The Tax Publishers2020 TaxPub(DT) 5360 (Karn-HC)

INCOME TAX ACT, 1961

Section 23

Computation of notional rent in respect of a building which was under construction given to run a school on the ground that the same was completed in part was not justifiable as assessee had admitted the rental income from letting out such building which fact was not appreciated by revenue authorities.

Income from house property - Annual value - Building under construction -

Assessee rented out a part of the building which was under construction to run the school, on contract basis and had failed to declare any rental income. Therefore, AO computed the notional rent on the building in question as the same was completed in part. Held: It was noted in the return of income filed that assessee had admitted the rental income from letting out the school in question. However, this fact was not appreciated and in a cursory manner, revenue authorities had brought the income to tax as the assessee had not been able to produce any evidence to the contrary. The findings recorded by the authorities was based on surmises and conjectures and had to be termed as perverse. Hence, addition made by AO was required to be deleted.

REFERRED :

FAVOUR : In favour of assessee.

A.Y. : 2010-11


INCOME TAX ACT, 1961

Section 28

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