand order should not be only in terms of para 24 but on due examination of the decision of the Sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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