9911796707
TMI Blog1985 (4) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... Rs. 1,000 per month. This rent was to be maintained subject to the condition that the lessee deposited with the assessee an amount of Rs. 2 lakhs for a period of three years on which interest was payable only at 4 per cent per annum up to 31-3-1981 and thereafter at 6 per cent per annum. The repair expenses of above Rs. 5,000 were to be borne by the lessor and below Rs. 5,000 by the lessee. The lease could be extended before three months of its expiry. Taxes were to be borne by the lessor. The assessee in a letter dated 10-8-1981 addressed to the ITO has conceded that the fair market rent of the portion leased out may be Rs. 2,000 but it was let out on condition of the lessee making a deposit at a nominal rate of interest and that the rent ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccording to him, there was no justification for examining the reasonableness or otherwise of the rent received with reference to extraneous factors. 4. On behalf of the assessee, it was submitted by the learned counsel that there was valid consideration for the reduction in the rent which was actually charged. The assessee stood to benefit by receiving deposits at a low rate of interest and the interest obtained by lending out such amounts was duly shown by the assessee. Therefore, it was pleaded that the annual letting value of the property could be computed with reference to the rent actually received. 5. We have set out the rival submissions. In our view, the decision of the Supreme Court in the case of Mrs. Sheila Kaushish v. CIT [1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cted to be let out from year to year the amount so received or receivable could be deemed to be the annual value of the property. The learned counsel sought to rely on the Explanation to section 23(1), which reads as under : " Explanation : For the purposes of this sub-section, 'annual rent' means-- (a) in a case where the property is let throughout the previous year, the actual rent received or receivable by the owner in, respect of such year ; and (b) in any other case, the amount which bears the same proportion to the amount of the actual rent received or receivable by the owner for the period for which the property is let, as the period of twelve months bears to such period. " The expression 'annual rent' occurs only in section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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