2015 (7) TMI 1176 - AT - Income Tax

Computation of ALV based on municipal rateable value of the property - Held that - It is a decided issue that AO is prevented in this case and property from disturbing the ALV qua the (i) considering the notional interest on deposit and (ii) not considering the Municipal Ratable value-based-ALV of the property. In this year, AO has not garnered any incriminating material against the assessee‟s claim relating to ALV of the property in question. After considering the above submissions of the assessee as well as the arguments of the Ld DR for the Revenue, who essentially argued for setting aside the appeal to the file of the AO, we find the need for dismissing the arguments of the Ld DR. - Decided in favour of assessee.

Summary

Issues:
1. Whether notional interest on interest-free deposits should be considered for computing the ALV of a property.
2. Whether the ALV should be based on the municipal rateable value of the property.

Analysis:

Issue 1:
The Revenue raised the issue of considering notional interest on interest-free deposits for computing the ALV of a property under section 23 of the Act. The Tribunal referred to previous orders in the assessee's case for AYs 2006-2007 and 2008-2009. The Tribunal had directed the AO to accept the income from house property based on the municipal rateable value. The Tribunal relied on the judgment in the case of CIT vs. Tip Top Typography [2014] 48 taxmann.com 191 (Bombay) to support the assessee's position. The Tribunal dismissed the Revenue's appeal and allowed the assessee's appeal, citing the binding nature of the jurisdictional High Court judgment in the assessee's case.

Issue 2:
The assessee's appeal related to the computation of ALV based on the municipal rateable value of the property. The Tribunal noted that the issue had been previously decided in favor of the assessee in the AY 2006-2007 and 2008-2009. The Tribunal reiterated its decision to accept the municipal rateable value as the ALV of the property, following the judicial pronouncements. The Tribunal dismissed the Revenue's appeal and allowed the assessee's appeal based on the previous judgments and the lack of incriminating material against the assessee's claim.

In conclusion, the Tribunal dismissed the Revenue's appeal and allowed the assessee's appeal, maintaining consistency with previous decisions and the binding nature of the jurisdictional High Court judgment in the assessee's case.