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TMI Blog2013 (11) TMI 1481X X X X Extracts X X X X X X X X Extracts X X X X ..... he provision of section 22 of the Act will be determined as per the provisions of section 23(1)(a) of the Act, the sum for which the property might reasonably be expected to let from year to year - Decided against assessee. Rental rate adopted - Held that:- The prevailing rental rate in the locality was around Rs. 60/- per sq. ft. and the rates during the financial year 2007-08 were approximately Rs. 40/- per sq. ft. The AO has not considered the contention of the assessee that the property could not be let out without prior permission of NOIDA authority that too for the agreed purpose of manufacturing color television receiver set of boxes Videocon and that water and electricity connections were not available in the property - The issue ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty. The AO proposed as to why the notional rental income from the above property should not be brought to tax. The assessee took the plea that the property was under illegal occupation. It was also stated that the access to the property was occupied by stamp paper vendors and deed writers etc. On further enquiry by the inspector it was found that although earlier there were some unauthorized occupation on the road by stamp vendors deed writers but now there was no restriction on access to any of the office / industries located on the road. The assessee also pleaded before the AO that since property was situated on an industrial plot which was allotted to the assessee for manufacturing of colour television, receiver sets of boxes Videoc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , transfer , sub letting etc. Ld. AR with the assistance of these clauses submitted that the assessee cannot be said to have "power of absolute enjoyment" of the property in question. In such circumstances assessee cannot be said to be even a beneficial owner and therefore provisions of section 22 are not applicable to the assessee. 5. Without prejudice to the above argument, the Ld. AR submitted further that if at all assessee is treated as a owner then the assessee is covered within the exception provided to section 22 and therefore section 22 is not applicable to it for the said property. He then referred provisions of section 22 of the Act and stated that assessee has occupied property for the purpose of business. He referred page No. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e permission from NOIDA authority is obtained for sub letting the property, the ALV depends upon actual condition of the property viz. its quality of construction, absence of electricity and water connection etc. He submitted that neighboring properties viz. HCL etc. referred by inspector in his report cannot be considered comparable because their construction quality differs from the property of the assessee. Neighboring properties can be an idea but similar properties in the neighboring area are to be considered. He submitted that property encircled by vendors in the vicinity making the access to the property difficult during the year of assessment which should have been also considered. Ld. AR referred page 31 of the paper book i.e. copy ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... iness or profession carried on by him the profits of which are chargeable to income tax, shall be chargeable to income-tax under the head "Income from house property". 9. If we find that the property owned by the assessee falls u/s 22 under the category of "income from house property" then only provision laid down u/s 23 of the Act will come in operation to determine annual value of the said house property. As per the provisions laid down u/s 22 the annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner shall be chargeable to income tax under the head "income from house property". The only exception to section 22 of the Act is " other than such portion of such property as he ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ,53,291/- under the head "investment" in its balance sheet. The only disqualification for the assessee for application of the exception to the provision u/s 22 of the Act remained that the assessee was not carrying out any business, but he was in occupation of the property. The AO has also alleged that the property had been kept vacant by the assessee for long time deliberately though it was a valuable property which was usable. Now the question before us is that in such a situation when the property was occupied by the assessee for the purpose of a business but no business was carried on by him profits of which are chargeable to income tax as to whether such property shall be chargeable to tax under the head "income from house property?" A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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