Shri Jayantilal Meghjibhai Patel, Ahmedabad V. The Addl.CIT., Range-7, Ahmedabad

ITA 173/AHD/2011

• Counselvise Citation: 17320514 RSA 2011
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-09-2011
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: C
• Next Hearing Date: 02-09-2011
• Assessment Year: 2007-2008
• Appeal Filed On: 24-01-2011
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S K GUPTADR
• Assessee Lawyers: SN SOPARKARAR
• Keywords: Principle of natural justice; Initiation of penalty proceedings
• Section: 271(1)(c); 234B

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD BENCH 'C' BEFORE SHRI BHAVNESH SAINI, JUDICIAL MEMBER AND SHRI A N PAHUJA, ACCOUNTANT MEMBER ITA NO.173/AHD/2011 (ASSESSMENT YEAR:-2007-08) SHRI JAYANTIBHAI MEGHJIBHAI PATEL, LANE-18, BUILDING NO. 359, SATYAGRAH CHHAVANI, SATELLITE ROAD, AHMEDABAD V/S ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE-7, AHMEDABAD PAN: AEHPP 7163 E [APPELLANT] [RESPONDENT] APPELLANT BY :- SHRI S N SOPARKAR,AR RESPONDENT BY:- SHRI S K GUPTA,DR DATE OF HEARING:- 02-09-2011 DATE OF PRONOUNCEMENT:- 09-09-2011 O R D E R A N PAHUJA: THIS APPEAL BY THE ASSESSEE FILED ON 24.1.2011 AGA INST AN ORDER DATED 29-11-2010 OF THE LD. CIT(APPEALS)-X IV, AHMEDABAD, FOR THE ASSESSMENT YEAR 2007-08, RAISES THE FOLLOWI NG GROUNDS:- [1] THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS IN CONFIRMING THE ARBITRARY AND UNREASONABLE ADDITION OF RS.1,21,968/- U NDER THE HEAD INCOME FROM HOUSE PROPERTY. THE LEARNED CIT(A) OU GHT TO HAVE ACCEPTED THE GROUND REGARDING ANNUAL LETTING VALU E . THE ADDITION MADE BY AO ON NOTIONAL BASIS TO THE TUNE OF 12% OF COST OF THE PROPERTY IS ULTRA VIRES THE ACT, UNJUSTIFIED, IN VIOLA TION OF PRINCIPLES OF NATURAL JUSTICE AND UNCALLED FOR AND DESER VED TO BE DELETED. IT BE SO HELD NOW AND THE ADDITION BE DELET ED. [2] THE LEARNED CIT(A) HAS ERRED IN LAW AND IN FACTS B Y HOLDING THAT THE FOUR TRANSACTIONS AGGREGATING TO RS.18,811/- HAS NEGATIVE DATES SHOWN AS PERIOD OF HOLDING AND THEREFORE CANNOT BE TE RMED AS INCOME FROM SHORT TERM CAPITAL GAINS. THE ID CIT(A) HAS ERRED IN HOLDING THAT THE AMOUNT OF RS.18,811/- WAS TO BE TREA TED AS INCOME FROM BUSINESS. IT BE SO HELD NOW AND THE ENTIRE AMOUNT AS DECLARED BY THE APPELLANT BE DIRECTED TO BE ACCEPTED. [3] THE ID CIT(A) FAILED TO PROPERLY APPRECIATE THE F ACTS, VARIOUS SUBMISSIONS, EXPLANATIONS AND INFORMATION SUBMITTED BY THE 2 ITA NO.173/AHD/2011 APPELLANT FROM TIME TO TIME WHICH OUGHT TO HAVE BEEN CONSIDERED BEFORE PASSING THE IMPUGNED ORDER. [4] THE ID. CIT(A) OUGHT TO HAVE ALLOWED THE APPEAL IN TOTO. [5] LEVY OF INTEREST U/S 