Bombay High Court
Zenith Tin Works Ltd. vs Commissioner Of Income-Tax And Ors. on 7 February, 2000
Equivalent citations: (2004)191CTR(BOM)206, [2003]259ITR238(BOM)
Bench: S.H. Kapadia, A.P. Shah
JUDGMENT
1. Since a short point of law is involved in the matter, by consent, the appeal is taken up for final hearing and disposed of.
2. The facts giving rise to this appeal briefly are as follows :
The appellants started construction of a building at Mahalaxmi. The said building was let out to a family trust at the annual rent of Rs. 7,20,000. The said trust created a sub-tenancy in favour of the Union of India. For the purpose of computation of the income under the head "Income from house property", the assessee-company declared Rs. 7,20,000 as actual rent received by the company from the trust as annual letting value. This was for the assessment year 1982-83. For the subsequent assessment years 1983-84, 1984-85 and 1985-86, the Assessing Officer has disregarded the actual rent received by the assessee and substituted the same by the rent received by the trust from the Union of India. The Commissioner of Income-tax confirmed the order of the Assessing Officer. Being aggrieved by the order passed by the Commissioner of Income-tax, the appellants preferred an appeal to the Tribunal. The Tribunal by its impugned judgment fixed the annual letting value at Rs. 20,41,776, against which the appellant filed a reference under Section 256(1) of the Income-tax Act, being Reference No. 2 of 1998.
3. The short point which arises for consideration in this matter is whether the determination of the annual letting value at Rs. 20,41,776 for the purpose of Section 23 of the Act is contrary to the provisions of the Income-tax Act. On the facts it may be mentioned that the Court of Small Causes at Bombay has fixed the standard rent of the premises at Rs. 53,325 per month from March 1, 1982. This evidence, has not been placed on record as indicated by the judgment of the Tribunal dated December 3, 1993, in I. T. Nos. 2882 and 2883 of 1998. In view of the above it is clear that the annual letting value taken into account by the impugned judgment of the Tribunal is without considering the standard rent fixed by the Small Causes Court, which, as stated above, has fixed the standard rent at Rs. 53,325 per month from March 1, 1982.
4. Under the above circumstances, the appeal is allowed and the impugned order passed by the Tribunal dated March 25, 1999, is hereby set aside and the matter stands remanded back to the Assessing Officer to decide the matter afresh in the light of the judgment of the Small Causes Court at Bombay referred to hereinabove.
5. Accordingly, the appeals stand allowed with no order as to costs.
6. Certified copy expedited.