33.
[2019] 101 taxmann.com 45 (Delhi-Trib.) Priyankanki Singh Sood vs. ACIT ITA No.: 6698/Del./2015 A.Y.: 2012-13 Dated: 13th December, 2018
Section 23 – Assessee is entitled to claim
benefit u/s. 23(1)(c) if assessee intended to let out property and took efforts
in letting out of property and the property remained vacant despite such
efforts made by the assessee.
FACTS
In the course
of assessment proceedings, the Assessing Officer (AO) observed that the assessee
owned a property at Madras and that the assesse had not offered any income
under the head `Income from House Property’ in respect of the said house
property at Madras. The AO considered the annual value of the property to be
the sum for which the property might reasonably be expected to be let out and
after allowing standard deduction of 30% as per provisions of section 24(a) of
the Act, he made an addition of Rs. 49,849 under the head income from house
property.
Aggrieved, the assessee preferred an appeal
to the CIT(A) who upheld the action of the AO.
Aggrieved, the assessee preferred an appeal
to the Tribunal,
HELD
The Tribunal
noted that the assessee purchased the said property in 1980 and the same was
continuously let out upto assessment year 2001-02 and thereafter from
assessment year 2002-03, suitable tenant could not be found and hence the
property remained vacant. The Tribunal observed that section 23(1)(c) was
attracted only upon fulfilment of the three conditions cumulatively. Upon cumulative
satisfaction of the three conditions the amount received or receivable shall be
deemed to be the annual value. The three conditions, according to the Tribunal,
are-
– the property or part thereof must be let; and
– it should have been vacant during the whole
or any part of the previous year; and
– owing to such
vacancy the actual rent received or receivable by the owner in respect thereof
should be less than the sum referred to in the clause
Further, the Tribunal also observed that
clause (c) would not apply in situations where the property was not let out at
all during the previous years or even if let out was not vacant during whole or
any part of the previous year.
The Tribunal observed that the property at
Madras which was in dispute remained vacant after assessment year 2002-03 till
date. The Tribunal noted that since the property could not be let out due to
inherent defects and the property remained vacant, the assessee had rightly
applied section 23(1)(c) of the Act. The said property after being vacant also
was not under self-occupation of the assessee. Further, it was not the case of
the revenue that the property was not let out prior to assessment year 2002-03.
Under the circumstances, the Tribunal, following the decision of the co-ordinate
bench in Premsudha Exports (P.) Ltd. vs. ACIT [2008] 110 ITD 158 (Mum.)
held that the assessee was entitled to benefit u/s. 23(1)(c) of the Act. The
appeal filed by the assessee was allowed.
