Law:

Section:

Section 23 of the Income-tax Act, 1961 - Income from house property - Annual value - Assessment years - 1991-92 and 1993-94 - Whether Assessing Officer should adopt gross rent received by assessee, being lessor, from let-out property for purpose of computing income from house property in place of much higher rent fetched by lessee by sub-letting same property - Held, yes - Whether notional interest on interest-free loan received by lessor/assessee from lessee would neither be a determining factor nor a component to be taken into consideration for determining annual value for assessing income from house property in terms of section 23(1) - Held, yes FACTS The assessee leased out its house property to a company and received rent at the rate of Rs. 21,000 per month. It had also received an interest-free loan from the lessee for the period of continuation of the lease. The assessee declared its income from the said house property at an annual rent of Rs. 2,52,000. The Assessing Officer, on the basis of the fact that the lessee let-out the said house property at an annual rent of Rs. 18,33,000 to different tenants, assessed the annual value on same figure as the income of the assessee and also took into account notional interest on interest-free loan while determining the annual value under section 23(1). On appeal, the Commissioner (Appeals) reversed the order of the Assessing Officer. On further appeal, the Tribunal upheld the order of the Commissioner (Appeals) and directed the Assessing Officer to adopt the gross rent received by the assessee, being lessor, from the let-out property for the purpose of computing income from house property in place of much higher rent fetched by the lessee by sub-letting the same property. On appeal : HELD The provisions contained in section 23 are identical with the provisions contained in section 174 of the Calcutta Municipal Corporation Act, 1980 ('CMC Act'). For the purpose of arriving at the annual value of a holding, the courts have always adopted the process of municipal valuation as identical to the process to be followed under section 23. [Para 3.2] Whether the lessee received higher amount or not is wholly immaterial for…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492