INCOME TAX ACT, 1961

Section 24

Income from house property - Annual value - Enhancement of annual letting value (ALV) of the house property -

During assessment proceedings, AO noticed that assessee had offered an amount under the head 'Income from House Property' and has shown rent received. He, therefore, called upon the assessee to furnish the details of the property let out and rent received. Assessee furnished the details and submitted that he along with his father and brother is a co-owner of a flat. AO, however, did not find merit in the submissions of assessee referring to rent received from some other properties in the locality, he determined the ALV of the property and after reducing municipal tax and statutory deduction under section 24 made addition to income of assessee. Held: On a perusal of material on record, neither AO nor CIT(A) had made any enquiry with Municipal Authorities or any other Government agencies to find out market rent of assessee's property. Without making any such enquiry, valuation of Municipal Authorities furnished by assessee could not have been rejected, that too, without considering assessee's claim that comparable cases referred to by AO were not at all comparable since they were commercial properties. Determination of ALV by CIT(A) was without any basis and was on a pure estimation. Therefore, when assessee had furnished a valuation from Municipal Authorities determining the ALV, the same could not have been rejected without valid and cogent reasoning. Therefore AO was directed to determine the income from house property.

REFERRED :

FAVOUR : In assessee's favour

A.Y. :

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