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TMI Blog1998 (7) TMI 11X X X X Extracts X X X X X X X X Extracts X X X X ..... s have fixed the annual value at a higher figure than the actual rent ? and 2. Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in holding that the entire corporation tax of Rs. 66,770 should be deducted from the annual value though it is relatable to the earlier years for the purpose of computing the income from property?" They arise out of the assessment of the respondent in respect of the income received by him under the heading "Income from house property" for the assessment year 1977-78 ; the property is situate in the city of Chennai and it is submitted by counsel appearing for the Revenue that the property is one which is subject to the provisions of the Tamil Nadu Buildings (Lease and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e question similar to the second question has already been considered and decided by this court. It is fairly submitted by learned counsel appearing for the Revenue that the assessee, having regard to the law laid down by this court in CIT v. L. Kuppuswamy Chettiar [1981] 132 ITR 416 is entitled to the deduction for the amounts paid pursuant to the demand made for property tax in that year, though the amount demanded and paid related to earlier years. The second question is, therefore, answered in favour of the assessee and against the Revenue. With regard to the first question, counsel relied on the decision of the Supreme Court in Mrs. Sheila Kaushish v. CIT [1981] 131 ITR 435, wherein the court answered the question as to whether the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... provisions of the Delhi Rent Control Act, and not the actual rent received by the landlord from the tenant. We may notice here that the judgment of the Supreme Court in Sheila Kaushish's case [1981] 131 ITR 435, was rendered in a case which related to an assessment year during which section 23(1)(b) of the Income-tax Act was not in the statute book. It is also necessary to notice that the Supreme Court did not consider the case of an assessee and the buildings owned by him in areas where the Rent Control Act is not in force. The decision was rendered in respect of rental income of a building in the city of Delhi, where the Rent Control Act was in force under which the standard rent was determinable. The law laid down in that case cannot ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... menities available, the prevailing market rate or rental, the amount of the advance or deposit, etc. Normally, the actual rent received corresponds to the rent which a person can reasonably be expected to receive, as the tenant and the landlord can be presumed to act rationally, the landlord seeking the maximum possible rental, while the tenant would seek to pay the minimum possible, the actual rent paid being the amount accepted by both landlord and tenant as reasonable under the given circumstances. It is only in the case of buildings situate in places where there is a prohibition against the charging of rent in excess of the standard rent--the standard rent determined in accordance with the relevant provisions of the Rent Control Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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