TMI Blog1975 (8) TMI 5X X X X Extracts X X X X X X X X Extracts X X X X ..... ne house property being premises No. 9/1, Gariahat Road, P. S. Ballygunge, District 24-Parganas. It is this property which has led to the controversy in this proceeding. For the assessment years 1964-65 and 1965-66, the total income of the petitioner was assessed at Rs. 30,085 and Rs. 35,334, respectively. Out of the aforesaid total income the house property income was computed at Rs. 11,854 and Rs. 11,969, respectively. The aforesaid premises being premises No. 9/1, Gariahat Road, referred to hereinbefore, was under the occupation of the Government of India, since 16th of October, 1963, on a monthly rental of Rs. 400. The same was subsequently increased to Rs. 484. It is stated in the petition that the petitioner had requested for enhancement of the rent. The Government, however, refused to enhance the rent on the ground that Rs. 484 was the amount which was fixed as the standard rent as per provisions of the West Bengal Rent Control Act. In the premises according to the Government, the petitioner was not entitled to any enhanced rent. The petitioner, thereafter, served a notice dated 25th August, 1962, on the Government of India for vacating the premises on the ground that the pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... produced before me, the Income-tax Officer has stated as follows : " I have reasons to believe that by reason of omission or failure on the part of the assessee, to disclose fully or truly the material facts necessary for the original assessment, the income from house property situated at No. 9/1, Gariahat Road, Calcutta, amounting to Rs. 41,966 has escaped assessment. " Therefore, action was proposed under clause (a) of section 147 of the Income-tax Act, 1961. The reasons for the three years were identical. As mentioned hereinbefore, the petitioner challenges the said notices under section 148 of the Income-tax Act, 1961, for the aforesaid assessment year. The main ground of challenge of the petitioner is that at the relevant time when the petitioner made the return for the three assessment years the amount of compensation had not been determined. Therefore, it was urged that the petitioner could not be made liable for non-disclosure or failure of anything which happened subsequently and in respect of which the petitioner was not aware at the time of the filing of the return. It is not in dispute that the returns for the three relevant assessment years were filed prior to 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for the assessment year 1966-67 and as such he had included the same for the said assessment year as income from house property. He has further stated that it was noticed by him that the previous assessments for the assessment years 1963-64 to 1965-66 were completed taking the rent at the rate of Rs. 484 per month instead of Rs. 2,128 per month. Therefore, he had duly initiated proceedings under section 147(a) of the Income-tax Act, 1961. Dealing with the allegations made in paragraph 11-A of the petition as mentioned hereinbefore the said deponent had stated that separate notices dated 6th January, 1970, were duly issued fixing the case on 20th January, 1970, for both the assessment years in question. But according to the deponent on an application for adjournment made by the assessee the cases were fixed for hearing on February 18, 1970. Hearing for the assessment year 1966-67 was adjourned till 24th of February, 1970, with the request to the assessee to file a copy of the requisition deed. On the 24th February, 1970, according to the deponent, the case for the assessment year 1965-66 was heard and the assessment order was passed on that date accepting the rental income at Rs. 48 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the receipt if it was otherwise taxable. He drew my attention to the decision of the Supreme Court in the case of Commissioner of Income-tax v. A. Gajapathy Naidu [1964] 53 ITR 114. Reliance was also placed on the decision of the Andhra Pradesh High Court in the case of Khan Bahadur Ahmed Alladin Sons v. Commissioner of Income-tax [1969] 74 ITR 651, where the Division Bench of the Andhra Pradesh High Court held that when the land was taken over by the Government under the Land Acquisition Act, the right of the owner to compensation was an inchoate right till the compensation was actually determined and had become payable. But once it became payable, the determination of the question whether it was actually received or deemed to have been received might depend upon the method of accounting adopted by the assessee. But before the right to receive a particular amount as income accrued, no charge could be levied under the Income-tax Act on that amount in any year anterior to the one in which it was receivable. It was held that the enhanced compensation accrued to the assessee only when the court accepted the claim and not when the land was taken over by the Government. The Divisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value. In the case of Corporation of Calcutta v. Smt. Padma Debi, AIR 1962 SC 151, the Supreme Court had to consider the gross annual rent at which the building might reasonably be expected to let under the provision of the Calcutta Municipal Act, 1923. The Supreme Court observed that the word " reasonably " in clause (a) of section 127 of the said Act was not capable of precise definition. It was a question of fact but on a combined reading of the provisions of the Act and the Rent Control Act left no room for doubt that a contract for a rent at a rate higher than the standard rent was not only not enforceable but also the landlord would be committing an offence if he collected a rent above the standard rent. Therefore, in this case if anything in excess of Rs. 484 was being realised by the assessee as the rent the same would not be the reasonable letting value of the property and should not be computed as income from house property as such. More or less the same view was reiterated by the Supreme Court in the case of Guntur Municipal Council v. Guntur Town Rate Payers' Association, AIR 1971 SC 353. As mentioned hereinabove in the relevant assessment year there was a statutory re ..... 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