9911796707
TMI Blog2014 (12) TMI 1111X X X X Extracts X X X X X X X X Extracts X X X X ..... even if the building has potential to fetch a higher rent, the Government departments are not expected to pay such rent - in case the owner of the premises is willing to lease them to the Government or its agencies, for reasons of safety and security or assured payment of rent, the discretion of the AO to determine the reasonable rent of his choice, gets virtually restricted - He cannot ignore the actual payments and fix an imaginary figure, based upon the alleged information or potential of the building - once the penalty proceedings were dropped, the suggested figure virtually loses its significance - the rent for the premises must be taken at ₹ 13,500/-, unless there was any enhancement by the lessee itself, for any subsequent per ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... as under: Smt. A.V.Narsamma was the owner of an item of immovable property, bearing No.10-1-32A, Waltair Uplands, Visakhapatnam. The building was given on lease to the Telecom Department, and Narsamma was an assessee under the Income Tax Act, 1961 (for short the Act). She was showing the income from house property, in her returns, year after year. She passed away on 16.09.1994. Her legal representative i.e. the appellant herein, filed returns for the period between 01.04.1994 and 16.09.1994 and paid the income tax, on the income from house property. The owner of the house i.e. Narsamma, executed a registered Will, bequeathing the property in favour of a Trust. The same was acted upon and the Trust received the rents, and paid income t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unal did not address this vital issue on technical grounds. Sri S.R.Ashok, learned Senior Counsel for the respondent, on the other hand, submits that the Assessing Officer entertained a serious doubt as to the accuracy of the rent on which the tax is paid, and by following the prescribed procedure, he levied tax on the enhanced amount. He submits that the Commissioner has taken a reasonable and practical view of the matter and the same was upheld by the Tribunal. As regards the alleged double levy, learned counsel submits that the question was not raised before the Commissioner, and obviously for that reason, the Tribunal refused to deal with it. Two aspects arise for consideration. The first is about the quantum of rent; and the seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity or assured payment of rent, the discretion of the Assessing Officer to determine the reasonable rent of his choice, gets virtually restricted. He cannot ignore the actual payments and fix an imaginary figure, based upon the alleged information or potential of the building. Things would have been different altogether, had it been a case where the appellant is alleged to have suppressed the correct information, and furnished accurate figures. This is a rare case, in which the proceedings under Section 271C of the Act were initiated, and on close verification of the matter, they were dropped. The figure ₹ 2.83 p., per Square Foot, mentioned in the order of the Commissioner was found to be imaginary. The figure was derived by divid ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ficer, on that limited aspect. We accordingly allow the appeal and set aside the order passed by the Assessing Officer, as modified by the Commissioner and affirmed by the Tribunal. The matter is remanded to the Assessing Officer for the limited purpose of verifying the Will Deed and the factum of the bequest of the property on the Trust. If it emerges that the Trust became the legatee and started enjoying the rights of ownership from 17.09.1994 onwards, there shall not be levy of any tax upon the appellant for that period. Even for the period from 01.04.1994 to 16.09.1994, the rent shall be taken as ₹ 13,500/-, per month. There shall be no order as to costs. The miscellaneous petitions filed in this appeal shall also stand disp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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