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Issues involved: Determination of annual value of second self-occupied property u/s 23(1)(a) for taxation purposes.
Summary: The appeal was filed against the CIT(A)'s order for the assessment year 2005-06, specifically disputing the annual value of a second self-occupied property. The assessee owned properties in Ahmedabad and Mumbai, both self-occupied. The AO estimated the annual value of the second property as if it were let out, resulting in a determined house property income. The CIT(A) upheld this decision, leading to the appeal before the Tribunal. The assessee argued that the annual value should be based on the Municipal Rateable Value (MRV) and that the property fell under the Rent Control Act, limiting the Annual Letting Value (ALV) to the standard rent set by the Act. The revenue authorities supported the previous decisions. Upon review, it was found that the ALV of the second property needed to be determined as if it were let out, in accordance with section 23(1)(a) and 23(4)(b). However, the claim that the property was covered by the Rent Control Act, which would restrict the ALV, was not adequately addressed by the lower authorities. Therefore, the Tribunal set aside the CIT(A)'s order and remanded the matter to the AO for a fresh decision after considering the Rent Control Act provisions and providing the assessee with a hearing opportunity. Ultimately, the appeal of the assessee was allowed for statistical purposes, with the order pronounced on 29.2.2012.
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