Law: Income Tax Act, 1961

Section: 2,23

Income-tax---Property---Annual letting value---Basis for determination---Law applicable---Effect of amendment of S.23 in 1975---Actual rent will be deemed to be annual value if it is in excess of sum for which property might reasonably be expected- to be let--Indian Income Tax Act, 1961, Ss. 2 & 23. A bare reading of section 23 of the Income Tax Act, 1961, shows that 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 be let from year to year; or (b) where the property is let and the annual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the aunt so received or receivable. Obviously, if the amount received or receivable is in excess of the sum for which the property night reasonably be expected to be let from year to year, the amount actually received or receivable shall be the annual value of the property for the purpose of section 22. It is to be noted that section 22 deals with income from house property. Prior to the 1975 amendment, i.e., up to assessment year 1975-76, the actual rent receivers or receivable was not decisive in the determination of the annual value of the property, although it was an important piece of evidence therefor. After the amendment in 1975, if the actual annual rent received or receivable is in excess of the notional annual value, the actual annual rent shall be deemed under section 230)(b) to be the annual value for and from the assessment year 1976-77: CIT v. C. Ramesan (2000) 241 ITR 426 (Ker.) (Appex.) (infra) fol. JUDGMENT ARIJIT PASAYAT, C.J.---On the basis of applications under section 256(1) of the Income Tax Act, 1961 (in short "the Act"), the following questions have been referred for opinion-of this Court by the Income-tax Appellate Tribunal, Cochin Bench (in short "the Tribunal"): "Questions in I.T.A. No. 810/Coch of 1992: (1) Whether, on the facts and in the circumstances of the case and also in view of the fact that the actual rent received for the assessment year 1983-84 being Rs. 46,441 the Tribunal is right in law and fact in upholding the order of…

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