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“annual value”

Chapter I - PreliminarySection 2 - DefinitionsSection 2(2) / Section 23 / ITR Schedule HP425 judgments

The decision most relied on for annual value is Chennai Properties & Investments Ltd. v. CIT (373 ITR 673), cited in 381 judgments on BharatTax.

Leading authorities on annual value

Chennai Properties & Investments Ltd. v. CIT
373 ITR 673 · 2015 · Supreme Court
381
citing judgments

Income from immovable property, such as unsold flats or shops, held by an assessee as stock-in-trade in their business of acquiring and holding properties is taxable as 'business income' and not 'income from house property'. Consequently, notional annual letting value under Section 23 cannot be attributed to such stock-in-trade.

CIT v. Ansal Housing Finance & Leasing Co. Ltd.
354 ITR 180 · 2013 · High Court
208
citing judgments

Annual Letting Value (ALV) of unsold stock-in-trade flats/shops held by a real estate developer can be assessed under Section 22 of the Income Tax Act, 1961, as income from house property. This approach was followed by the Assessing Officer (AO) based on this decision.

CIT v. Tip Top Typography
368 ITR 330 · 2014 · High Court
161
citing judgments

For computing income from house property, the Annual Letting Value (ALV) cannot be arbitrarily estimated by the Assessing Officer, but must be determined based on the Municipal ratable value of the property.

CIT v. Moni Kumar Subba
333 ITR 38 · 2011 · High Court
78
citing judgments

Notional interest on an interest-free security deposit cannot be considered as actual or deemed rent under Section 23(1) of the Act. For determining Annual Letting Value (ALV) under Section 23(1)(a), it must be in accordance with municipal laws, considering extraneous circumstances, but not exceeding the standard rent as per rent control legislation.

Mrs. Shiela Kaushish v. CIT
131 ITR 435 · 1981 · Supreme Court
64
citing judgments

Income-tax authorities cannot add notional interest on a tenant's deposit to the income from a house property, as there is no provision for this in Sections 22 or 23 of the Income-tax Act, 1961. The annual value of a house property is determined by specific provisions within these sections, and not by hypothetical calculations.

Radha Devi Dalmia v. CIT
125 ITR 134 · 1980 · High Court
55
citing judgments

When determining income from house property under Section 23, the Annual Letable Value (ALV) can be estimated by deeming 7% of the property's value as notional rent, particularly when actual rent or other clear basis for ALV is absent.

CIT v. Bhaskar Mitter
73 Taxmann 437 · 1994 · High Court
52
citing judgments

The annual letting value of a property can be determined at a figure lower than that returned by the assessee if the returned value is not in accordance with the principles for determining annual letting value under section 23. Assessees can contend for a value based on the correct application of law.

Commissioner of Income Tax v. J. K. Investors (Bombay) Ltd.
248 ITR 723 · 2001 · High Court
47
citing judgments

The annual value of house property under Section 23 of the Income Tax Act cannot include notional interest on interest-free security deposits received from tenants. Notional interest cannot be added to an interest-free security deposit to arrive at the annual value for income from house property.

Judgments citing annual value

Michelle Y. Poonawalla, Pune vs. DCIT-Cir-7, Pune

In the result, the appeals of the assessee for both the AYs 2013-14

ITA 664/PUN/2024[2013-14]Status: DisposedITAT Pune18 Sept 2024AY 2013-14

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: N O N EFor Respondent: Shri Ramnath P. Murkunde
Section 143(2)Section 22Section 23Section 24Section 263Section 57

enabled me to acquire possession of said flat. 3. I invite your kind attention towards provision of Sec 23 which deals with determination of annual value. Sec 23 also states that determination of annual let-able value is, the sum for which the property might be reasonably expected ... head "Income from house property shall be computed after making the following deductions, namely- (a) a sum equal to thirty per cent of the annual value. (b) where the property has been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such capital

