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TMI Blog2016 (11) TMI 724X X X X Extracts X X X X X X X X Extracts X X X X ..... elephone Department and the lease rent that is received is ₹ 4 per sq.ft. This would show that this is a case to which Clause (b) of Section 23(1) is applicable and the annual value has to be estimated, quantifying the sum for which the property might reasonably be expected to let. It is adopting this method that the Assessing Officer has framed the assessment by fixing the annual value at ₹ 4 per sq.ft. which is the rate of rent received for a portion of the building let out by the assessees themselves to the Telephone Department. Assessee's contention that Section 23 (1) cannot be applied to this case for the reason that the coowners themselves are the Directors of the lessee company cannot be accepted for the reason tha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or the assessment year 1996-1997, applying the provisions of Section 23 of the Income Tax Act, the Assessing Officer assessed the annual value of the building at ₹ 4 per sq.ft. on the basis that another portion of the building was let out to the Telephone Department and the rent paid by the Department to the assessees is ₹ 4 per sq.ft. In the appeal filed before the Commissioner Income Tax (Appeals), the order of the Assessing Officer has set aside and this order was confirmed by the Tribunal in the appeals filed by the Revenue. Reasoning of the Commissioner of Income Tax (Appeals) and the Tribunal is that the co-owners of the building themselves are the share holders of the company and that if the corporate veil is lifted, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pplicable to a property which is not let out and in such a case, the such sum, for which the property might be reasonably expected to let, shall be the annual value. On the other hand, a reading of Clause (b) would show that where a property is let and the annual rent received or receivable by the owner is in excess of the reasonably expected sum mentioned in Clause (a), the annual value shall be the amount actually received or receivable by the owner. In other words, as per Clause (b), in a case where the property is let out and if the rent received or receivable is more than the sum for which the property might reasonably be expected to let, the annual value shall be the actual amount that is received or receivable. In other cases, the an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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