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TMI Blog2018 (8) TMI 1620X X X X Extracts X X X X X X X X Extracts X X X X ..... but has merely opposed the application. 4. In our considered opinion, in the absence of any material to doubt the bona fide of the reasons canvassed, the delay ought to be condoned. We hold so. The aforesaid aspect was announced at the time of hearing and accordingly, the rival parties were heard with respect to the merits of the dispute. 5. In order to appreciate the controversy, the appeal for Assessment Year 2009-10 is taken as the lead case. This appeal by the assessee is directed against the order of CIT(A)-10, Mumbai dated 18.08.2017 pertaining to the Assessment Year 2009-10, which in turn has arisen from the order passed by the Assessing Officer dated 30.01.2016 under section 143(3) r.w.s. 147 of the Income Tax Act, 1961 (in short 'the Act'). "1. The learned CIT(A) erred in confirming reassessment made u/s 147 when there was no escapement of income nor was there any tangible, material with AO to reopen the case for this year. 2. a) The Learned CIT(A) erred in confirming addition of Rs. 8,09,810/- under the head income from House Property when it was a case of sub-letting and not house property. b) The Learned CIT(A) erred in confirming the estimate made by the AO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the actual rent received as the annual value of the property for the purposes of Sec. 23 of the Act. As per the Assessing Officer, the fair rent of the property was higher than the stated rental. The Assessing Officer noted that in the same building one M/s. Galaxy Aviation was paying a rent of Rs. 5,50,000/month for a space of 3000 square feet and secondly, Bank of India was paying a rent of Rs. 1,27,449/- per month for an area of 3120 square feet. The Assessing Officer has also referred to a publication of ICICI Property Services (a Division of ICICI Home Finance Co. Ltd.), wherein the rentals prevailing in the vicinity of assessee's building was around Rs. 150/- to 300/- per square feet. Considering all these, the Assessing Officer adopted the fair rent of Rs. 150/- per square feet for assessee's property in Assessment Year 2012-13 and, after making a backward calculation @ 8% for the assessment year under consideration, he arrived at the fair rent of Rs. 118/- per square feet for the Assessment Year 2009-10. On this basis, he determined the fair rent of Rs. 96,406/- per month as against Rs. 7,500/- declared by the assessee and in this manner, the annual value of the property w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... k was paying Rs. 40/- per square feet. That too, is canvassed to be incomparable in the absence of an agreement showing the specific terms and conditions vis-a-vis the rental arrangement entered by the assessee with its sister concern. Furthermore, it has been pointed out that in the following decisions - (i) Anudeep Enterprises Pvt. Ltd., ITA No. 1215/Mum/2012 dated 03.03.2017; and, (ii) Laxmi Satyapal Jain, ITA Nos. 4726 & 4831/Mum/2014 dated 04.02.2016, it has been held that where the actual rent disclosed is in excess of the Municipal ratable value, the annual value of the property can be assessed on the basis of the actual rent. In this context, reliance has also been placed on the judgment of Hon'ble Bombay High Court in the case of CIT vs. Tip Top Typography, 368 ITR 330 (Bom.) to point out that the Municipal ratable value is to be accepted as a good indicator of the fair rent unless the Assessing Officer is able to establish on the basis of material that the actual rent charged was suspicious. According to the learned representative there is no such case made out by the Assessing Officer and, therefore, the determination of annual value of the property be restricted to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... indicate that the parties have concealed the real position". It has been further explained that there must be "definite and positive material to indicate that the parties have suppressed the prevailing rate". If we were to examine the case made out by the Assessing Officer in the instant in the background of the above reasoning laid down by the Hon'ble Bombay High Court, it is found that there is no allegation, much less any positive material with the Assessing Officer, to say that the assessee has suppressed the real position by declaring rent from the sister concern @ Rs. 7,500/- per month. On the contrary, what we find is that without arriving at such satisfaction, the Assessing Officer has proceeded to ascertain the going rate of the rentals in the vicinity of assessee's property. The said approach, in our view, is contrary to the judgment of the Hon'ble Bombay High Court in the case of Tip Top Typography (supra), wherein the following discussion would indicate that ascertaining of the going rate in the market is not the basis to reject the actual rent declared, but rather there has to be a definite and positive material to indicate that the parties have suppressed the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g Officer has straightaway based his estimation on the rates found on his inquiry without establishing the similarity of the arrangement. As pointed out by the learned representative with regard to the rental arrangement of Galaxy Aviation, the same is incomparable with assessee's arrangement because of the timing difference. The arrangement of Galaxy Aviation is of the year 2012 whereas assessee's arrangement is of 2007. Even with regard to the rental arrangement of Bank of India, there are no details brought out by the Assessing Officer to show as to how the same are comparable to the assessee's arrangement. Therefore, on this ground also, the estimation made by the Assessing Officer cannot be straightaway accepted. 13. Therefore, considering the entirety of facts and circumstances of the case, we do not find any justification for the action of the Assessing Officer in disregarding the actual rent declared by the assessee for the purpose of arriving at the annual value of the property to be taxed u/s 22 of the Act. As a consequence, we set-aside the order of CIT(A) and restore the matter back to the file of the Assessing Officer who shall recompute the income assessable under th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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