M/S. Varun Developers, Pune vs. ACIT, Circle 2, Pune

In the result, the appeal filed by the assessee stands allowed

ITA 613/PUN/2024[2016-17]Status: DisposedITAT Pune10 Sept 2024AY 2016-17

Bench: SHRI R. K. PANDA (Vice President), SHRI VINAY BHAMORE (Judicial Member)

For Appellant: Shri Nikhil PathakFor Respondent: Shri Sourabh Nayak
Section 143(2)Section 143(3)Section 22Section 23(1)(c)Section 24Section 80I

holding that these unsold units were not occupied by the assessee for the purposes of its business by the assessee firm and hence, the annual value of 2 such unsold units was chargeable to tax as income from house property u/s 22 of the Act. 3] The learned ... stock in trade and hence, since these units were occupied by the assessee for its business purposes, there was no reason to tax the annual value of such unsold units u/s 22 of the Act as income from house property. 4] Without prejudice to the above grounds, the assessee submits

Mrs. Meena Ashwin Gogari, Navi Mumbai vs. DCIT, Circle-27(2), Navi Mumbai

In the result, appeal filed by the assessee is treated as allowed

ITA 13/MUM/2024[2021-22]Status: DisposedITAT Mumbai03 Sept 2024AY 2021-22

Bench: Shri B.R. Baskaran & Ms. Kavitha Rajagopal: A.Y : 2021-22

For Appellant: Shri Nishit GandhiFor Respondent: Smt. Mahita Nair
Section 143(1)Section 23(2)(a)Section 24

material to show that the assessee has actually received the said Annual letting value. Accordingly, we are of the view that the annual value of 4 Mrs. Meena Ashwin Gogari the self-occupied property cannot be considered for arriving at the total income, merely for the reason that the same

Deputy Commissioner of Income Tax -23(1), Mumbai vs. Laxmi Finance and Leasing Companies Co-Op. Society Ltd, Mumbai

In the result, appeals of the Revenue and Cross

ITA 4233/MUM/2023[2015-16]Status: DisposedITAT Mumbai29 Aug 2024AY 2015-16

Bench: SHRI AMIT SHUKLA (Judicial Member), SMT RENU JAUHRI (Accountant Member)

Section 23(1)(a)

case and in law, the Ld. CIT(A) has erred in principle by not appreciating the contention of the AO in determining the annual value of the property 4 Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in not applying ... upon by the ld. AO in his assessment order as well as by the assessee before him, held that in respect of vacant properties, annual value will be the municipal value u/s.23(1)(a). The assessee pleaded before the ld. CIT(A) that though these five properties as tabulated supra

Deputy Commissioner Ofincome Tax -23(1), Mumbai vs. Laxmi Finance and Leasing Company Co-Op. Society Ltd, Mumbai

ITA 4232/MUM/2023[2014-15]Status: DisposedITAT Mumbai29 Aug 2024AY 2014-15
Section 23(1)(a)

case and in law, the Ld. CIT(A) has erred in principle by not appreciating the contention of the AO in determining the annual value of the property 4 Whether on the facts and circumstances of the case and in law, the CIT(A) has erred in not applying

DCIT, Circle, Patiala vs. M/S Punjab State Power Corporation Ltd., Patiala

In the result, ground no. 1 & 3 of the Revenue’s appeal is allowed and ground no

ITA 737/CHANDI/2022[2017-18]Status: DisposedITAT Chandigarh27 Aug 2024AY 2017-18

Bench: SHRI. VIKRAM SINGH YADAV (Accountant Member), SHRI. PARESH M. JOSHI (Judicial Member)

For Appellant: Shri Rajiv Saldi, CAFor Respondent: Smt. Kusum Bansal, CIT, DR
Section 143(2)

circulating capital. If for example the assessee a bank, utilizes its circulating capital in the purchase of a building or land appurtenant thereto, the annual value of such building shall fall under the head `Income from house property', and not `Profits and gains of business or profession' for the reason ... under this head. Similarly an income to fall under the head `Income from house property', it is vital that the same should be the annual value of property consisting of any building of land appurtenant thereto, of which the assessee is owner. Thus the conditions of section 22 should