234B AND 234D OF THE ACT IS NOT JUSTIFIED ON FACTS. IT OUGHT TO HAVE BEEN DIRECTED TO BE DELETED. I T BE DELETED NOW. [6] THE ID CIT (A) OUGHT TO HAVE HELD THAT INITIATIO N OF PENALTY U/S 271(1)(C) OF THE ACT IS NOT JUSTIFIED ON FACTS OF THE CA SE. IT BE SO HELD NOW. THE APPELLANT CRAVES LEAVE TO ADD, AMEND, ALTER, EDIT, DELETE, MODIFY OR CHANGE ALL OR ANY OF THE GROUNDS OF APPEAL AT THE TIME OF OR BEFORE THE HEARING OF THE APPEAL. 2 AT THE OUTSET, THE LEARNED AR ON BEHALF OF THE AS SESSEE, DID NOT PRESS GROUND NO.2 IN THE APPEAL. THEREFORE, THI S GROUND IS DISMISSED. 3 NOW COMING TO GROUND NO.1 IN THE APPEA L, FACTS, IN BRIEF, AS PER RELEVANT ORDERS ARE THAT RETURN DECLA RING INCOME OF RS.1,79,49,940/- FILED ON 26-10-2007 BY THE ASSESSE E, ENGAGED IN SHARE TRADING, WAS SELECTED FOR SCRUTINY WITH THE S ERVICE OF A NOTICE U/S 143(2) INCOME-TAX ACT, 1961 [HEREINAFTER REFERR ED TO AS THE ACT] ON 08-08-2008.DURING THE COURSE OF ASSESSMENT PROCE EDINGS, THE ASSESSING OFFICER [AO IN SHORT] NOTICED THAT APAR T FROM ONE SELF OCCUPIED PROPERTY AND ONE RENTED PROPERTY, THE ASSE SSEE OWNED TWO OTHER PROPERTIES AT AASTHAN OFFICE NO.305 COSTI NG RS.12,10,000/- AND FLAT AT HARIKUNVAR CO-OPERATIVE HOUSING SOCIETY , COSTING RS.2,42,000/-.SINCE NO PROPERTY INCOME FROM THESE T WO PROPERTIES WAS DECLARED, THE ASSESSEE VIDE LETTER DATED 30-09- 2009 SUBMITTED THAT NOTIONAL RENT SHOULD BE ADDED. IT WAS MENTIONE D THAT THE RETURN ON PROPERTY WAS 6-8% OF THE MARKET VALUE. SINCE IN THIS CASE THE MARKET VALUE WAS NOT AVAILABLE, THE AO CONSIDERED RETURN @ 12% OF THE COST AND ADOPTED RS.1,74,240/- AS THE ANNUAL VA LUE OF THESE TWO PROPERTIES. AFTER DEDUCTION ON ACCOUNT OF REPAIRS, THE AO ADDED AN 3 ITA NO.173/AHD/2011 AMOUNT OF RS.1,21,968/- UNDER THE HEAD INCOME FROM HOUSE PROPERTY. 4. ON APPEAL, THE LEARNED CIT(A) UPHELD THE ADDITIO N IN THE FOLLOWING TERMS:- 3. THE APPELLANT IS AGGRIEVED AGAINST THE ADDITION OF RS.1,21,968/- IN RESPECT OF HOUSE PROPERTY. IN VIEW OF THE FACTS MENTIONED BY THE ASSESSING OFFICER IN THE ASSESSMENT ORDER, I AM NOT INCLINED TO IN TERFERE WITH THE ADDITION MADE BY HIM. THEREFORE, THIS GROUND OF APPE AL IS DISMISSED. 5. THE ASSESSEE IS NOW IN APPEAL BEFORE US AGAINS T THE AFORESAID FINDINGS OF THE LD. CIT(A).THE LEARNED AR ON BEHALF OF THE ASSESSEE SUBMITTED THAT RETURN ON INVESTMENT MAY AT THE MOST BE ADOPTED @6% OF THE COST. THE LEARNED DR, ON THE OTHER HAND, SUPPORTED THE FINDINGS OF THE LEARNED CIT(A). 