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TMI Blog2021 (11) TMI 770X X X X Extracts X X X X X X X X Extracts X X X X ..... al value of the property and any deviation from the same is to be based on evidence showing that it is wrong. We find the entire exercise of the Revenue Authorities in the present case for determining the annual ALV of the property as being arbitrary. No reason has been given for adopting the fair rent determined by the valuer as against the municipal valuation or of the standard rent of the property, which has not even been determined in the present case. Adoption of the fair rent as determined by a govt. approved valuer as the annual rental value of the property owned by the assessee is not justified and the same is, therefore, rejected. The income so determined by the Revenue Authorities of ₹ 14,87,600/- is set aside and that returned by the assessee is restored . - ITA No.53/Chd/2020 - - - Dated:- 12-10-2021 - Shri Satbeer Singh Godara, Judicial Member And Smt.Annapurna Gupta, Accountant Member For the Assessee : Shri Parikshit Aggarwal, CA For the Revenue : Smt.Meenakshi Vohra, Addl. CIT ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER: The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Inco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... I have considered the contention of the appellant and the facts mentioned in the assessment order. The relevant provisions of s.23(1) and s.23(4)(b) of the Act are reproduced below: Section 23 (4)- Where the property referred to in sub-section (2} consists of more than one house- (a) the provisions of that sub-section shaft apply only in respect of one of such houses, which the assesses may, at his option, specify in this behalf; (b) the annual value of the house or houses, other than the house in respect of which the assessee has exercised an option under clause (a), shall be determined under subsection (1) as if such house or houses had been let. (c) Section 23(1)- 23. (1) For the purposes of section 22, the annual value of any property shall be deemed to be- (a) the sum for which the property might reasonably be expected to let from year to year: or 27.2.1 Thus, aforesaid provisions show how the annual let out value (ALV) is to be determined i.e. the sum for which value of any property might reasonably be expected to let from year to year For determining the ALV u/s 23(1)(a), the AO has Jo determine the fair/reasonable rent expected t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ient material on record for taking different valuation, the AO can determine the fair rent by inflating or deflecting the Municipal Value or Standard Rent. In the present case, the AO has estimated ALV of the let out part of the said House @ ₹ 3,00,000/- p.m. totaling to ₹ 36,00,000/- p.a. Applicant has failed to controvert the estimation made by the AO with any specific evidence or explanation of any example from the same sector i.e. sector-4, Chandigarh. Without repeating the discussion made in the preceding paragraphs, it is held that the AO'S determination of the ALV of the let out house is fair and does not require any interference. However, AO has to add amount of 10% p.a. increase in Annual Rental Value and reduce the rental income already offered in the return of income. He is also directed to allow the Statutory Deduction allowable u/s 24 of the Act, However, as no documentary evidences in support of the various expenses claimed against the income have been provided by the assessee before the assessing officer or during appellate proceedings, the same are rightly disallowed by the AO. Hence, the Grounds of Appeal Nos.2 to 5 are dismissed. 5. Aggrieved ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... aluer for determining the fair market value, the Ld.Counsel for the assessee reiterated his contentions made before the Revenue Authorities below to the effect that there was no provision under law allowing the AO to refer the valuation of the Annual Letting Value of the property to a valuer nor could the fair rent be determined based on report of a valuer. He also contended that the assessee had submitted instances of comparable rent and no reason had been given for rejecting the same. 7. The Ld. DR, on the other hand, relied upon the order of the Ld.CIT(A). 8. We have heard both the parties. and have also gone through the order of the Ld.CIT(A). 9. The issue for adjudication before us relates to the determination of income from house property, which is governed by the provisions of chapter IV-C of the Act. As per the charging section 22, the annual value of the property is charged to tax, which annual value has been defined u/s 23 of the Act. The remaining sections deal with deductions from the annual value and provisions relating to arrears of rent etc. Since the issue before us is confined to the determination of the annual value, section 23 is the relevant provision t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... received of ₹ 6,50,000/- and deducted expenses therefrom disclosing income of ₹ 4,09,830/-,while the Revenue has determined the fair market rent relating to assesses share of property at ₹ 14,87,604/- based on valuation report of a govt. approved valuer. The Revenue while doing so has simply accepted the Valuation Report as sacrosanct for the purpose of determining the fair rental value of the property without undertaking any exercise for determining its municipal value or standard rent, when as per the Ld.CIT(A) himself and as per law interpreted by courts in this regard, these are the guiding factors for determining the annual rental value of the property and any deviation from the same is to be based on evidence showing that it is wrong. We find the entire exercise of the Revenue Authorities in the present case for determining the annual ALV of the property as being arbitrary. No reason has been given for adopting the fair rent determined by the valuer as against the municipal valuation or of the standard rent of the property, which has not even been determined in the present case. 14. In our view, therefore, the adoption of the fair rent as determined by a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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