Where the Rent Control Act is applicable then actual rent received is to be taken as annual value of the property subject to verify all record and books

Court :
INCOME TAX APPELLATE TRIBUNAL

Brief :
At the time of hearing, it was pointed out that the amount mentioned in the grounds is not correct and the correct amount is Rs. 25,70,208/- instead of Rs. 72,96,230/-. The ld DR has accepted this factual mistake in the ground. Accordingly, we proceed with the hearing by taking the amount in dispute is only Rs.25,70,208/-. The assessee claimed the income from the North Stand property at Rs. 1,78,275/- as income from house property. The Assessing Officer has observed that the rental income from the property in question shown by the assessee is not the fair rent. The Assessing Officer computed the fair rent of the property in question at Rs. 38,50,000/-. On appeal, the assessee contended before the CIT (A) that the assessee received Rs. 1,72,275/- from letting out of offices and shops located at North Stand. It was further contended that the rent received by the assessee from the tenant was standard rent as governed by the Rent Control Act and relied upon the various decision of the Hon’ble High Court and the Tribunal. The CIT(A) has held that the estimate made by the Assessing Officer as annual rent at Rs. 38,50,000/- is not as per the provisions of the Act and the same is arbitrary. The CIT (A) has further observed that wherever the Rent Control Act is applicable then the actual rent received has to be taken as annual value of the property. Accordingly, the CIT (A) has deleted the addition made by the Assessing Officer as income from house property.

Citation :
The Dy Commr of Income Tax 1(1), Mumbai - 20 (Applicant) Vs M/s Cricket Club of India Ltd Brabourne Stadium Dinshaw Vaccha Road Mumbai 20 (Respondent)