Law: Income Tax Act, 1961

Section: 23

Income-tax--House property---Annual value---Determination of---For assessment year 1983-84, assessee himself declaring annual letting value at certain figure--­For assessment years 1986-87, 1987-88 and 1988-89 annual letting value shown in descending trend without,giving reasons---Merely because annual letting value shown by assessee is more than that fixed by Municipality, value declared by assessee could not be accepted---Assessing Officer right in adopting annual letting value declared by assessee himself for assessment year .1983-84, which was at a higher figure, for assessment years 1986-87, 1987-88 and 1988-89---Indian Income Tax Act, 1961, S.23. For the assessment years 1986-87, 1987-88 and 1988-89, the assessee returned the annual letting value of the property owned by him at Rs. 24,450, Rs. 23,400 and Rs. 22,680, respectively. However, the Income­ tax Officer assessed the annual letting value of the house property owned by the assessee at Rs. 46,441 for each of the years since he found that for the assessment year 1983-84, the annual letting value of the property admitted by the assessee himself was Rs. 46,441 and that the rental value of the property had been increasing year after year. On appeal, the Deputy Commissioner (Appeals) estimated the annual letting value at Rs. 36,000 for each of the assessment years. On further appeal to the Tribunal, both by the assessee and the Revenue, the Tribunal held that as per the municipal valuation, the annual value was Rs. 13,560, that the Deputy Commissioner (Appeals) was not justified in fixing the annual letting value at Rs. 36,000 for the assessment years in question, that the annual letting value returned by the assessee for the years in question was more than the annual value fixed by the municipality and that, therefore the annual letting value returned by the assessee could be accepted. On a reference: Held, that for the years in question the assessee declared the annual letting value in descending trend without giving any cogent reasons therefore and normally the annual letting value should gradually increase and merely because the annual letting value shown by the assessee was more than the amount…

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