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TMI Blog2018 (2) TMI 1584X X X X Extracts X X X X X X X X Extracts X X X X ..... thout any basis as well. Since the ratio of commercial rent received in ground floor with that of hotel property in earlier years is not available and since no other comparable rent details were placed on record, we are of the opinion that the matter requires re-examination by the AO, particularly keeping in mind the principles laid down by the Hon'ble Bombay High Court in the case of CIT Vs. Tip Top Typography (2014 (8) TMI 356 - BOMBAY HIGH COURT) relied on by assessee Assessee also offered other incomes, particularly rent on furniture and fixtures. Assessee also claimed service tax and other expenditure. Whether those incomes can be considered as part of house property income or has to be assessed separately either under the head ‘bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s , claiming various expenditures. AO in the scrutiny assessment has noticed that assessee has offered higher rent in the months of April, May and June, 2011, but reduced the rents in the subsequent period. He also noticed that the rent offered by assessee from hotel unit is not comparable with other tenants in the ground and first floor and therefore, he has taken the average value of the rents received from the ground floor and first floor to determine the annual letting value of the hotel unit in second, third and fourth floors at ₹ 100 per sq. ft. Since the hotel was occupying area of 19,761 Sq. Ft., AO adopted the annual letting value for the property at ₹ 2,37,13,200/- for the whole year and thereafter, re-computed the inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ant, I am also in agreement with the Assessing Officer since it was found that the appellant has not done any business activity and was only receiving the rental income and hence all the expenses claimed by the appellant are not allowable. Therefore, the business expenses disallowed by the Assessing Officer were confirmed. With regard to the second addition of taking the fair market value and ALV on comparison basis also, the appellant has failed to substantiate his ground fairly along with evidences and explanation and so, I am in agreement with the AO and the addition made on this ground is confirmed . 5. Ld. Counsel submitted that property was given on lease to one M/s. R. Line Foods on a lease agreement dt. 28-02-2007 for a f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... la) (supra). 8. In response the Ld. Counsel submitted that the AO has arbitrarily fixed the rent without considering that the hotel building cannot be leased out for shops and rents in the ground floor and first floor as received by assessee were already offered and that cannot be the basis for fixing the rent of a hotel building in second, third and fourth floors without considering the advantages/disadvantages. It was submitted that the AO has not followed the prescribed procedure and rent was fixed arbitrarily taking the average lease value of the ground floor. 9. We have considered the rival contentions and perused the documents placed on record and also the case law relied upon. It is admitted that AO has power to re-determine th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of ₹ 100/- per sq. ft., is not only arbitrary but also without any basis as well. Since the ratio of commercial rent received in ground floor with that of hotel property in earlier years is not available and since no other comparable rent details were placed on record, we are of the opinion that the matter requires re-examination by the AO, particularly keeping in mind the principles laid down by the Hon'ble Bombay High Court in the case of CIT Vs. Tip Top Typography (supra) relied on by assessee and also keeping in mind the case law relied on by the DR and the jurisdictional High Court judgment in the case of A. Venkateswara Rao Vs. ACIT [372 ITR 136] (AP). AO is directed to examine all the aspects, and by giving an opportunity t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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