TMI Blog2018 (5) TMI 45X X X X Extracts X X X X X X X X Extracts X X X X ..... r the relevant rent control legislation and to take the fair rent or the standard rent, whichever is lower, as the ALV of the building. In the case in hand, such and exercise does not seem to have been undertaken by the AO and also the grievance of the assessee is that the source of taking non relevant to the fair rent or the report of the inspector are revealed so that the assessee could have had an opportunity to ask the authorities for determination of the correct ALV. Thus while affirming the action of the authorities below in bringing the ALV of the premises at 9, Tolstoy Marg, Connaught Place, New Delhi to tax, we deem it just and proper to set aside the issue relating to the determination of the correct and proper ALV in the light of the decision of the Hon’ble jurisdictional High Court in the case of Moni Kr. Subba (2011 (3) TMI 497 - DELHI HIGH COURT ). - I.T.A. No.620/Del/2015 - - - Dated:- 24-4-2018 - SHRI G.D. AGRAWAL, PRESIDENT AND SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER For The Appellant : Shri Ashwani Taneja Shantanu Jain For The Respondent : Shri Ravi Kant Gupta ORDER PER NARASIMHA K. CHARY, JM Challenging the orders of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not income from property as was decided by the Hon ble Gujarat High Court in the case of CIT vs Neha Builders (P) Ltd., 164 Taxmann 342. It is further submitted on behalf of the assessee that revenue does not dispute the fact that the assessee has been dealing in the real estate i.e. acquisition and construction of property for sale and in that process the unsold property has been shown as stock in trade, and in such a situation, it cannot be said that the notional income from the property could be brought to tax under the head Income from house property . For the purpose of analogy, reliance is placed on the decision of the Hon ble jurisdictional High Court in the case of Uberoisons (Machines) Ltd. vs CIT, 173 Taxmann 262. 6. The next contention of the assessee is that even if we assume for a while that the provisions u/s 22 of the Act are attracted, still the determination of the rental income at ₹ 58,80,000/- is not justified. Though the learned AO has stated in his order that he had gathered the detail in respect of fair market value on enquiry from the internet and through the inspector of the concerned circle, no specific source from which such information was col ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ese facts are concerned, no material is placed before us to establish that the assessee is in physical occupation of this particular premise. In the circumstances, the question that arises is whether the authorities below are justified in bringing the notional income to tax under the head income from house property instead of returning a finding that any income from such building has to be assessed as business income and in the absence of any real income from the building, nothing has to be brought to tax. On a careful consideration of facts involved in this matter and the contention of the assessee that the building is held as stock-in-trade in the first place and no real income is derived from this building in the second place, we have gone through the judgment of the Hon ble jurisdictional High Court in CIT vs Ansal Housing and finance Leasing Co. Ltd. (supra) wherein the relevant paragraph reads as follows: 13. In the present case, the assessee is engaged in building activities. It argues that flats are held as part of its inventory of stock in trade, and are not let out. The further argument is that unlike in the other instances, where such builders let out flats, here t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 11. Now coming to the question of the quantification of ALV, the Full Bench of the Hon ble jurisdictional High Court in the case of CIT vs Moni Kumar Subba(2011) 330ITR 38, held that,- 20. The above discussion leads to the following conclusions : ( i) Annual letting value would be the sum at which the property may be reasonably let out by a willing lessor to a willing lessee uninfluenced by any extraneous circumstances. ( ii) An inflated or deflated rent based on extraneous consideration may take it out of the bounds of reasonableness. ( iii) Actual rent received, in normal circumstances, would be a reliable evidence unless the rent is inflated/deflated by reason of extraneous consideration. ( iv) Such annual letting value, 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 AO 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 ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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