SONAVALA M V Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE questions of law referred to us for opinion in this reference are :

(2.) THE questions of law referred are many, but the issue involved is only one, namely, computation of annual value of the properties within the meaning of S. 23(1)(a) of the IT Act, 1961, as applicable to the relevant assessment years. The Departmental authorities as well as the Tribunal have held that the annual value of the properties requires to be taken at the amounts received by the assessee as actual compensation in respect of different properties and not at their municipal rateable value. The Tribunal has for the purpose relied upon a Supreme Court decision in the case of Motichand Hirachand vs. Bombay Municipal Corporation, AIR 1968 SC 441.

(3.) HOWEVER , the questions posed to us are not whether the annual value of the property for the purpose of S. 23(1)(a) should be taken at the actual compensation received or on the basis of standard rent. The question is whether the annual value should be taken at the amount which is the actual compensation received or at the amount fixed as municipal rateable value. Obviously, municipal rateable value cannot be equated to standard rent.