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TMI Blog2011 (10) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... house property on the basis of actual rent received by the assessee, all the questions whether transaction was sham transaction and further whether the assessee had received loans from the Company, to which the property was let out and whether rent had to be fixed on the presumptive amount receivable under Section 23 (1), should have been left open to be considered by the Assessing Officer. The Tribunal wrongly foreclosed the matter in holding against the policy of the statute to the effect that where the actual amount received was not in excess of the sum referred to in clause (a), and clause (b) would apply. - the substantial question framed is decided in favour of the revenue and against the assessee. - 35 of 2002, 40 of 2002, 92 of 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade assessment on a total income of Rs.6,04,970/-. The Assessing Officer made an addition of Rs.6,19,423/- to the assessee's income on account of share in the income from house property relating to the property No. 42, Friends Colony, Community Centre, New Delhi 2. The Assessing Officer noticed that the assessee had earned income from house property No. 42, Friends Colony, Community Centre, New Delhi. The house belonging to the assessee and her sister-in-law Smt. Sneh Vaish. The property was let out to a company M/s. Vaish Brothers Co. Pvt. Ltd. A lease deed was executed on 06.12.1984 and the rate of rent was fixed at Rs.5/- per sq. ft. per month for a period of five years with the provision that a renewal of the lease for a further t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal by its order dated 31.10.2001 decided the assessee's appeal. The Income Tax Appellate Tribunal set aside the order of the Commissioner of Income Tax (Appeals) and directed the Assessing Officer to determine the property income on the basis of actual rent received. 5. The Income Tax Appellate Tribunal in paras 10 and 11 of its order has observed as under:- 10. In view of these provisions, the annual value of the property shall be deemed to be either the sum for which the property might reasonably be expected to be let out or where the property is let out, the actual rent received for receivable by the owner. However, where the actual rent received is the excess of the sum which might be expected to be received then clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the Income Tax Appellate Tribunal is not accepted and is being challenged before the Hon'ble High Court by way of an appeal under Section 260-A of the Income Tax Act 1961 by taking following grounds of appeal. 4. It is submitted by Sri Shambhoo Chopra, learned counsel for the appellant that the appeals arising out of penalty proceedings under Section 271 of the Act are consequential to the appeals arising out of the proceedings of assessment. He submits that it was not denied that the two sisters namely Smt. Pushpa Vaish and Smt. Sneh Vaish were owners of the house property No. 42, Friends Colony, Community Centre, New Delhi. They had let out the property @ Rs.5/- per sq. ft. per month for a period of five years to M/s. Vaish Brother ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es:- Annual value how determined 23 (1) For the purposes of Section 22, the a annual value of any property shall be deemed to be - (a) the sum for which the property might reasonably be expected to let from year to year; or (b) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or (c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owning to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so rec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Tribunal committed error of law in holding that the amounts received by Minicon on account of letting out the premises were liable to be assessed in the hands of the assessee, on the ground that the transaction between the assessee and Minocon was a sham and bogus transaction. 10. Coming to the present case, we find that the facts are entirely different inasmuch as the assessee are two sisters. They let out the property to a private company in which their husbands are Directors. The Company in turn, admitted let out the property on much higher rent. The facts and circumstances in which the property alleged to be modified to such an extent that it would fetch rent three times than the rent they were paying to the owners of the house i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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