Asha Burman Vs ACIT (ITAT Delhi)
AO Directed to Compute ALV Only for Let-Out Portion, Not Entire Self-Occupied Property- ITAT Delhi Remands
Assessee, an elderly individual residing at New Delhi, challenged the determination of Annual Letting Value (ALV) of her house property. AO had assessed the entire property’s ALV at ₹1.79 crore, holding that the whole premises were let out to M/s Gyan Enterprises Pvt. Ltd., a related concern, instead of only the third floor as claimed. The addition was based on the absence of separate electricity and water meters and on comparison with another nearby property at higher rent.
In the first round, ITAT (order dated 14.08.2019) remitted the case to AO to physically verify whether only part of the building was let out. However, in the second round, the AO again assumed the entire property was rented out, without sharing the caretaker’s statement or inspection report, and repeated the same addition.
Tribunal examined the caretaker’s statement produced during hearing, where he clearly confirmed that Assessee occupied the first & second floors, while only the third and fourth floors were rented to the tenant. The ITAT held that this statement conclusively proved partial letting and that taxing ALV for the whole building was unjustified.
