COMMISSIONER OF INCOME-TAX Vs. SARABHAI PRIVATE LIMITED

JUDGEMENT

(1.) THE question referred to this Court reads as under: "whether, the Appellate Tribunal is right in law and on facts in directing the Assessing Officer to take the ALV on the basis of rent received by the assessee or the basis of rental agreement and not on the basis of gross rental value determined by Small Causes Court?"

(2.) TO examine the aforesaid question, some facts may have relevance which can be summarised as under: the Assessee is a Private Ltd. Company. It is having various properties situated at different places and one of the property which is concerned with the present Reference is known as Shantisadan located at Ahmedabad. As per the Assessee, on the basis of the rental agreement, it had received rental income of Rs. 27,467/- from the property of Shantisadan and the said income was shown in the return by the Assessee. However, in the assessment proceedings, the Assessment Officer based on the gross rental value of the property assessed by Small Causes Court, directed for assessment on the basis of such Annual Letting Value of the property at Rs. 1,57,675/ -.

(3.) THE Assessee preferred an appeal against the decision of the Assessment Officer and in Appeal, the Commissioner of Income Tax (Appeals) observed inter alia that so far as the property of Shantisadan at Ahmedabad is concerned, the actual rent received was Rs. 27,467/-, but as the Small Causes Court has fixed the rental value of Rs. 1,36,508/-, and after adding 1/9th of the future, the Annual Letting Value comes to Rs. 1,57,675/-, the same is rightly given effect by the Assessing Officer and therefore, the decision of the Assessing was confirmed.