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Issues involved:
The judgment involves the assessment of annual rateable value of a property for income tax purposes, determination of annual letting value based on municipal law, and consideration of rent received in relation to fair market value. Assessment of Annual Rateable Value: The assessee owned a seven-storeyed building in Calcutta, let out to various individuals, including company directors and their relatives. The Assessing Officer estimated the gross rental income at Rs. 2,73,120 for the relevant assessment years. The Commissioner of Income-tax (Appeals) directed computation of income based on the assessee's submission and allowed statutory deductions. Determination of Annual Letting Value: In the appeal before the Tribunal, it was argued that the annual letting value should be based on what the property could fetch in the open market, considering its location and covered area. The Tribunal, citing relevant court decisions, held that the annual letting value should be determined according to municipal law. The counsel for the assessee contended that even if the property was let out to related parties, the value should be based on actual rent received or as per municipal valuation. The Tribunal upheld the valuation by the Calcutta Municipal Corporation under the Municipal Corporation Act, as it remained unchallenged. Rent Received vs. Fair Rent: The Tribunal justified accepting the annual letting value based on the municipal corporation's valuation, as the assessee was receiving more rent than the valuation amount. Consequently, the Tribunal affirmed the decision regarding question No. 1, while questions No. 2 and No. 3 were deemed unnecessary to answer in light of the first question. The tax reference was thus disposed of accordingly.
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