DCIT-CC-4(2), Mumbai vs. Raheja Universal Private Limited, Mumbai

ITA 4847/MUM/2023[2014-15]Status: DisposedITAT Mumbai26 Aug 2024AY 2014-15

Bench: Shri Narender Kumar Choudhry & Shri Girish Agrawal

For Respondent: Shri Anuj Kisnadwala, CA
Section 115JSection 143(1)Section 143(3)Section 147Section 14ASection 22Section 23(1)(a)Section 250

flats, built by assessee engaged in construction business, lying unsold, is assessable as income from house property. For the purpose of section 22, the annual value of any property shall be deemed to be the sum for which the property might reasonably be expected to let from year to year

Deputy Commissioner of Income Tax, Circle- 4(1)(1), Bangalore vs. Ramesh Narayana Reddy (HUF), Bangalore

ITA 720/BANG/2024[2020-21]Status: DisposedITAT Bangalore30 Jul 2024AY 2020-21

Bench: Shri Chandra Poojari & Shri Prakash Chand Yadavdcit, Circle - 4(1)(1) Ramesh Narayana Reddy (Huf) Room No. 230, 2Nd Floor #62, Sonnenahalli Bmtc Building, Koramangala Vs. Mahadevapura Bangalore 560095 Bangalore 560048 Pan – Aamhr4231A (Appellant) (Respondent) Assessee By: Shri V. Srinivasan, Advocate Revenue By: Shri Subramanian S., Jcit-Dr Date Of Hearing: 24.07.2024 Date Of Pronouncement: 30.07.2024 O R D E R Per: Prakash Chand Yadav, J.M. The Present Appeal Of The Revenue Challenges The Din & Order No. Itba/Nfac/S/2003-24/1061428431(1) Of The National Faceless Appeal Centre, Delhi [Cit(A)] Dated 23.02.2024 Passed Under Section 250 Of The Income Tax Act, 1961 (The Act) In Respect Of Assessment Year (Ay) 2020-21. 2. Aggrieved With The Order Of The Ld. Cit(A) The Revenue Has Come Up In Appeal Before Us & Raised The Following Grounds: - “The Ld. Addl. Cit(A) Has Erred In Deleting The Addition Of Rs. 1,18,01,752 As Deemed Rental Income On The Ground That There Was No Addition Made In The Case Of Other Two Co-Owners Of The Same Property For The Same Assessment Year. The Nfac Has Not Considered That The Assessments Of Three Different Co-Owners Were Completed In Faceless Manner. There Is No Algorithm For Allocation Of Cases Of Three Different Assessees Having Common Interest In A Single Property To A Single Assessing Officer For Assessment. Hence, Omission Of Addition In Cases Of Other Two Co-Owners Of The Property Wherein Assesses Is An Owner May Be Because

For Appellant: Shri V. Srinivasan, AdvocateFor Respondent: Shri Subramanian S., JCIT-DR
Section 194Section 250

addition of deemed rental income applying the rule of equality before law. Notwithstanding to this on merits also we observe that, whether deemed rental annual value is assessable in respect of the flats which were not acquired for self-occupation rather kept as investment for sale, we find that Coordinate

Society of the Congregation of Franciscan Brothers, Mumbai vs. The Assistant Commissioner of Income Tax(E), Circle -2, Mumbai

In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for In the result, the appeal of the assessee is allowed for statistical purposes

ITA 4747/MUM/2023[2016-17]Status: DisposedITAT Mumbai24 Jul 2024AY 2016-17

Bench: Shri Om Prakash Kant () & Shri Sunil Kumar Singh () Assessment Year: 2016-17 Society Of The Congregation Of The Asst. Cit (E), Circle 2(1), Franciscan Brothers, Mtnl Building, Peddar Road, Vs. 1, Mount Poinsur, Borivali West, Mumbai-400026. Mumbai-400103. Pan No. Aaats 1005 K Appellant Respondent

