(1) The sole dispute, in the instant case, was regarding
the interpretation of the words ‘property is let’ in clause (c) of S. 23(1).
For this, it is to be determined as to whether actual letting out is a must
for a property to fall within the purview of clause (c) of S. 23(1).
(2) From a reading of the provisions of sub-section (3) of
S. 23, it appears that the Legislatures in their wisdom have used the words
‘house is actually let’. This shows that the words ‘property is let’ cannot
mean actual letting out of the property, because, had it been so, there was be
no need to use the word ‘actually’ in sub-section (3) of S. 23.
(3) If the property is held by the owner for letting out
and efforts are made to let it out, that property is covered by clause (c) and
this requirement has to be satisfied in each year that the property was being
held to let out, but remained vacant for whole or part of the year.
(4) In the instant case, the assessee-company was entitled
to purchase the property for its let out and to earn rental income. Copy of
resolution of the board of directors was also placed on record, wherefrom it
was evident that one of the directors was authorised to take necessary steps
to let out the property in question. The assessee had also fixed the monthly
rent and the security deposit of the property. Consequent to the resolution,
the assessee had approached various estate and finance consultants for letting
out the property and the request was also duly acknowledged by those
consultants. Unfortunately, during the year under appeal, the assessee could
not get a suitable tenant on account of hefty rent and security deposit. Thus,
during the whole year, the assessee made continuous efforts to let out the
property and, under these circumstances, this property could be called as to
be let out property in terms of observations made above. Since the property
had been held to be let out property, its annual letting value could only be
worked out as per clause (c) of S. 23(1) and, since the rent received or
receivable from the said property during the year was nil, the same was to be
taken as the annual value of the property in order to compute the income from
house property.
