The Tax Publishers2021 TaxPub(DT) 0684 (Mum-Trib)

INCOME TAX ACT, 1961

Section 23(1)(b)

Where property in question was let out in past, however, under compelled circumstances, the tenant vacated the property and during the relevant year, the same was lying vacant for the entire year for which reasons were given by assessee; the AO was not justified in making addition on account of notional rent and accordingly, such addition was liable to be deleted.

Income from house property - Annual value - Determination of reasonable rent -

Assessee-company was engaged in business of trading in shares and securities and futures and options. It was having a vacant property and ALV of the said property was assessed by AO @6% of capital value of the house property. Assessee contended that the said property was let out in past and during the relevant year, the same was lying vacant for the entire year and hence, no actual rent was received by it. Held: It was found that the premises in question was on rent earlier with a bank. However, under compelled circumstances, the tenant bank vacated the premises because the Metro Rail Project came before the premises. Thus, it was clear that the said property was let out in past and during the relevant year, the same was lying vacant for the entire year and therefore, no actual rent was received by the assessee. Consequently, the assessee did not offer any rental income to tax. Hence, no addition on account of notional rent was warranted and accordingly, the same was deleted.

REFERRED :

FAVOUR : In assessee's favour.

A.Y. : 2015-16



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