TMI Blog2017 (12) TMI 1325X X X X Extracts X X X X X X X X Extracts X X X X ..... had adopted the multiplication factor of 21.88 on the Municipal Tax, for the property situated in North Beach Road. The method in which annual value is to be determined is clearly set out on the above section. No doubt, Multiplication valuation can be a pointer as to the reasonable rental that can be fetched for a given property. However, in my opinion, a multiplication factor derived from one set of data for a given property, cannot be applied blindly to another property located at a different place, even though, both are in the same city. The methodology followed by the lower authorities was in my opinion entirely unscientific. Ld. Commissioner of Income Tax (Appeals) though he gave partial relief to the assessee did not change or appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unicipal tax of ₹ 1,51,522/- was deducted. Annual rent for the property at North Beach Road, Rajaji Salai was shown as ₹ 1,05,894/- against which Municipal Tax of ₹ 1,09,590/- was deducted. Thus, the rental income from the latter building reflected a loss of ₹ 3,696/-. Ld. Assessing Officer was of the opinion that for the Cathedral Road building Municipal Tax paid came to 4.57% of the annual rent. In other words, as per the ld. Assessing Officer rental shown by the assessee for the Cathedral Road building was 21.88 times of the Municipal Tax. By applying this ratio, ld. Assessing Officer came to a conclusion that for the Rajaji Salai building, rentals ought have been ₹ 23,97,830/- viz 21.88 times of Municipal t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act, 1961 (in short the Act ). As per the assessee the data relevant for such computation was as under:- Particulars Municipal Valuation P.A. Rent receivable Higher of the above Actual rent Vacancy allowance Gross annual value Portion 1 212176 210000 212176 192489 17511 194665 Portion 2 476440 280920 476440 23409 257511 218929 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was ₹ 52,613/- only as per the ld. Commissioner of Income Tax (Appeals). Thus, according to him, rentals from North Beach Road property could be considered only as ₹ 11,51,172/- after deducting standard deduction u/s.24 of the Act. He directed the ld Assessing Officer to consider the annual rent of the North Beach Road property at ₹ 11,51,172/- against ₹ 23,97,830/- considered in the assessment. 6. Now before me, assessee is aggrieved on the methodology adopted for fixing the annual value of her property at North Beach Road. According to her annual value shown in the return of income was correct. As against this, Revenue is aggrieved that ld. Commissioner of Income Tax (Appeals) directed application on multiplica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question before me is whether the same multiplication factor can be adopted wherever a property is located. Ld. Assessing Officer had adopted the multiplication factor of 21.88 on the Municipal Tax, for the property situated in North Beach Road. At this juncture, it is apposite to reproduce Section 23 of the Act. 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) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable ; or ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) the house or part of the house is actually let during the whole or any part of the previous year ; or (b) any other benefit therefrom is derived by the owner. (4) Where the property referred to in sub-section (2) consists of more than one house? (a) the provisions of that sub-section shall apply only in respect of one of such houses, which the assessee may, at his option, specify in this behalf ; (b) the annual value of the house or houses, other than the house in respect of which the assessee has exercised an option under clause (a), shall be determined under sub-section (1) as if such house or houses bad been let . The method in which annual value is to be determined is clearly set out on the above secti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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