TMI Blog2018 (7) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... s - assessment made by the Assessing Officer that once the premises was rented out, the same must have been rented out in the earlier assessment years also - Held that:- No doubt, the basis of estimation of the rental income is the actual rent shown by the assessee as found in the rent agreement. What is taxed under the head ‘income from house property’ is the Annual Let Out Value [ALV] of the house property and the ALV is determined as per section 23 of the Act wherein it has been provided that the ALV shall be the sum for which the property might reasonably be expected to let from year to year or the actual rent received/receivable. Thus, in the case in hand, the ALV has been estimated on the basis of actual rent received by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ises of Shri Jatinder Singh Sharma, Smt. Manju Sharma and M/s Kamdhenu Restaurant. Certain incriminating documents relating to rental income and unexplained cash were found and seized on the strength of which the Assessing Officer framed assessment. The matter travelled upto the Tribunal and the Tribunal vide order dated 10.01.2011 in ITA No. 55/DEL/2009 restored the assessment to the file of the Assessing Officer to reframe the assessment. 4. Pursuant to the directions of the Tribunal, fresh proceedings were started. During the course of search some rent agreements belonging to Shri J.S. Sharma, HUF were found. Shri J.S. Sharma, HUF had inherited a temple known as Yog Maya Mandir with other family members. Shri J.S. Sharma, HUF inherit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 77; 50,000/- p.m. 8. On the basis of rental income shown by the assessee, the Assessing Officer presumed that in the earlier years of the block period, the assessee must have received rental income and accordingly computed the total undisclosed income of the block period as under: Previous Year (Chronologically) Asstt. Year Total income For the year Returned Income Undisclosed income 1st 1997-98 2,00,800 Nil 2,00,800 2nd. 1998-99. 2,10,800 Nil 2,10,800 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... terial and other documents/information found and gathered during the course of search. He should not have gone on to estimate the income of the appellant for the whole block period by extrapolation. Such powers of extrapolation of income to earlier years is not available to the AO if no seized material, documents or books of accounts have been found during the course of search, indicating that the appellant had earned unaccounted income in similar fashion in earlier years also. The law has been clearly laid down by Hon'ble Supreme Court in the case of Hotel Blue Moon (supra) and Hon ble Jurisdictional High Court in the case of Ashok Khetrapal (supra). Therefore, the AO is hereby directed to re-calculate the income of the appellant on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he authorities below. The undisputed fact is that the assessee HUF inherited a famous temple known as Yogmaya Mandir which was an ancestral property and the assessee HUF became pujari with other family members. There is also no dispute that Shri J.S. Sharma with his other family members was residing in the temple premises. It is also not in dispute that during the search operation, certain rent agreements were found and on the basis of which the Assessing Officer came to the know that the temple premises was rented out to Shri Dalip Gupta, Satish Chander Gupta and later on to Shri Adarsh Gupta and Smt. Kanchan Gupta. Rent shown in the rent agreement with these persons was offered by the assessee-HUF in the return of income. It is also no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s taxed under the head income from house property is the Annual Let Out Value [ALV] of the house property and the ALV is determined as per section 23 of the Act wherein it has been provided that the ALV shall be the sum for which the property might reasonably be expected to let from year to year or the actual rent received/receivable. Thus, in the case in hand, the ALV has been estimated on the basis of actual rent received by the assessee in subsequent assessment years. But, at the same time, there is no evidence on record which could suggest that the properties were actually let out in the earlier assessment years. 18. But the ALV has to be taxed and, therefore, to this extent, we agree with the ld. DR. Since the letting out of the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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