6. WE HAVE HEARD BOTH THE PARTIES AND GONE THROUGH THE FACTS OF THE CASE. THE ISSUE BEFORE US RELATES TO DETERMINA TION OF ALV OF THE AFORESAID TWO IMMOVABLE PROPERTIES. AT THE OUTS ET, WE MAY HAVE A LOOK AT THE RELEVANT PROVISIONS OF S.22 OF THE ACT WHI CH READ AS UNDER: 22. INCOME FROM HOUSE PORPERTY. THE ANNUAL VALUE OF PROPERTY CONSISTING OF ANY BUILDINGS OR LANDS APPURTENANT THERETO OF WHICH THE ASSESSEE IS THE OWNER, OTHER THAN SU CH PORTIONS OF SUCH PROPERTY AS HE MAY OCCUPY FOR THE PURPOSES OF ANY BUSINESS OR P ROFESSION CARRIED ON BY HIM THE PROFITS OF WHICH ARE CHARGEABLE TO INCOME-TAX, SHALL BE CHARGEABLE TO INCOME-TAX UNDER THE HEAD 'INCOME FROM HOUSE PROPERTY'. 6.1 THE PROVISIONS OF SEC. 23 READ AS UNDER: '23.(1) FOR THE PURPOSES OF S. 22, THE ANNUAL VALUE OF ANY PROPERTY SHALL BE DEEMED TO BE- (A) THE SUM FOR WHICH THE PROPERTY MIGHT REASONABLY BE E XPECTED TO LET FROM YEAR TO YEAR; OR 4 ITA NO.173/AHD/2011 (B) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS L ET AND THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF IS I N EXCESS OF THE SUM REFERRED TO IN CL. (A), THE AMOUNT SO RECEIVED OR RECEI VABLE; OR (C) WHERE THE PROPERTY OR ANY PART OF THE PROPERTY IS LE T AND WAS VACANT DURING THE WHOLE OR ANY PART OF THE PREVIOUS YEAR AND OWING TO SUC H VACANCY THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT THEREOF I S LESS THAN THE SUM REFERRED TO IN CL. (A), THE AMOUNT SO RECEIVED OR RECEI VABLE: PROVIDED THAT THE TAXES LEVIED BY ANY LOCAL AUTHORITY IN RE SPECT OF THE PROPERTY SHALL BE DEDUCTED (IRRESPECTIVE OF THE PREVIOUS YEAR IN W HICH THE LIABILITY TO PAY SUCH TAXES WAS INCURRED BY THE OWNER ACCORDING TO THE METH OD OF ACCOUNTING REGULARLY EMPLOYED BY HIM) IN DETERMINING THE ANNUAL VA LUE OF THE PROPERTY OF THAT PREVIOUS YEAR IN WHICH SUCH TAXES ARE ACTUALLY PAID BY HIM. EXPLANATION-FOR THE PURPOSES OF CL. (B) OR CL. (C) OF THI S SUB-SECTION, THE AMOUNT OF ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER SHALL NOT INCLUDE, SUBJECT TO SUCH RULES AS MAY BE MADE IN THIS BEHALF, THE AMOUNT OF RENT WHICH THE OWNER CANNOT REALISE. 6.2 IN THE INSTANT CASE, THE AFORESAID PROPERTIES HAV E NOT BEEN LET OUT WHILE THE ASSESSEE HAS ONE PROPERTY WHICH IS SOP AND THE OTHER LET OUT.. WHAT IS CHARGEABLE IN TERMS OF PROVISIONS OF SEC. 22 OF THE ACT IS ANNUAL VALUE. ANNUAL VALUE IS DEEMED IN TERMS OF PROVISIONS OF SEC.23 OF TH E ACT. IN TERMS OF CLAUSE (A) OF SECTION 23(1) OF THE ACT, ALV HAS TO BE DETER MINED ON THE BASIS OF SUM FOR WHICH PROPERTY MIGHT BE REASONABLY EXPECTED TO LET FRO M YEAR TO YEAR. CLAUSE (B) STIPULATES THAT WHERE THE PROPERTY OR ANY PART OF TH E PROPERTY IS LET AND THE ACTUAL RENT RECEIVED OR RECEIVABLE BY THE OWNER IN RESPECT TH EREOF IS IN EXCESS OF THE SUM REFERRED TO IN CL. (A), THE AMOUNT SO RECEIVED