Law:

Section:

Section 23 of the Income-tax Act, 1961 - Income from house property - Annual value - Assessment years 1967-68 to 1970-71 - Whether income from house property had to be computed on basis of sum for which property might reasonably be let out from year to year and annual municipal value, and not at amounts received by assessee as actual compensation or rent - Held, yes Facts For the assessment years 1967-68 to 1970-71, the department took the view that the annual value of the property was required to be taken at the amounts received by the assessee as actual compensation in respect of the different properties and not at their municipal rateable value. The Tribunal upheld the view taken by the department. On reference: Held Following the Calcutta High Court's decision in the case of CIT v. Prabhabati Bansali [1983] 141 ITR 419, wherein it was held that the income of house property had to be computed on the basis of the sum for which the property might reasonably be let from year to year and the annual municipal value, in the instant case, the department was directed to redetermine the annual value of different properties in accordance with the aforesaid view. Cases referred to Motichand Hirachand v. Bombay Municipal Corpn. AIR 1968 SC 441, Dewan Daulat Rai Kapoor v. New Delhi Municipal Committee[1980] 122 ITR 700 (SC), Dr. Balbir Singh v. M.C.D. [1985] 152 ITR 388 (SC), Mrs. Sheila Kaushish v. CIT [1981] 131 ITR 435(SC) and CIT v. Prabhabati Bansali [1983] 141 ITR 419 (Cal.). Smt. Shobha Jagtiani for the Applicant. Mrs. Manjula Singh, G.S. Jetley, S.V. Naik and K.C. Sidhwa for the Respondent. JUDGMENT Sugla, J. - The questions of law referred to us for opinion in this reference are: "Assessment years 1967-68 to 1970-71: 1. Whether, on the facts and in the circumstances of the case, the annual value of the property in the Commerce Centre, Bombay could be taken at Rs. 41,328 for 1967-68 and 1968-69, at Rs. 41,638 for 1969-70 and at Rs. 38,073 for 1970-71 assessment being the actual compensation received from Pfizer (P.) Ltd. as against the municipal rateable value of Rs. 13,955, 21,170, 23,470 and 23,470 for the respective assessment years? 2. Whether, on the facts…

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