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TMI Blog2016 (2) TMI 34X X X X Extracts X X X X X X X X Extracts X X X X ..... made by Ld A.R that the actual rent received by the assessee should be taken as annual value u/s 23(c) of the Act. Accordingly, we set aside the order of Ld CIT(A) on this issue and direct the AO to adopt the actual rent received by the assessee as annual value for the year under consideration. - Decided in favour of assessee Clubbing of income - Rent received by the assessee whereas service charges received by wife and daughter of the assessee in relation to same property - Held that:- Considering the assessee's submissions that the two ladies cited have only received the payments, from which TDS was deducted by M/s Talwalkar. Further, it is not the case of the AO that the wife of the assessee and daughter-in-law did not provide any ser ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lating to the first issue are that the assessee had declared a loss of ₹ 18,817/- under the head Income from house property in respect of a flat located at RH-15, Madhuban CHS, Denor, Chembur, Mumbai. In the preceding year, the assessee had declared rental income of ₹ 25,000/- per month, whereas during the year under consideration, the assessee declared rental income of ₹ 1,503/- only. The assessee submitted that the property remained vacant for almost entire year. The AO did not agree with the contentions of the assessee and accordingly determined the annual value of property at ₹ 3,00,000/- and, after allowing deduction of 30% towards repair u/s 24, assessed an amount of ₹ 2,10,000/- under the head income fro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... value u/s 23(c) of the Act. 6. The Ld D.R submitted that the issue relating to municipal rateable value requires verification at the end of the AO. 7. Having heard rival contentions, we notice that the annual value of the property cited above is required to be determined u/s 23(c) of the Act, since the property was let out in the preceding year as well as for a part of the year. It is seen that the actual rent received by the assessee for the year under consideration is less than the municipal rateable value as shown by the Ld A.R. In the case laws relied upon by the assessee, it has been held that the municipal rateable value should be adopted as the fair rental value u/s 23(a) of the Act. Accordingly, we agree with the submissions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... licence agreement with the above said company for renting out the premises. The said agreement stated that a separate agreement in respect of services and also for car parking may be entered later. However, the agreement for services was entered by the above said company with the assessee s wife and daughter-in-law. Accordingly, the Ld A.R submitted that the assessee has not provided any service to M/s Talwalkar and it is the ladies, who have provided the prescribed services in their personal capacity by virtue of the agreement entered by them. The ld. AR further submitted that both the persons have received payment directly from the company and TDS was also deducted there from. Accordingly he submitted that the AO was not right in presumin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee with the above said company included the issue relating to provision of services. If that be the case, then the responsibility to provide services would have been taken up by the assessee and hence the issue relating to diversion of income or not would have arisen. This is not the position in the instant case. Under commercial transactions, the agreements are generally entered according to the convenience of parties. Hence, one cannot compel M/s Talwalkar to enter into the agreement with the assessee alone and not with anyone else. 12. We have earlier noticed that M/s Talwalkar Better Value Fitness Pvt. Ltd has entered into separate agreements with the assessee s wife and daughter-in-law for provision of prescribed Services ..... X X X X Extracts X X X X X X X X Extracts X X X X
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