OR R ECEIVABLE WOULD BE THE ANNUAL VALUE . IN THE CASE BEFORE US, WE ARE REQUIRED TO CONSIDER O NLY THE SCOPE OF S. 23(1)(A) OF THE ACT. . THE SCHEME OF S. 23(1)(A) , IN CONTRADISTINCTION TO S. 23(1)(B), SHOWS THAT FAIR RENT IS THE BASIS TO DETERMINE THE ANNUAL VALUE OF A PROPERTY. THIS WAS THE SOLE BASIS PRIOR TO THE ASST. YR. 1 975-76, HOWEVER, AFTER THE AMENDMENT OF S. 23(1) BY THE TAXATION LAWS (AMENDMEN T) ACT, 1975, THE LEGISLATURE HAS CLEARLY LAID DOWN UNDER S. 23(1)(B) T HAT WHEN THE ACTUAL ANNUAL RENT RECEIVED OR RECEIVABLE IS IN EXCESS OF THE FAIR RENT DETERMINABLE UNDER S. 23(1)(A), THEN SUCH HIGHER ACTUAL ANNUAL RENT WOULD CONSTITUTE THE ANNUAL VALUE OF THE PROPERTY. IT IS IMPORTANT TO BEAR IN MIND THAT U NDER S. 22, THE MEASURE OF 5 ITA NO.173/AHD/2011 INCOME FROM HOUSE PROPERTY IS ITS ANNUAL VALUE. THE AN NUAL VALUE IS TO BE DECIDED IN ACCORDANCE WITH S. 23(1) . WE ARE OF THE OPINION THAT UNLESS THE SUM FOR WHICH PROPERTY MIGHT BE REASONABLY EXPECTED TO LET FROM YEAR TO YEAR IS DETERMINED , EXPECTED RETURN ON INVESTMENT CAN NOT BE STRAIGHT AWAY ADOPTED AS ANNUAL VALUE OF THE PROPERTY. IN THE INSTANT CASE, TH ERE IS NOTHING TO SUGGEST THAT THE AO OR THE LD. CIT(A) HAVE DONE THAT EXERCISE. IN THE CASE OF CIT VS. SATYA CO. LTD. (1994) 75 TAXMAN 193 (CAL), A DIVISION BENCH OF THE HONBLE CALCUTTA HIGH COURT HELD THAT WHEN THE ANNUAL VALUE IS DECIDE D UNDER S. 23(1)(A) OF THE ACT WITH REFERENCE TO THE FAIR RENT, THEN THE SAID FA IR RENT TAKES INTO CONSIDERATION EVERYTHING.. HONBLE GUJRAT HIGH COURT IN THE CASE O F COMMISSIONER OF INCOME- TAX. VS M. K. SHIVRAJ SINGHJI. 192 ITR 120(GUJ) HELD THAT RENT CONTROL LAW IS IN FORCE IN GUJARAT AND THIS LAW PROVIDES FOR THE DETERMI NATION OF THE STANDARD RENT. THE STANDARD RENT UNDER THE RENT CONTROL LAW HAS TO B E ADOPTED AS THE BASIS FOR DETERMINING THE ANNUAL LETTING VALUE. ANNUAL LETTIN G VALUE MAY BE LESS, BUT CANNOT EXCEED THE STANDARD RENT. IN DEWAN DAULAT RAI KAPOOR V. NEW DELHI MUNICIPAL COMMITTEE [1980] 122 ITR 700 , THE HONBLE SUPREME COURT HELD THAT THE ANNUAL VALUE OF BUILDING, FOR THE PURPOSES OF HOUSE TAX, WHET HER UNDER SECTION 3(1)(B) OF THE PUNJAB MUNICIPAL ACT, 1911, OR UNDER SECTION 116 OF THE DELHI MUNICIPAL CORPORATION ACT, 1957, IS LIMITED TO THE MEASURE OF ST ANDARD RENT DETERMINABLE ON THE PRINCIPLES LAID DOWN IN THE RENT CONTROL ACT AND I T CANNOT EXCEED SUCH A MEASURE OF STANDARD RENT. THE ASSESSING AUTHORITY WOULD HAVE TO ARRIVE AT ITS OWN FIGURE OF STANDARD RENT BY APPLYING THE PRINCIPLES LAI D DOWN IN THE RENT CONTROL ACT FOR DETERMINATION OF THE STANDARD RENT AND DETERM INE THE ANNUAL VALUE OF THE