TMI Blog2008 (7) TMI 1064X X X X Extracts X X X X X X X X Extracts X X X X ..... , some facts may have relevance which can be summarised as under: 3. The Assessee is a Private Ltd. Company. It is having various properties situated at different places and one of the property which is concerned with the present Reference is known as Shantisadan located at Ahmedabad. As per the Assessee, on the basis of the rental agreement, it had received rental income of ₹ 27,467/- from the property of Shantisadan and the said income was shown in the return by the Assessee. However, in the assessment proceedings, the Assessment Officer based on the gross rental value of the property assessed by Small Causes Court, directed for assessment on the basis of such Annual Letting Value of the property at ₹ 1,57,675/-. 4. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be the basis for arriving at the actual rental income for the purpose of taxation. It was submitted that the income of two other properties of the very Assessee, the assessment based on the Annual Letting Value fixed by the Small Causes Court, is accepted and therefore, it was submitted that the same could be the valid criteria for assessment. He submitted that the Assessing Officer as well as the C.I.T. (Appeals), rightly adopted the criteria, but the Tribunal has reversed. It was the contention that the approach of the Tribunal was erroneous. 8. Whereas, on behalf of the Assessee, Mr. Karia, relied upon the decision of the Apex Court in the case of Dewan Daulat Rai Kapoor Vs. New Delhi Municipal Committee Anr. reported at 22 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a hypothetical tenant, unless the rent is inflated or depressed by reason of extraneous considerations such as relation, expectation of some other benefit, etc. There would ordinarily be in a free market close approximation between the actual rent received by the landlord and the rent which he might reasonably expect to receive from a hypothetical tenant. But where the rent of the building is subject to rent control legislation, this approximation may and often does get displaced. It is, therefore, necessary to consider the effect of rent control legislation on the determination of annual value. 11.Apart from the above, it is required to consider the effect of the Rent Control Legislation for the purpose of deriving income by the Landl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it may stand on different consideration. In any case, the assessment of a property for municipal taxation purpose by a local authority would stand on altogether different aspects inasmuch as such taxation is in discharge of the obligation upon the local authority as per the relevant legislation. Therefore, while imposing taxation, as per the Municipal laws, the different consideration may prevail. The parity cannot be considered for assessing the income of a landlord and at that stage, the relevant criteria or consideration would be a fetter or restriction provided by the Rent Control Legislation upon the landlord to receive the rental income of the property. 13. As in the present case, there is no fixation of standard rent by any compet ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the rent received by the assessee is low because of any extraneous considerations, like relationship between the landlord and the tenant or any other contract. In the absence of such evidence we are not in a position to reject the conclusion arrived at by the Tribunal that the actual rent received by the assessee would form the fair rent, as contemplated under the Rent Control Act. 15.So is in the present case inasmuch as the Tribunal was right in setting aside the assessment based on the Annual Rental Value and was right in directing the assessment based on the actual rental income received by the Assessee on the basis of the rental agreement. Hence, we answer the question in affirmative in favour of Assessee against Revenue. 16. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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