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TMI Blog2020 (9) TMI 181X X X X Extracts X X X X X X X X Extracts X X X X ..... eating notional rent based on earlier year as ALV. c The appellant submits that looking to the facts and circumstance of the case and in law, the Ld. CIT(A) has failed to consider mandate given by the Hon'ble Jurisdictional High Court in Tip Top Typography 368 ITR 330(Bom) that for purpose of determining ALV to undertake and apply known method of working out the Annual Value. d In view of the above, the addition made be dropped and Municipal value of property or actual rent received, whichever is higher should be considered as ALV u/s 23(1 )(a) of Income Tax Act, 1961 3. Briefly stated, the facts of the case are that the assessee filed the revised return of income for the assessment year (AY) 2014-15 on 29.11.2014 declaring total income of Rs. 1,69,31,250/-. She had shown income from salary at Rs. 22,19,208/- ; income from house property at Rs. 21,42,000/-;income from other sources at Rs. 1,26,93,213; short term capital gains on sale of shares at Rs. 29,004/-. During the course of assessment proceedings, the Assessing Officer (AO) noticed that there is large decrease in annual lettable value, though there was no corresponding sale of the property. In response to a query r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a more accurate and satisfactory measure of the amount for which the property might reasonably be expected to let out from year to year and accordingly must be assessed to tax on the basis of actual rent received. Referring to the decision in CIT v. Satya & Co. Ltd. (1994) 75 Taxman 193 (Cal), it was contended by the assessee that the Revenue was bound to fix the ALV on the basis of Municipal Valuation, unless the same was lower than the actual rent received. The assessee also referred before the AO the decision in the case of M/s Sheila Kaushish v. CIT (1981) 131 ITR 435 (SC) and CIT v. Poddar Bros (P.) Ltd. (1999) 240 ITR 925, 926, 927 (Cal). Thus the assessee submitted that the income from house property has been correctly calculated on the basis of annual ratable value as determined by the Municipal Authority and the actual rent being higher should be adopted for determining the income from house property. However, the AO was not convinced with the above explanation of the appellant for the reason that the assessee had actually rented the property to the same company in the preceding year for a rent of Rs. 5,36,250/- per month and on change of management the rent was drastic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the assessee's share of 50% of the property known as Leslico House rented to Joseph Leslie Dynamics Mfg. Pvt. is Rs. 31,17,500/- and adopted it accordingly for determining the income from house property for the year under consideration. 4. Aggrieved by the order of the AO, the assessee filed an appeal before the Ld. CIT(A). We find that vide order dated 28.09.2018, the Ld. CIT(A) dismissed the appeal filed by the assessee on the reason that (i) the same property was given on rent to the same company with slight change from 01.01.2010 onwards for a monthly rent of Rs. 2,68,125/-, (ii) the leave and license agreement dated 01.01.2010 for a period of 36 months i.e. from 01.01.2010 to 31.12.2013 and subsequent leave and license agreement dated 01.01.2014 for a further period of 36 months i.e. from 01.04.2013 to 31.03.2016 are exactly same, (iii) the second agreement dated 01.01.2014 is word-for-word replica of the earlier agreement dated 01.01.2010, (iv) each term and condition of rights and responsibilities of licensor and licensee are exactly similar without even an iota of difference. Having made an examination of the two agreements, the Ld. CIT(A) observed that the same propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lue. Submitting a copy of affidavit filed by the assessee on the above, the Ld. counsel submits that the said document could not be produced before the lower authorities, since it is between third parties who are complete strangers to the assessee and hence it took some time for the assessee to trace the parties who have entered into similar transactions in the same areas of the assessee. Thus it is stated that the application be allowed and the additional evidence be admitted. 6. On the other hand, the Ld. Departmental Representative (DR) submits that the application filed by the assessee for admission of the additional evidence be dismissed on the ground that the leave and license agreement dated 01.01.2010 for a period of 36 months i.e. from 01.01.2010 to 31.12.2013 and subsequent leave and license agreement dated 01.01.2014 for a further period of 36 months i.e. from 01.04.2013 to 31.03.2016 are exactly the same. Further, it is stated by him that in the present case, because of the facts and circumstances of the case, change of management of licensee company is not relevant. Further stating that the transaction is between related parties, the Ld. counsel explains that the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e special advantages or benefits. In the instant case, as mentioned earlier, the leave and license agreement dated 01.01.2010 for a period of 36 months i.e. from 01.01.2010 to 31.12.2013 and subsequent leave and license agreement dated 01.01.2014 for a further period of 36 months i.e. from 01.04.2013 to 31.03.2016 are exactly the same. In the instant case, as stated by the AO at para 4.2 of his order dated 08.10.2016, as per the website of MCA the assessee was a major shareholder and Director in the company to whom property has been rented i.e. Joseph Leslie Dynamiks Mfg. Ltd. We are of the considered view that the above principles in Tip Top Typography (supra) are applicable to this case. Considering the facts and circumstances of this case, we admit the additional evidence filed by the assessee. Accordingly, we set aside the order of the Ld. CIT(A) and restore the matter to the file of the AO to make an order afresh by examining the "Leave and License Agreement dated 7.7.2012 between Shri Ganesh Vishwas and one Joshi and Sameer Thakoor" after following the principles laid down in Tip Top Typography (supra) narrated hereinbefore. We direct the assessee to file the relevant doc ..... X X X X Extracts X X X X X X X X Extracts X X X X
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