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TMI Blog2017 (9) TMI 841X X X X Extracts X X X X X X X X Extracts X X X X ..... Act". Heard both sides. Case file(s) perused. 2. A combined perusal of both the parties' respective pleadings indicate that their identical grievance in nut shell revolves around computing income from house property in respect of assessee's properties A & B comprising of industrial shed at plot no.37-B and 5/1/B situated in phase-1, GIDC, Industrial Estate, Vatva, Ahmedabad. The assessee had given it to its sister concern M/s. Patel Alloy Steel Pvt. Ltd. (PASPL) without charging any rent in earlier assessment years. The Assessing Officer framed a regular assessment on 12.03.2013 computing net addition of Rs. 34,59,456/- under the head income from house property at Rs. 49,42,080/-. It emerges that the very issue had arisen for the first ti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rk for determining the notional income in question. 5. We have heard rival submissions in tune with above narrated pleadings. We sought to know about status of identical proceedings in preceding assessment years qua the instant issue. Case file indicates that this tribunal in a batch of cases ITA Nos. 2639/Ahd/2013 and four other appeals in assessment years 2005-06, 2007-08 to 2009-10 decided on 17.04.2015 has already dealt with all these arguments in arriving at interest rate of 8.5% to form reasonable basis as under: "4. The facts of the case are that the assessee has given the immovable property which was the industrial shed to the sister concern without charging any rent. The Assessing Officer, in his order u/s 143(3) dated 31.12.200 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . by applying the reasonable rate of interest on the cost of immovable property. Needless to mention, he will allow adequate opportunity of being heard to the assessee while adjudicating the matter. 5. The Assessing Officer gave effect to the order of ITAT vide his order dated 03.12.2012 passed u/s 143(3) r.w.s. 254 of the Act, wherein the Assessing Officer estimated income at the rate of 17.25% of the investment in the property by the assessee. On appeal, the CIT(A) vide his order dated 11.09.2013 computed the income at 8.5% of the cost of the property and allowed part relief to the assessee. The relevant portion in the order of the CIT(A) reads as under:- "2.2 I have carefully considered the rival contentions. I am of the opinion th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Property : Rs. 11,93,094/- Accordingly the income from house property is worked out at Rs. 11,93,094/- the appellant will get a relief of Rs. 12,28,185/-. This ground of appeal is partly allowed." 6. Both the parties, aggrieved with the order of the ld. CIT(A), are in appeal before us. 7. We have heard both the sides and perused the material placed before us. At the time of hearing before us, the ld. Counsel for the assessee stated that the Assessing Officer has estimated the interest which the assessee would have been required to pay had he borrowed the money for the purpose of investment in the property. He submitted that in the case of the assessee, income from the property is to be estimated and not interest expenditure on acqu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at this issue is squarely covered by the decision of the Hon'ble Jurisdictional High Court in the case of Sakarlal Balabhai vs Income-Tax Officer, reported in 100 ITR 97. In the first round of appeal also, the ITAT has set aside the matter back to the file of the Assessing Officer for determining the ALV as per the above decision of Hon'ble Jurisdictional High Court. In the above mentioned case, their Lordships of the Hon'ble Jurisdictional High Court have considered various decisions from other courts and also from book Ryde on Rating and thereafter, concluded as under at page No.107:- "17. Though the above passages are more or less in the context of ascertaining rateable value of property, they none-the-less assure us that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... et. Therefore, in our opinion, the CIT(A) was fully justified in estimating the ALV on the basis of interest which assessee would have earned on the investment of the similar amount. The ld. Counsel for the assessee had argued that the rate of interest applied by the CIT(A) at 8.5% is excessive. In support of which, he gave various examples of investment in FDRs which faced the interest ranging from 5.52% to 7.5%. Copies of those certificates from the bank are placed at page No. 29 onwards of the assessee's paper-book. However, we find that those investments were for a very short period. In first case where interest rate was 5.5%, the investment was only for 46 days. In another case where the interest was 5.6%, it was only for 31 days. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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