The Jodhpur bench of the Income Tax Appellate Tribunal ( ITAT ) has held that the house which is not having any actual rental income but self-occupied by the assessee, then deemed rent should be determined as per the municipal ratable value.
In the instant case, the Assessing Officer noticed that the assessee has purchased a house at Kamla Enclave, Bhilwara but no rental income from the said house property was declared. Since the assessee was already having another house property at 6-a-42, Chandrashekhar Azad Nagar, Bhilwara, therefore, the annual value of the property at Kamla Enclave, Nagar, Bhilwara, was determined on the basis of the comparable case. He added the same was to the total income of the assessee as deemed rent.
On appeal, the Commissioner of Income Tax (Appeals) concluded the matter in favour of the assessee.
On the second appeal, the Tribunal noted that the property purchased by the assessee is situated at Kamla Crystal and not in Kamla Enclave and the same was used for residential purposes by the assessee since its purchase.
“Further, the house at 6-A-42, C.S. Azad Nagar was occupied for the business of R.K. Textiles for grading and finishing job. The house which is not having any actual rental income but self occupied by assessee should be determined as per the municipal ratable value. Accordingly, the matter is restored to file of the Assessing Officer to find out the municipal ratable value of the house for computing income under Section 22 of the Income Tax Act,” the Tribunal said.
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