Sh. Alok Yadav, Delhi V. ACIT, New Delhi

ITA 3483/DEL/2015

• Counselvise Citation: [2017] 128 COUNSELVISE.COM (IT) 3552 (ITAT-DELHI)
• Duration Of Justice: 1 year(s) 10 month(s) 19 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-04-2017
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Next Hearing Date: 03-04-2017
• Assessment Year: 2011-2012
• Appeal Filed On: 01-06-2015
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: BEDOBANI CHAUDHARI
• Assessee Lawyers: SHYAM MOHAN

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: SMC NEW DELHI BEFORE SH. BHAVNESH SAINI, JUDICIAL MEMBER I.T.A .NO.-3483/DEL/2015 (ASSESSMENT YEAR-2011-12) ALOK YADAV, PU-5, PITAMPURA, DELHI. PAN-AAPPY6589D. ( APPELLANT) VS ACIT, CIRCLE-19(1), E-2, BLOCK, CIVIC CENTRE, NEW DELHI (RESPONDENT) ASSESSEE BY SH.SHYAM MOHAN, ADV. REVENUE BY MS. BEDOBANI CHAUDHARI, SR.DR DATE OF HEARING 03.04.2017 DATE OF PRONOUNCEMENT 20.04.2017 ORDER PER BHAVNESH SAINI, JUDICIAL MEMBER THIS APPEAL BY THE ASSESSEE HAS BEEN DIRECTED AGAIN ST THE ORDER OF CIT(A)-13, NEW DELHI DATED 20.03.2015 FOR A.Y. 2011 -12, CHALLENGING THE ADDITION OF RS.2,25,000/- (ACTUAL RS.2,52,000/-). 2. I HAVE HEARD THE LD. REPRESENTATIVES OF BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE AO OBSERVE T HAT THE ASSESSEE HAS NOT DECLARED RENT FOR GODOWN NO.3 AT SAMAYPUR, DELH I WHICH WAS LYING VACANT. APPLYING SECTION 23(1) OF THE ACT, THE AO COMPUTING THE ANNUAL LETTING VALUE FOR THE PROPERTY AT RS.3,60,000/- AND AFTER GIVING DEDUCTION U/S 24(1), THE BALANCE AMOUNT OF RS.2,52,000/- IS A DDED. IT WAS EXPLAINED THAT IN A.Y. 2010-11 ASSESSEE EARNED REN T OF RS.2,52,000/- AND IN A.Y. 2011-12, IN APPEAL, THE ASSESSEE HAS EA RNED/RECEIVED RS.31,200/- AS RENT FROM THE GODOWN NO.3 AT SAMAY PUR, DELHI FOR THE PAGE 2 OF 4 PERIOD OF ONE MONTH AND SOME DAYS DURING WHICH THE SAME WAS LET OUT AND OCCUPIED BY THE TENANT. THEREAFTER, THE TENANT VACATED THE AFORESAID GODOWN OF THE ASSESSEE AND IT WAS LYING VACANT FOR THE REMAINING PERIOD. THE ASSESSEE TRIED HIS BEST TO LET OUT THE GODOWN B UT UNFORTUNATELY HE WAS NOT ABLE O LET IT OUT. THE AO MADE ADDITION ON ACCOUNT OF HYPOTHETICAL INCOME IN THE HANDS OF THE ASSESSEE. THE AO HAD NOT APPLIED SECTION 23(1)(C) OF THE ACT BECAUSE DURING THE VACANCY PERIOD, NO RENT COULD BE CHARGED. THE LD.CIT(A) HOWEVER, DISM ISS THE APPEAL OF THE ASSESSEE HOLDING THAT THE ANNUAL RENTAL VALUE WAS C OMPUTED ON THE BASIS OF RENT RECEIVED IN PRECEDING A.Y. 2010-11. 