9911796707
TMI Blog2013 (1) TMI 872X X X X Extracts X X X X X X X X Extracts X X X X ..... alabar Hill was given on rent to Ms. Sonali Patel, daughter of Mr. R.J. Patel, one of the Directors of the assessee company at a monthly rent of ₹ 5,000/-, as per the agreement between Ms. Sonali Patel and the assessee, which also gave her a right of first purchase of the said flat. On an inquiry from the AO, the above details were submitted to him, which did not find favour with the AO. The AO, therefore, went on to estimate the rent as reasonably expected in the area, which, according to the AO, would have been at ₹ 30,000/- per month i.e. ₹ 3,60,000 per annum, and made an addition of ₹ 3,00,000 (Rs. 3,30,000 - ₹ 60,000). 3. Aggrieved, the assessee is now before the ITAT. 4. Before us, the AR submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1957 and the Punjab Municipal Act, 1911. It was therefore held adopting identical line of reasoning that even if the standard rent of a building has not been fixed by the Controller, the annual value of the building as per section 23(1) of the Income Tax Act must be held to be a standard rent determinable under the provisions of the Rent Control Act and not the actual rent received by the landlord from the tenant. The Hon'ble Apex Court also observed that this interpretation which was being placed on the language of section 23(1) of the Income Tax Act can be said to have received legislative approval by the amendment made in the said provisions whereby it was provided in section 23(1)(b) that where the property is let and the annual rent re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a High Court held that the Municipal valuation and annual value u/s 23(1)(a) of the income Tax Act thus are one and same. As noted by the Tribunal in its order passed in the case of Reclamation Realty India P. Ltd. (supra) the said decision of the Hon'ble Calcutta High Court in the case of Prabhabati Bansali (supra) has been subsequently followed by the Hon'ble Bombay High Court in the case of M.V. Sonavala vs. CIT 177 ITR 246 (Bom) wherein the question posed to Their Lordships was whether the actual compensation received could be taken as annual value of the property as against the Municipal Ratable Value and the same was answered by the Hon'ble Bombay High Court in the negative that is against the Department and in favour of the assessee. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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