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Issues Involved:
The issue involves determining whether the Appellate Tribunal was correct in directing the Assessing Officer to consider the Annual Letting Value (ALV) based on the rent received by the assessee or the rental agreement, rather than the gross rental value determined by the Small Causes Court. Summary: The case involved a Private Ltd. Company with properties, including Shantisadan in Ahmedabad. The assessee reported rental income of Rs. 27,467 based on the rental agreement, but the Assessment Officer assessed it at Rs. 1,57,675 based on the Small Causes Court's valuation. The Commissioner of Income Tax(Appeals) upheld this decision. The Appellate Tribunal directed the assessment based on the actual rent received, citing the Rent Control Act's provisions. The Revenue argued that the Small Causes Court's ALV should be the basis for taxation, as done for other properties of the assessee. On the other hand, the Assessee relied on legal precedents stating that ALV should align with standard rent under the Rent Control Act. The Madras High Court's decision was referenced to support this argument. The Court emphasized that in the absence of a standard rent determination under the Rent Control Act, the actual rental income should be considered for assessment. The Tribunal's decision to base assessment on actual rental income was upheld, citing the Rent Control Act's provisions and rejecting the Municipality's ALV determination. In conclusion, the Court ruled in favor of the Assessee, directing assessment based on actual rental income rather than the ALV determined by the Small Causes Court.
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