3. THE COUNSEL FOR THE ASSESSEE REITERATED THE SUBM ISSIONS MADE BEFORE THE AUTHORITIES BELOW. HE HAS RELIED UPON THE ORDE R OF THE ITAT, DELHI BENCH IN THE CASE OF ACIT VS DR. PRABHA SANGHI IN ITA NO.2217/DEL/2010 DATED 18.09.2012 IN WHICH IN PARA 17 HELD AS UNDER:- 17. UNDOUBTEDLY, IT WAS TO CURE THE INEQUITY OF TA XING VACANT PROPERTIES UNDER A NOTIONAL CHARGE, THAT SECTION 2 3(1)(C) WAS BROUGHT ON THE STATUTE BOOK BY VIRTUE OF THE FINANCE ACT OF 2001 W.E.F. 01.04.2002, AS RIGHTLY CONTENDED ON BEHALF OF THE A SSESSEE, IN ORDER TO PROVIDE SIMPLIFIED DETERMINATION OF ANNUAL VALUE OF PROPERTY ON ALLOWING DEDUCTIONS IN COMPUTING THE ALV ITSELF ON ACCOUNT OF VACANCY AND UNREALIZED RENT. 3.1. HE HAS ALSO RELIED UPON THE ORDER OF THE ITAT, BANGLORE BENCH IN THE CASE OF DR.A.C.SREERAM VS. ADDITIONAL CIT IN ITA NO.1089/BANG/2010 DATED 21.03.2012 IN PARA 11.1 HELD AS UNDER:- PAGE 3 OF 4 11.1. IN OUR OPINION THE AFORESAID REFERRED TO CAS E IS ON THE SAME FACTS, SO RESPECTFULLY FOLLOWING THE DECISION OF TH E CO-ORDINATE BENCH IN THE CASE OF PREMSUDHA EXPORTS (P) LTD., VS ACIT, C.C.-10, MUMBAI (SUPRA), WE ARE OF THE VIEW THAT SINCE THE RENT REC EIVED OR RECEIVABLE FROM THE PROPERTY IN QUESTION DURING THE YEAR WAS N IL, THE SAME WAS TO BE TAKEN AS THE ANNUAL VALUE OF THE PROPERTY IN ORDER TO COMPUTE THE INCOME FROM HOUSE PROPERTY AS PROVIDED IN SECTI ON 23(1)(C) OF THE ACT. WE, THEREFORE, SET ASIDE THE ORDER OF THE LEA RNED CIT(A) AND THE GROUNDS OF APPEAL NOS.5, 6 & 7 RAISED BY THE ASSESS EE ARE ALLOWED. 3.2. HE HAS ALSO RELIED UPON THE ORDER OF THE ITAT, PUNE BENCH IN THE CASE OF VIKAS KESHAV GARUD VS ITO IN ITA NO.747/PN/2014 DATED 31.03.2016 IN WHICH IT WAS HELD AS UNDER:- ..THEREFORE, IN THE TOTALITY OF THE CIRCUMSTANCE S AND HAVING REGARD TO THE PROVISIONS OF THE ACT, WE ARE OF THE VIEW THAT THE ALV OF THE PROPERTY AT DANDE TOWERS WHICH REMAINED VACANT FOR THE WHOLE YEAR HAS TO BE ASSIGNED NIL VALUE IN TERMS OF SECTI ON 23(1)(C) OF THE ACT. ACCORDINGLY, THE ORDER OF THE CIT(A) STANDS M ODIFIED TO THIS EXTENT. GROUND NO.1 IS THUS PARTLY ALLOWED. 3.3. ON THE OTHER HAND, LD.DR RELIED UPON THE ORDER S OF THE AUTHORITIES BELOW. 4. CONSIDERING THE FACTS OF THE CASE IN THE LIGHT O F THE ABOVE DECISIONS, IT IS CLEAR THAT DESPITE MAKING BEST EFFORTS, THE A SSESSEE COULD NOT LET OUT THE GODOWN IN QUESTION FOR THE REMAINING PERIOD AND AS SUCH IT WAS LYING VACANT. THE AUTHORITIES BELOW, THEREFORE, SHOULD H AVE EXTENDED BENEFIT OF SECTION 23(1)(C) OF THE ACT TO THE ASSESSEE. THE I SSUE IS COVERED BY THE ABOVE DECISIONS OF THE APPELLATE TRIBUNAL IN THE CA SES OF DR.PRABHA SANGHI, DR.A.C.SREERAM AND VIKAS KESHAV GARUD (SUPR A) PAGE 4 OF 4 5. IN VIEW OF THE ABOVE, I SET ASIDE THE ORDERS OF THE AUTHORITIES BELOW AND DELETE THE ADDITION. 6. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS ALL OWED. THE ORDER IS PRONOUNCED IN THE OPEN COURT. SD/- (BHAVN ESH SAINI) JUDICIAL MEMBER DATE:- 20 TH APRIL, 2017 *AMIT KUMAR* COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT R EGISTRAR ITAT NEW DELHI