V3S Infratech Ltd., New Delhi V. ACIT, New Delhi

ITA 3644/DEL/2016

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0961 (ITAT-DELHI)
• Duration Of Justice: 5 year(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 08-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2011-2012
• Appeal Filed On: 20-06-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH B, NEW DELHI BEFORE SH. N. K. BILLAIYA, ACCOUNTANT MEMBER AND SH. AMIT SHUKLA, JUDICIAL MEMBER (THROUGH VIDEO CONFERENCING) ITA NO.3644/DEL/2016 ASSESSMENT YEAR: 2011-12 V3S INFRATECH LTD. A-20, NARAINA INDUSTRIAL AREA, PHASE-I, NARAINA, NEW DELHI -110028 PAN NO. AABCG9474A VS ACIT CENTRAL CIRCLE -32 NEW DELHI (APPELLANT) (RESPONDENT) APPELLANT BY SH. SANJAY KUMAR, CA RESPONDENT BY SH. MAHESH THAKUR, SR. DR DATE OF HEARING: 08/07/2021 DATE OF PRONOUNCEMENT: 08/07/2021 ORDER PER N. K. BILLAIYA, AM: THIS APPEAL BY THE ASSESEE IS PREFERRED AGAINST TH E ORDER OF THE CIT(A)-30, NEW DELHI DATED 28.03.2016 PERTAININ G TO A.Y. 2011-12. 2 2. THE GRIEVANCE OF THE ASSESEE READ AS UNDER :- 1. THAT THE CIT(A) HAS ERRED IN LAW AND ON FACTS IN HOLDING THAT THERE IS NO PROVISION UNDER THE ACT, W HERE CLAIM OF UNREALIZED RENT CAN BE ALLOWED AS DEDUCTIO N IN THE A.Y.2011-12. 3. BRIEFLY STATED THAT THE FACTS OF THE CASE ARE THAT DURING THE COURSE OF SCRUTINY ASSESSMENT PROCEEDINGS THE A O NOTICED THAT AS PER COMPUTATION OF INCOME AGAINST INCOME FR OM HOUSE PROPERTY THE ASSESSEE CLAIMED RS.1,71,51,481/- AS D EDUCTION AGAINST UNREALIZED RENT. THE ASSESSEE WAS ASKED TO EXPLAIN AS TO WHY DISALLOWANCE SHOULD NOT BE MADE AGAINST INCO ME FROM HOUSE PROPERTY AS IT PERTAINS TO EARLIER YEARS. 4. VIDE LETTER DATED 07.01.2014 ASSESSEE EXPLAINED THE PROVISIONS RELATING TO THE CLAIM OF UNREALIZED RENT AS DEDUCTION. THE CONTENTION OF THE ASSESSEE DID NOT FIND FAVOUR WITH THE AO WHO DISALLOWED THE CLAIM OF DEDUCTION O F UNREALIZED RENT AND MADE ADDITION OF RS.17151481/-. 5. ASSESSEE CARRIED THE MATTER BEFORE THE CIT(A) BU T WITHOUT ANY SUCCESS. 6. BEFORE US THE COUNSEL FOR THE ASSESSEE REFERRING TO THE PROVISIONS OF SECTION 23 STATED THAT SINCE THE RENT S WERE INCLUDED 3 IN THE TAXABLE INCOME IN EARLIER ASSESSMENT YEARS A ND SINCE DURING THE YEAR UNDER CONSIDERATION THE TENANTS VAC ATED THE PROPERTY WITHOUT PAYING THE RENT, THEREFORE, THE AS SESSEE HAS RIGHTLY CLAIMED THE DEDUCTION OF UNRELIAZED RENT. THE COUNSEL DREW OUR ATTENTION TO THE RELEVANT DOCUMENTARY EVID ENCES IN THE PAPER BOOK. 7. PER CONTRA THE DR STRONGLY SUPPORTED THE FINDING S OF THE AO. 8. WE HAVE GIVEN