For Appellant: Ms. Rajeshwari Menon, Sr. DRFor Respondent: Mr. N Jayendran
Section 11Section 24

erred in confirming the disallowance of claim of statutory deduction of Rs. 1 deduction of Rs. 13,39,074/- being 30% of annual value from house being 30% of annual value from house property income u/s.24 of the Act made by the AO on the ground that property income u/s.24

Deepak Kantilal Shah, Mumbai vs. Deputy Commissioner of Income Tax Circle-19(1), Mumbai

Appeal is allowed in above terms

ITA 1423/MUM/2024[2018-19]Status: DisposedITAT Mumbai10 Jul 2024AY 2018-19

Bench: Shri Satbeer Singh Godara (Jm) & Shri Girish Agrawal (Am)

Section 143(3)Section 24

deemed to be let out property (DLOP). He placed emphasis on term "at his option". 6.1.3 Section 23 speaks about the determination of annual value. Before proceeding further we need to look at the provisions of section 23(2) & 23(4) of the IT. Act, which are reproduced as under ... profession carried on at any other place, he has to reside at that other place in a building not belonging to him, the annual value of such house or part of the house shall be taken to be nil. (3) ............. (4) Where the property referred to in sub-section

Atul Govindji Shroff, Vadodara vs. The DCIT, Central Circle-3, Vadodara

In the result, appeal filed by the Assessee is dismissed

ITA 1443/AHD/2019[2017-18]Status: DisposedITAT Ahmedabad05 Jul 2024AY 2017-18

Bench: Smt. Annapurna Gupta (Accountant Member), Shri Siddhartha Nautiyal (Judicial Member)

For Appellant: Shri Milin Mehta, A.RFor Respondent: Shri Kamlesh Makwana, CIT/DR
Section 132Section 143(3)Section 2Section 234ASection 234BSection 270ASection 54F

house, the assessee will not be hit by the Proviso to Section-54F. The income from house property chargeable to tax u/s.22 is the annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property

Sunil Ramnarayan Mantir, Jalgaon vs. Deputy Commissioner of Income Tax, Circle-1, Jalgaon

In the result, the appeals of the assessee for both the AYs 206-17

ITA 92/PUN/2024[2017-18]Status: DisposedITAT Pune28 Jun 2024AY 2017-18

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: Shri Sanket JoshiFor Respondent: Shri Sourabh Nayak
Section 23(1)Section 23(1)(a)Section 23(1)(c)

instant case, then the assessee submits that the A.O. may please be directed to adopt the municipal ratable value of the property as annual value u/s 23(1)(a) and he addition made by A.O. by estimating market value of rent may be deleted. 6. The assessee submits that while ... computing the annual value u/s 23(1), the A.O. may please be directed to allow deduction in respect of municipal taxes paid by the appellant as per first proviso to section 23(1) of the Act which has remained to be considered by the A.O. while computing the income under

Sunil Ramnarayan Mantri, Jalgaon vs. Deputy Commissioner of Income Tax, Circle-1, Jalgaon

In the result, the appeals of the assessee for both the AYs 206-17

ITA 91/PUN/2024[2016-17]Status: DisposedITAT Pune28 Jun 2024AY 2016-17

Bench: Shri R.K. Panda & Ms. Astha Chandra

For Appellant: Shri Sanket JoshiFor Respondent: Shri Sourabh Nayak
Section 23(1)Section 23(1)(a)Section 23(1)(c)

instant case, then the assessee submits that the A.O. may please be directed to adopt the municipal ratable value of the property as annual value u/s 23(1)(a) and he addition made by A.O. by estimating market value of rent may be deleted. 6. The assessee submits that while ... computing the annual value u/s 23(1), the A.O. may please be directed to allow deduction in respect of municipal taxes paid by the appellant as per first proviso to section 23(1) of the Act which has remained to be considered by the A.O. while computing the income under

