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| The Tax Publishers2019 TaxPub(DT) 7675 (Mum-Trib) : (2020) 181 ITD 0173 INCOME TAX ACT, 1961
Section 23
Where in the past the property owned by the assessee was rented out and assessee offered rental income which has accepted then merely because no the impugned year the property could not be let out no notional rent can be computed and added to total income.
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Income from house property - Annual value - Estimation of rental income - Property remained vacant
The assessee/appellant company was engaged in the business of trading in shares and commodities. The assessee owned a property. In the return of income for the impugned assessment year the assessee did not disclose any rental income from the aforesaid property. During the assessment proceedings the assessee explained that since the property was lying vacant during the relevant period, no rental income was disclosed. The assessing officer estimated rental income of the property at 6% of the capital value and made addition of Rs. 11,37,878 as notional rent. It is an undisputed fact that the property in question was let out in the past, during the period relevant to assessment year under appeal the property was lying vacant for the entire year and hence, no actual rent was received by the assessee. Consequently, the assessee did not offer any rental income to tax. In the given facts, the provisions of section 23(1)(c) of the Act get attracted. Held: The assessee during the Financial Year 2015-16 has purportedly rented out the premises and has offered the rental income to tax. A perusal of the statement of profit and loss account for the year ended 31-3-2016 furnished by the assessee reveal that the assessee has received rental income of Rs. 2,10,000. The assessee has also furnished copy of the assessment Order, dated 18-12-2018 passed under section 143(3) of the Act for assessment year 2016-17. No addition on account of rental income/notional rental income has been made by the assessing officer in the assessment order. Thus, rental income offered to tax has been accepted by the assessing officer. In the past as well the property under question was let out. It was during the period relevant to assessment year under appeal that the property was lying vacant for which reasons were given by the assessee. In the peculiar facts of the case no addition on account of notional rent is warranted.
Applied :.Sachin R. Tandulkar [(2018) 96 taxmann.com 253 (Mum)(Trib) : 2018 TaxPub(DT) 5148 (Mum-Trib)]
REFERRED :
FAVOUR : In assessee's favour
A.Y. : 2014-15
IN THE ITAT, MUMBAI BENCH
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