TMI Blog2021 (3) TMI 719X X X X Extracts X X X X X X X X Extracts X X X X ..... income shown by the assessee is not in the parity of the reasonable expected sum for letting out of the property in terms of section 23 (1) - AO can proceed to determine the annual letting value. The Annual letting value of the property is the sum which is reasonably expected to be fetched by letting out for the property from year to year basis. Thus, the reasonable and proper criteria for determining the annual letting value is the fair market rental for which the property can be reasonably let out from year to year. AO has though adopted the rate of rent as it was agreed upon between the parties in respect of property in the vicinity however, the assessee did not give the opportunity to the assessee to present its case against such ado ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncorrect and bad both on the facts and in law. 2-That in any view of the matter the addition of ₹ 75,395/-as enhanced/made by the assessing officer under the head rental income as per para 7 of the assessment order and his action as confirmed by the Commissioner of Income Tax (Appeal) is totally incorrect and unwarranted in the facts and circumstances of the case. 3-That in any view of the matter the addition of ₹ 75,395/- on count of rental income as made and maintained by the two lower authorities is incorrect specially when the said rental income paid to the appellant by M/s Kesarwani Hospital research institute Pvt. Ltd has been accepted in their case vide the order dated 25.03.2014 passed u/s 143(3) of the IT A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income and accordingly, he proceeded to determine the fair market rental value. The Assessing Officer took a comparable instance of a property situated at Lowther Road, Dharbhanga coastal at a distance of 100 yard from the property which is let out to Debt Recovery Tribunal (DRT) for a rent @ 8.78 per sq.ft. The Assessing Officer applied the said rate of rent in the case of the assessee and determined the Annual Letting Value (ALV) of the property in question at ₹ 15,74,184/-. After allowing the deduction u/s 24 (1), the income from house property was computed at ₹ 10,26,029/- the 1/13th share of the assessee comes to ₹ 81,695/- as against ₹ 6,300/- shown by the assessee. Accordingly, difference of ₹ 75,395/- w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er building without considering the other factors influencing the rate of rent being the area the timing of the agreement for letting out of the property as well as the difference of the location of two properties. The Ld. AR has submitted that the Assessing Officer has made an addition without determining the fair market rental value of the property in question in terms of the provisions of section 23 (1) of the Income Tax Act. The decision of the Assessing Officer is arbitrary and justified. He has pleaded that the addition made by the Assessing Officer may be deleted. 5. On the other hand, the Ld. DR has submitted that the property has been given to the related party being the company in which the owners of the property are directors ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or (c) ............................... The ALV of any building is based on what rent it might get not the rent received. The building in question is situated on Lowther Road in Darbhanga Castel area and is having area of 1600sq. yard. The comparable building which is also situated in the Darbhanga Castel area on Panna Lal Road at a distance of 100 yards inside the road and is occupied by Debt Recovery Tribunal (DRT). The DRT is paying rent @ ₹ 8.78/- per sq. ft. Considering all aspect of the case the fair rent of the building in question occupied by Kesarwani Hospital Research Institute P. Ltd is computed at th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3. Income from other source ₹ 12,76,439/- 4. Gross Total income ₹ 24,22,580/- 5. Deduction under section 80C ₹ 1,00,000/-- Total Income - ₹ 23,22,580/- Assessed accordingly at the total income of ₹ 23,22,560/-. Charge interest u/s 234D. Notice of demand and challan are being issued. 7. Though, the Assessing Officer has taken the ALV as the rate of rent in respect of a building situated in the area, however, the Assessing Officer has not given the assessee a fair opportunity to raise the objection against adopting the said rat ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