BUILDING ON THE BASIS OF SUCH FIGURE OF STANDARD RENT. E XPLAINING THIS DECISION OF THE SUPREME COURT IN DEWAN DAULAT RAI KAPOOR'S CASE [ 1980] 122 ITR 700 , THE SUPREME COURT, IN BALBIR SINGH (DR.) V. M. C. D. [1 985] 152 ITR 388 , OBSERVED THAT IN DEWAN DAULAT RAI KAPOOR'S CASE [1980] 122 ITR 700 , THE SUPREME COURT ONLY DECIDED THAT EVEN IF THE LANDLORD WAS LAWFULLY E NTITLED TO RECEIVE THE CONTRACTUAL RENT FROM THE TENANT, SUCH CONTRACTUAL RENT COULD NOT BE TAKEN TO BE THE RATEABLE VALUE OF THE BUILDING, BECAUSE THE REA SONABLE EXPECTATION OF THE LANDLORD TO RECEIVE RENT FROM A HYPOTHETICAL TENANT COULD NOT POSSIBLY EXCEED THE STANDARD RENT DETERMINABLE IN ACCORDANCE WITH THE PROV ISIONS LAID DOWN IN THE RENT CONTROL ACT. THE STANDARD RENT DETERMINABLE ON T HE PRINCIPLES LAID DOWN IN 6 ITA NO.173/AHD/2011 THE RENT CONTROL ACT WAS LAID DOWN BY THE COURT AS THE UPPER LIMIT OF THE RENT WHICH THE LANDLORD MAY EXPECT TO RECEIVE FROM A HYPOT HETICAL TENANT IF THE BUILDING WERE LET OUT TO HIM FROM YEAR TO YEAR. THE COURT DID NOT HOLD THAT, EVEN IF THE ACTUAL RENT RECEIVABLE BY THE LANDLORD FROM THE TENAN T OR THE RENT WHICH THE OWNER MAY REASONABLY EXPECT TO RECEIVE FROM A HYPOTHETICAL TE NANT WERE LOWER THAN THE STANDARD RENT DETERMINABLE IN ACCORDANCE WITH THE PRIN CIPLES LAID DOWN IN THE RENT CONTROL ACT, THE STANDARD RENT MUST STILL BE TAKEN TO BE THE RATEABLE VALUE OF THE BUILDING. WE MAY HERE REFER TO THE DECISION OF THE HONBLE SUPR EME COURT IN THE CASE OF DR. BALBIR SINGH VS. MCD. IN THIS CASE, THEI R LORDSHIPS HELD AS UNDER: 'UNDER THE PROVISIONS OF THE DMC ACT, 1957, THE CRITERIA FOR DETERMINING RATEABLE VALUE OF A BUILDING IS THE ANNUAL RENT AT WH ICH SUCH BUILDING MIGHT REASONABLY BE EXPECTED TO BE LET FROM YEAR TO YEAR LESS CER TAIN DEDUCTIONS. THE WORD 'REASONABLY' IS VERY IMPORTANT. WHAT THE OWNER MI GHT REASONABLY EXPECT TO GET FROM A HYPOTHETICAL TENANT IF THE BUILDING WERE LET FROM YEAR TO YEAR, AFFORDS THE STATUTORY YARDSTICK FOR DETERMINING THE RATEABLE VALU E. WHAT IS REASONABLE IS A QUESTION OF FACT AND IT DEPENDS ON THE FACTS AND CIRCUMSTAN CES OF A GIVEN SITUATION. ORDINARILY, 'A BARGAIN BETWEEN A WILLING L ESSOR AND A WILLING LESSEE UNINFLUENCED BY ANY EXTRANEOUS CIRCUMSTANCES MAY AFFORD A GUI DING TEST OF REASONABLENESS' AND IN NORMAL CIRCUMSTANCES, THE ANNUAL REN T PAYABLE BY A TENANT TO THE LANDLORD WOULD AFFORD RELIABLE EVIDENC E OF WHAT THE LANDLORD MAY REASONABLY EXPECT TO GET FROM THE HYPOTHETICAL TENANT, U NLESS THE RENT IS INFLATED OR DEPRESSED BY REASON OF EXTRANEOUS CONSIDERATIONS SUCH AS RELATIONSHIP, EXPECTATION OF SOME OTHER BENEFIT, ETC. THERE