Deputy Commissioner of Income Tax Circle-2, Nagpur vs. M/S Sas Developers & Engineers `, Nagpur

In the result, the appeal filed by department is dismissed

ITA 82/NAG/2020[2015-16]Status: DisposedITAT Nagpur18 Jun 2024AY 2015-16

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Manoj Moriyani, AdvocateFor Respondent: Shri Surjit Kumar Saha, Sr.DR
Section 143(3)Section 24

head “Income from House Property” shall be computed after making the following deductions namely – (a) a sum equal to thirty percent of the annual value; (b) where the property had been acquired, constructed, repaired, renewed or reconstructed with borrowed capital, the amount of any interest payable on such on capital

ACIT-3(1)(1), Mumbai vs. Gentex Merchants Pvt. Ltd., Mumbai

Appeal of the revenue is partly allowed

ITA 196/MUM/2024[2017-18]Status: DisposedITAT Mumbai11 Jun 2024AY 2017-18

Bench: Ms Padmavathy S, Am & Shri Raj Kumar Chauhan, Jm

For Appellant: Shri Anuj Kisnadwala, CAFor Respondent: Shri Mahesh Parwani, Sr. DR

following grounds of appeal: “1. "On the facts and circumstances of the case and in law, the Ld.CIT(A) erred in restricting the annual value of the property let out at Rs 1,44,00,000/- as against Rs 7,68,32,912/- determined ... appellant is contesting the Ld. AO adopting 10% of the interest free loan availed by the appellant from its holding/sister companies to be the annual value of the house property instead of the rent actually received by it. For the Financial Year 2017-18 the NDMC (The New Delhi Municipal

M/S Bhushan Power and Steel Ltd., Chandigarh vs. DCIT/ACIT (Cen.)-1, Chandigarh

In the result, the appeal of the assessee is dismissed

ITA 355/CHANDI/2022[2019-20]Status: DisposedITAT Chandigarh05 Jun 2024AY 2019-20

Bench: Shri A.D. Jain & Shri Krinwant Sahay

For Appellant: NoneFor Respondent: Smt. Amanpreet Kaur, Sr.DR
Section 143(1)Section 143(1)(a)Section 2(24)(x)Section 36(1)(va)Section 43B

which deduction exceeds specified statutory limit. For example, section 24(a) provides for a standard deduction for a sum equal to 30% of the annual value, but the assessee has claimed deduction at 40%. These situations warrant an adjustment. It is obvious that none of the three clauses of Explanation

Novartis India Ltd, Mumbai vs. Asst CIT 7(1), Mumbai

ITA 2308/MUM/2012[2003-04]Status: DisposedITAT Mumbai28 May 2024AY 2003-04

Bench: Pavan Kumar Gadale & Shri Girish Agrawal

Section 37(1)Section 41(3)Section 80H

notional value. (b) The CIT(A) further erred in not considering the Municipal Rateable Value for the purpose of arriving at the annual value of the property. (c) Without prejudice to above and in any event, as the amount recovered towards Municipal taxes, water charges ... amount to be considered for the purpose of annual value of the property cannot exceed the said amount. (d) Without prejudice, the CIT(A) erred in upholding the action of the AO in adopting the notional rental rate per square feet without furnishing any evidence to the appellants. (e) Without

ACIT Cir 7(1), Mumbai vs. Novartis India ( Formelry Known As Hindustan Ciba Giegy Ltd), Mumbai

In the result, (i) the appeal filed by the assessee is partly allowed for statistical purpose (ii) the appeal filed by the revenue is dismissed and (iii) the Cross Objections filed by the assessee ...

