Property not let out during Assessing Year is not applicable for provision u/s 23(1)(c): ITAT [Read Order]

While considering a bunch of appeals, the Pune bench of Income Tax Appellate Tribunal (ITAT) has held that property which was not let out during the assessing year is not applicable u/s 23(1)(c) of the Income Tax Act,1961.

The assessee is a shareholder of the building, known as Bodhi Towers, which belongs to Blackpool Realty Pvt. Ltd and each shareholder have the right to certain floors of the building. The assessee appointed a broker to find a suitable tenant for which the broker could not find a suitable tenant.

 The assessee disclosed the fact and did not offer any notional income from house property and the return was accepted u/s 143(3) of the Income Tax Act. The Assessing Officer (AO) dismissed the claim of the assessee to determine the Annual lettable Value (ALV) u/s23(1)(C) of the Act at Nil and determined the ALV as per section 23(1)(a) of the Act. The assessee claimed that he had made efforts to find a tenant, therefore, as section 23(1)(C) of the Act, the deemed rent will be Nil.

The Tribunal observed that the property was vacant during the year and was never let out during the year or a year earlier to that.  The Tribunal observed that Section 23(1)(c) will not be applicable if the property was vacant and was not let out at all.

Shri S S Godara, JM and Dr Dipak P Ripote AM viewed that while determining the annual letting value in respect of properties which are subject to rent control legislation and the Assessing Officer shall determine with the relevant rent control legislation and the issue was set aside to the file of the Assessing Officer for verifications. The appeal filed by the assessee was allowed for statistical purposes.

 Shri CH Naniwadekar appeared for the assessee and Shri S P Walimbe appeared for the revenue.

To Read the full text of the Order CLICK HERE

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