WOULD OR DINARILY BE A CLOSE APPROXIMATION BETWEEN THE ACTUAL RENT RECEIVED BY THE L ANDLORD AND THE RENT WHICH HE MIGHT REASONABLY EXPECT TO RECEIVE FROM A HYPOTH ETICAL TENANT. BUT IN THE CASE OF A BUILDING SUBJECT TO THE RENT CONTROL LE GISLATION, THIS APPROXIMATION MAY AND OFTEN DOES GET DISPLACED, BECAUSE UNDER THE REN T CONTROL LEGISLATION, THE LANDLORD CANNOT CLAIM TO RECOVER FROM THE TENANT MORE THAN THE STANDARD RENT AND HIS REASONABLE EXPECTATION MUST, THEREFORE, BE LIMITED B Y THE MEASURE OF THE STANDARD RENT LAWFULLY RECOVERABLE BY HIM.' 6.3 IN THE CASE OF MOTICHAND HIRACHAND, AIR 1 968 SC 441.THEIR LORDSHIPS OF THE HONBLE SUPREME COURT HELD THAT IN CERTAIN CIR CUMSTANCES EXTRANEOUS CIRCUMSTANCES MAY DEFLATE THE FAIR RENT. HONBLE SUPREME COURT LAID DOWN THE FOLLOWING PRINCIPLE OF LAW: - IT IS WELL RECOGNIZED PRINCIPLE IN RATING THAT BOTH G ROSS VALUE AND THE NET ANNUAL VALUE ARE ESTIMATED BY REFERENCE TO THE RENT AT WHICH THE PROPERTY MIGHT REASONABLY BE EXPECTED TO LET FROM YEAR TO YEAR. VARIOUS METHODS OF VALUATION ARE APPLIED INSTANCE, BY REFERENCE TO THE ACTUAL RENT PAID F OR THE PROPERTY OR FOR OTHERS COMPARABLE TO IT OR WHERE THERE ARE NO RENTS BY REFERE NCE TO THE ASSESSMENTS OF 7 ITA NO.173/AHD/2011 COMPARABLE PROPERTIES OR TO THE PROFITS CARRIED FROM T HE PROPERTY OR TO THE COST OF CONSTRUCTION . 6.4. THE HONBLE BOMBAY HIGH COURT IN THE CASE OF J K INVESTORS (BOMBAY) LTD. (SUPRA) HAS ALSO LAID DOWN THE FOLLOWING PRINCIPLES OF LAW: - AT THE COST OF REPETITION, IT MAY IN ORDER TO ARRIVE AT SUCH HYPOTHETICAL RENT, FOR BE MENTIONED THAT UNDER SECTION 23(1)(A), THE ASSESSING OFFI CER HAS TO DECIDE THE FAIR RENT OF THE PROPERTY. WHILE DECIDING THE FAIR RE NT, VARIOUS FACTORS COULD BE TAKEN INTO ACCOUNT. IN SUCH CASES VARIOUS METHODS LIKE THE CO NTRACTORS METHOD COULD BE TAKEN INTO ACCOUNT. 6.5 IN THE INSTANT CASE, FOR DETERMINATION OF THE ANNUAL LETTING VALUE UNDER CL. (A) OF S. 23(1), THE FIRST QUESTION IS AS TO WHETHER T HE PROPERTY IS SUBJECT TO THE STATUTORY CONTROLS UNDER THE RELEVANT RENT CONTROL ACT. IN CASE THE RELEVANT PROVISIONS OF THE RENT CONTROL ACT ARE APPLICABLE, THE AO IS BOUND TO DETERMINE THE STANDARD RENT OF THE PREMISES IN ACCORDANCE WITH PRO VISIONS OF THAT ACT. HOWEVER, WHERE THE STANDARD RENT HAS NOT BEEN DETERM INED BY THE RENT CONTROL AUTHORITY, THE AO IS DUTY BOUND TO DO THE EXERCISE HIM SELF AND DETERMINE THE STANDARD RENT AS PER THE PROVISIONS OF THE RELEVANT REN T CONTROL ACT. WE FIND THAT THE PROPERTY IN THIS CASE IS SITUATE IN AHMEDABAD WHI LE THE ORDERS OF AO AND LD. CIT(A) ARE SILENT ON THE ASPECT AS TO WHETHER THE AFOR ESAID TWO