ITA 2188/MUM/2012[2003-04]Status: DisposedITAT Mumbai28 May 2024AY 2003-04

Bench: Pavan Kumar Gadale & Shri Girish Agrawal & Co 76/Mum/2013 (A.Y 2003-04) Novartis India Limited Vs. Deputy Commissioner Of Income–Tax–14(1)(1) Inspire Bkc, 7Th Floor, Room No 432, Bandra Kurla Complex, Aaykar Bhawan, Bandra (E) M.K. Marg, Mumbai-400051. Mumbai-400020. Pan/Gir No. Aaach2914F (अपीलाथ"/Appellant) (""यथ"/Respondent) Deputy Commissioner Vs. Novartis India Limited Of Income–Tax–14(1)(1) Inspire Bkc, 7Th Floor, Room No 432, Bandra Kurla Complex, Aaykar Bhawan, Bandra (E) M.K. Marg, Mumbai-400051 Mumbai-400020 Pan/Gir No. Aaach2914F (अपीलाथ"/Appellant (""यथ"/Respondent)

Section 37(1)Section 41(3)Section 80H

notional value. (b) The CIT(A) further erred in not considering the Municipal Rateable Value for the purpose of arriving at the annual value of the property. (c) Without prejudice to above and in any event, as the amount recovered towards Municipal taxes, water charges ... amount to be considered for the purpose of annual value of the property cannot exceed the said amount. 4 ITA. No. 2308&2188/Mum/2012 &C.O.76/Mum/2013(A.Y.: 2003-04) Novartis India Limited, Mumbai (d) Without prejudice, the CIT(A) erred in upholding the action of the AO in adopting the notional rental

M/S Active Securities Limited, New Delhi vs. ITO, New Delhi

The appeals are allowed

ITA 2335/DEL/2016[2012-13]Status: DisposedITAT Delhi27 May 2024AY 2012-13

Bench: Shri G.S. Pannu, Hon’Ble & Shri Anubhav Sharma

For Appellant: Shri Puneet Agarwal, AdvFor Respondent: Shri Kanv Bali, Sr. DR
Section 143(3)Section 143(3)(ii)Section 24

renting out a complex commercial structure. 10.4 Attention was invited to the provisions of section 22 of the Act which provides that the annual value of any building or land appurtenant thereto, other than the portion of such building/land occupied by the assessee for the purposes of the business would ... assets. 21. Section 22 of Income-Tax Act deals with income from house property and it reads thus: "22. Income from house property.--The annual value of property consisting of any buildings or lands appurtenant thereto of which the assessee is the owner, other than such portions of such property

ACIT 2(2)(1), Mumbai vs. Nrb Bearings Limited, Mumbai

Accordingly, we confirm the order of the learned CIT (A) and dismissed ground no

ITA 4469/MUM/2023[AY 2014-15]Status: DisposedITAT Mumbai14 May 2024

Bench: Shri Prashant Maharishi, Am & Shri Sandeep Singh Karhail, Jm Acit Room No.545, 5Th Floor, Nrb Bearings Limited Aaykar Bhavan 15, Dhannur Mumbai, M.K. Road, Vs. G.P.O. Mumbai-400 001 Mumbai-400 020 (Appellant) (Respondent) Pan No. Aaacn3479P Assessee By : None : Shri Anil Sant-Addl.Cit Dr Revenue By Date Of Hearing: 06.05.2024 Date Of Pronouncement : 14.05.2024

For Appellant: None
Section 143(2)Section 143(3)

assessee has relied upon several judicial precedents. The learned Assessing Officer held that according to the provision of Section 23 of the Act, the annual value of the property is to be determined. According to him, the flat given on rent to Deutsche Bank is deriving the monthly rent ... only because of the security deposit. Therefore, he held that fair market rent of the flat is ₹3,12,500/-. Accordingly, he took the annual value of the flat at rent of ₹3,12,500/- per month. Accordingly, the difference of ₹13,21,000/- was added to the income