9911796707
TMI Blog2019 (2) TMI 2086X X X X Extracts X X X X X X X X Extracts X X X X ..... o as "the Act") dated 07/01/2016 relevant to Assessment Year (AY) 2013-14. 2. The assessee has raised following grounds of appeal:- 1. The Lde.CIT Appeals 8 Ahmedabad has erred in law and on facts in passing appellate order dated 12/01/2017 for A.Y. 2013-14 in the case of appellant by confirming disallowance made by the A.O. 2. The Ld. CIT Appeals erred in law and on facts in confirming addition of Rs.28,02,800/- on account of fair rental income. 3. The only issue raised by the assessee is that ld. CIT (A) erred in confirming the addition in part made by the AO amounting to Rs.28,02,800.00 on account of fair rental income. 4. The facts of the case are that the assessee in the present case is a Private Ltd Company and engaged in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt agreement made between the assessee and the tenants as the tenants were the related parties to the assessee. ii. The bank of Baroda has vacated the premises in the previous year 2010-11. After that such was utilized by it during the previous year under consideration. iii. The prevailing fair market rate is not more than Rs. 29/- to 30/- per square feet. iv. The different portions of the building have a different area in size which was given on rent to the related parties. Therefore, the amount of rent received from the parties cannot be compared with each other. v. The building was commercial property which was rented out to the associated parties as a measure of commercial expediency. vi. The AO did not verify the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore us also submitted that there was no car parking facility available in the building. This fact needs to be considered while determining the fair market rent of the building in the event of not treating the actual rent as fair market rent. The learned AR also submitted that the assessee and its associates are paying the taxes at the maximum marginal rate. Therefore there is no loss to the Revenue. Accordingly, the entire exercise for determining the fair market rent will become futile as there is no loss to the Revenue. 8.1. The learners AR in support of his claim also placed his reliance on the order of Mumbai Tribunal in the case of Europa Chemicals Private Ltd versus ITO reported in 96 taxman.com 309. 9. On the other hand, the ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e of any property shall be deemed to be- (a) the sum for which the property might reasonably be expected to let from year to year; or (b) where the property or any part of the property is let and the actual rent received or receivable73 by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable :" 10.3. A plain reading of the above provisions reveals that the rent sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 12 as increased by 5% p.a. There is no dispute that the bank vacated the property on 30th June 2010. However, the assessee claimed that the fair rent for the property under consideration is of the same amount received by it from its associated enterprises. 10.6. In our considered view, once the assessee has disputed the fair rent, then the lower authorities are under the obligation to reject the contention of the assessee with cogent reasons. As such the authorities below were under the obligation to determine the fair rent of the property in the manner as discussed above. But the authorities below have not determined the fair rent without considering the procedures prescribed under the law. 10.7. The rent charged by the assessee from the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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