RADHA DEVI DALMIYA Vs. COMMISSIONER OF INCOME-TAX

JUDGEMENT

(1.) For the assessment year 1971-72 the Appellate Tribunal held that for the purposes of Section 22 of the I.T. Act, 1961, the annual letting value of the house be fixed at Rs. 14,000. Aggrieved by this finding, this reference has been made at the instance of the assessee.

(2.) It appears that the assessee constructed a house in Tilak Nagar, Kanpur. Taking into consideration the investment made by the assessee as well as the likely return, the ITO determined the annual letting value at Rs. 18,000. This finding was affirmed by the AAC. The assessee took the matter in appeal to the Tribunal. The Tribunal held :--

(3.) The figure of Rs. 8,700 was the annual letting value determined by the municipal authorities. The assessee was relying upon it. It appears that the assessee had spent a sum of Rs. 1,90,000 for making the house in Tilak Nagar, Kanpur. The conclusion of the Tribunal that for the year 1971-72 a fair return of about 7% on the investment be taken as the correct criterion is, in our opinion, eminently just and proper. The annual letting value determined by the municipal authorities at Rs. 8,700 would mean an expected return of about 3% only. It is well known that no one would invest such an amount to expect such a low return. There is, on the record, no evidence to show as to what factors or materials were taken into consideration by the municipal authorities while determining the annual letting value at Rs. 8,700.