PROPERTIES ARE COVERED BY THE RENT CONTROL ACT. . AFTER THE AFORECITE D DECISION OF HONBLE SUPREME COURT , S. 23 OF THE IT ACT, 1961, HAS BEEN AMENDED W.E.F. 1ST APRIL, 1985, WHICH PROVIDES FOR ASSESSMENT OF THE ANNUAL LETTING VALUE ON THE BASIS OF EXPECTED RENTAL VALUE OR THE ACTUAL RENT RECEIVED OR R ECEIVABLE, WHICHEVER IS HIGHER. NOW, IN THIS CASE, NEITHER THE AO OR NOR THE LD. CIT(A) HAVE UNDERTAKEN SUCH AN EXERCISE. ACCORDINGLY, WE CONSIDER IT FAIR AND APP ROPRIATE TO VACATE THE FINDINGS OF THE LD. CIT(A) AND RESTORE THE MATTER TO THE FILE OF AO WITH THE DIRECTIONS TO DETERMINE ALV IN THE LIGHT OF AFORECITED POSITION IN LAW, ENUNCIATED BY HONBLE SUPREME COURT AND HONBLE GUJRAT HIGH CO URT AND OF COURSE AFTER ALLOWING SUFFICIENT OPPORTUNITY TO THE ASSESSEE. GROUND NO. 1 IN THE APPEAL IS, THUS, ALLOWED AS INDICATED HEREINBEFORE. 8 ITA NO.173/AHD/2011 7. GROUND NOS.3 AND 4 BEING MERE PRAYER NOR ANY SUB MISSIONS HAVING BEEN MADE ON THESE GROUNDS, DO NOT REQUIRE A NY SEPARATE ADJUDICATION AND ARE, THEREFORE, DISMISSED. 8. GROUND NO.5 RELATES TO LEVY OF INTEREST U/S 234B AND 234D OF THE ACT. THE LD. AR ON BEHALF OF THE ASSESSEE DID NOT MAKE ANY SUBMISSIONS ON THIS GROUND. THE LEVY OF INTEREST U/S 234B & 234D OF THE ACT BEING MANDATORY [COMMISSIONER OF INCOME TAX. VS ANJUM M. H. GHASWALA AN D OTHERS,252 ITR 1(SC), AFFIRMED BY HON'BLE APEX COURT IN THE CASE OF CIT V. HINDUSTAN BULK CARRIERS [2003] 259 ITR 449 (SC) AND IN THE CASE OF CIT V. SANT RAM MANGAT RAM JEWELLERS [2003] 264 ITR 564 (SC) ], THIS GROUND IS DISMISSED. HOWEVER, THE AO MAY ALLOW CONSEQUENTIAL RELIEF ,IF ANY, WHILE GIVI NG EFFECT TO THIS ORDER. 9. GROUND NO.6 RELATES TO INITIATION OF PENALTY PRO CEEDINGS U/S 271(1)(C) OF THE ACT . SINCE NO APPEAL IS PROVIDED A GAINST MERE INITIATION OF PENALTY PROCEEDINGS, THIS GROUND IS DISMISSED.. 10. NO ADDITIONAL GROUND HAVING BEEN RAISED BEFORE US IN TERMS OF RESIDUARY GROUND IN THE APPEAL, ACCORDINGLY, THIS G ROUND IS DISMISSED. 11. NO OTHER PLEA OR ARGUMENT WAS MADE BEFORE US. 12. IN THE RESULT, APPEAL IS PARTLY ALLOWED FOR ST ATISTICAL PURPOSES. ORDER PRONOUNCED IN THE COURT TODAY ON 9-09-2011 SD/- SD/- ( BHAVNESH SAINI ) JUDICIAL MEMBER ( A N PAHUJA ) ACCOUNTANT MEMBER DATED : 9-09-2011 COPY OF THE ORDER FORWARDED TO: 1. SHRI JAYANTIBHAI MEGHJIBHAI PATEL, LANE-18, BUI LDING NO. 359, SATYAGRAH CHHAVANI, SATELLITE ROAD, AHMEDABAD 2. THE ADDITIONAL COMMISSIONER OF INCOME-TAX, RANGE -7, AHMEDABAD 3. CIT CONCERNED 9 ITA NO.173/AHD/2011 4. CIT(A)-XIV, AHMEDABAD 5. DR, ITAT, AHMEDABAD BENCH-C, AHMEDABAD 6. GUARD FILE BY ORDER DEPUTY REGIS TRAR/ ASSISTANT REGISTRAR ITAT, AHMEDABAD