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TMI Blog2011 (11) TMI 797X X X X Extracts X X X X X X X X Extracts X X X X ..... cieties, Cuff Pared, Mumbai. During the previous years relevant to assessment years 1999-2000 to 2002-03, the said property was let out by the assessee to M/s Credit Suisse First Boston (I) Securities Pvt. Ltd. on a monthly rent of ₹ 23,000/-. The assessee had also received a deposit of ₹ 2.24 crores from the said tenant. The rental income received from the said property was offered by the assessee in the returns of income filed for assessment years 1999-2000 to 2002-03 which was initially accepted by the AO u/s 143(1). Thereafter he reopened the assessment for assessment years 1999-2000 to 2002-03 and in the reassessments completed u/s 143(3)/147, the income of the assessee from house property was determined by him by adopting the ALV of the said property at ₹ 4,80,000/- i.e. ₹ 40,000/- per month for assessment years 1999-2000 to 2002-03. The assessments made by the AO u/s 143(3)/147 for assessment years 1999-2000 to 2002-03 were set aside by the learned CIT, Central-IV vide his orders passed u/s 263 on 28-03-2007 with a direction to the AO to determine the ALV of the assessee s property in accordance with the provisions of section 23(1)(a). Meanwhile, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... orders passed by the AO u/s 143(3)/147 for assessment years 1999-2000 to 2002-03 in paragraph No. 2.6 to 2.9 as under : 2.6. I have gone through the facts brought on record by the AO and the contentions of the appellant. It is settled law that property income is assessed on a notional basis with reference to the annual value which is defined as the amount for which the property might reasonably be expected to let from year to year or the rent actually received or receivable whihever Is higher. It is also settled law that the owner of house property is liable to the taxed on the annual value and not the actual income arising there from, whether it has been let out or not. It is in the background of the above settled law that the determination of rental income by the AC is examined below. 2.7 On going through the assessment order, it is seen that the AO has estimated the rental Income to be ₹ 40,000/-. The AC however had available before him, rent fetched by similar flats in the same building together with deposits and, therefore, he should have made a comparison of the rent received with the deposit taken by other parties vis-a-vis the appellant In order to ascerta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the agreements and the rent fetched is higher at ₹ 29,554/-, but the deposit is much less at ₹ 1 crores. In the case of Mrs. Poonam K. Rohira and Gauri Kapoor (at SI. No.3), the year of agreement is the same and the amount of deposit is also almost the same and in this case the rent fetched is ₹ 27,902/-. Vide subsequent agreement dated 21.03.2003 in the case of Mrs. Poonam K. Rohira and Gauri Kapoor (at SI. No. 4), on a smaller deposit of ₹ 2 crores, rent was fixed at ₹ 40,000/-. However, there is a wide gap in the date of agreements in this case. It is therefore the case at Sl.No.3 which is the closest to the appellant s where the deposit taken is ₹ 2.5 crores and rent received is ₹ 27,902/- per month against deposit taken by the appellant of ₹ 2.24 crores and rent of ₹ 23,000/- per month. 2.8 It is pertinent here to make a brief mention of the fact that the applicability of the decision of the Mumbai ITAT in the case of ITO Vs. Chem Mech Pvt. Ltd. supra, (and on the basis of which the AC has determined the annual letting value at ₹ 2.5 lacs per month in A.Yrs. 1997- 98 2003-2004) has been examined in detailed by me ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... valuation. Aggrieved by the orders of the learned CIT(Appeals) for all the five years under consideration, the Revenue has preferred these appeals before the Tribunal. 4. We have heard the arguments of both the sides and also perused the relevant material on record. The learned representatives of both the sides have cited various judicial pronouncements on the issue involved in these appeals in support of their respective stand. It is, however, observed that in the decision recently delivered in the case of CIT vs. Moni Kumar Subba 333 ITR 38 (Del.), the full Bench of Hon ble Delhi High Court has considered and decided a similar issue after taking into consideration all the relevant aspects of the matter including the various judicial pronouncements relevant thereto. As held by the full Bench of the Hon ble Delhi High Court in the case of Moni Kumar Subba (supra), the notional interest on the interest free security deposit cannot be taken as determinative factor to arrive at the fair rent and section 23(1)(a) does not mandate this. It was held that section 23(1)(a) requires determination of the fair rent being the sum for which the property might reasonable be expected to let ..... X X X X Extracts X X X X X X X X Extracts X X X X
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