JUDGMENT
1. The Income-tax Appellate Tribunal has referred the following questions under Section 256(2) of the Income-tax Act, 1961, for the opinion of this court :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that the Rent Control Act will not apply to the property let out to the directors by the assessee-company ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in estimating the annual letting value of the building at Rs. 6,000 ?"
2. The question for consideration is as to what is the annual letting value of bungalow No. 906 belonging to the assessee-company which was admittedly used in the relevant assessment year by its three directors, namely, M/s. Raja Ram Gupta, Balakrishna Gupta and Ramesh Chandra Gupta, as their residence. The assessee-company disclosed the annual letting value at Rs. 720 only. The Income-tax Officer took the view that the annual letting value disclosed by the assessee-company of the aforesaid building was very low. Considering the rental value of the adjacent building let out to another Government Department, the Income-tax Officer determined the annual letting value at Rs. 6,000. The Income-tax Officer rejected the plea of the assessee that the building in question was governed by the Rent Control Act, and, therefore, it was difficult to eject the tenants. He took the view that the building could not be said to be governed by the Rent Control Act in view of the provisions of the Rent Control Act as the building was given by the assessee-company for the use of its own directors.
3. The assessee appealed to the Appellate Assistant Commissioner who accepted the contention of the assessee-company that the building was governed by the Rent Control Act and it was difficult for the assessee-company to eject the tenants. Therefore, the Appellate Assistant Commissioner accepted the annual letting value as disclosed by the assessee.
4. Thereafter, the Revenue carried the dispute in appeal to the Income-tax Appellate Tribunal which accepted the view taken by the Income-tax Officer. Learned standing counsel for the Revenue has drawn our attention to Section 2(1)(f) of the U. P. Urban Buildings (Regulation of Letting, Rent and Eviction) Act, 1972 (briefly, "the Act"). Section 2, Sub-section (1), enumerates the exemptions. Under clause (f) of Sub-section (1) of Section 2 of the Act, any building built and held by a company solely intended for its own occupation or for the occupation of any of its officers or servants whether on rent or free of rent or as guest house by whatsoever name called for the occupation of the persons having dealings with it in the ordinary course of the business is exempt from the application of the provisions of the Act. Relying on this provision, it is argued by standing counsel that bungalow No. 906 cannot be said to be governed by the provisions of the Rent Control Act. The undisputed facts are that the said bungalow was given for use by the assessee to its directors who used the same as their residence. On these facts, we quite agree with the view taken by the Appellate Tribunal that the bungalow cannot be said to be governed by the provisions of the Act.
5. Then, the question is whether the annual letting value determined by the Income-tax Officer and approved by the Appellate Tribunal is correct ? On this question, purely a finding of fact has been recorded by the Appellate Tribunal. Considering the rental value of the adjacent properties, the Income-tax Officer determined the fair annual letting value of bungalow No. 906 at Rs. 6,000. It is not disputed by the assessee that the rent of the adjacent property was correctly stated by the Income-tax Officer. That being so, no exception can be taken to the fair annual letting value determined at Rs. 6,000.
6. For the above reasons, we answer both the questions in the affirmative, that is, in favour of the Revenue and against the assessee. No order as to costs.