A THOUGHTFUL CONSIDERATION TO THE ORDERS OF THE AUTHORITIES BELOW. THE UNDISPUTED FACT IS THAT THE ASSESSEE HAS INCLUDED THE ANNUAL LET OUT VALUE OF THE LET OU T PROPERTY IN EARLIER ASSESSMENT YEARS I.E. YEAR ENDING 31.03.200 7, 31.03.2008, 31.03.2009 AND 31.03.2010. THE DETAILS CAN BE UNDE RSTOOD FROM THE FOLLOWING CHART :- 4 5 6 7 8 9 10 9. A PERUSAL OF THE AFOREMENTIONED CHARTS CLEARLY S HOW THAT THE ASSESSEE HAS SHOWN THE ANNUAL LET OUT VALUE ON ACCR UED BASIS IN THE EARLIER ASSESSMENT YEARS. 10. THE PROVISIONS OF SECTION 23 (1) R.W. THE FIRST EXPLANATION WHICH IS :- FOR THE PURPOSES OF CLAUSE B OR CLAUSE C OF THIS SUB SECTION, THE AMOUNT OF ACTUAL RENT RECEIVED OR RECE IVABLE BY THE OWNER WAS NOT INCLUDED, SUBJECT TO SUCH RULES AS MA Y BE MADE IN THIS BEHALF THE AMOUNT OF RENT WHICH THE OWNER C ANNOT REALIZED AND THE RELEVANT RULE PRESCRIBED IS RULE 4 OF THE INCOME TAX RULES 1962 WHICH READS AS UNDER :- 11 4. FOR THE PURPOSES OF THE EXPLANATION BELOW SUB- SECTION (1) OF SECTION 23, THE AMOUNT OF RENT WHICH THE OWNER CANNOT REALISE SHALL BE EQUAL TO THE AMOUNT O F RENT PAYABLE BUT NOT PAID BY A TENANT OF THE ASSESSEE AN D SO PROVED TO BE LOST AND IRRECOVERABLE WHERE (A) THE TENANCY IS BONA FIDE; (B) THE DEFAULTING TENANT HAS VACATED, OR STEPS HAVE BEEN TAKEN TO COMPEL HIM TO VACATE THE PROPERTY; (C) THE DEFAULTING TENANT IS NOT IN OCCUPATION OF ANY O THER PROPERTY OF THE ASSESSEE; (D) THE ASSESSEE HAS TAKEN ALL REASONABLE STEPS TO INS TITUTE LEGAL PROCEEDINGS FOR THE RECOVERY OF THE UNPAID RE NT OR SATISFIED THE ASSESSING OFFICER THAT LEGAL PROCEEDI NGS WOULD BE USELESS]. 11. A PERUSAL OF THE RELEVANT PROVISIONS READ WITH AFORESTATED RULES CLEARLY SHOW THAT THE ASSESSEE IS ELIGIBLE FO R THE DEDUCTION OF UNREALIZED RENT. WE, THEREFORE, DIREC T THE AO TO ALLOW DEDUCTION UNREALIZED RENT AS CLAIMED BY THE A SSESSEE. 12. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. 12 13. DECISION ANNOUNCED IN THE OPEN COURT IN THE PR ESENCE OF BOTH THE REPRESENTATIVES ON 08.07.2021. SD/- SD/- (AMIT SHUKLA) (N. K. BILLAIYA) JUDICIAL MEMBER A CCOUNTANT MEMBER *NEHA* DATE:-08.07.2021 COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGI STRAR ITAT NEW DELHI DATE OF DICTATION 0 8 .07.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE DICTATING MEMBER 08.07.2021 DATE ON WHICH THE TYPED DRAFT IS PLACED BEFORE THE OTHER MEMBER 08.07.2021 DATE ON WHICH THE APPROVED DRAFT COMES TO THE SR.PS/PS 08.07.2021 DATE ON WHICH THE FAIR ORDER IS PLACED BEFORE THE DICTATING MEMBER FOR PRONOUNCEMENT 08.07.2021 DATE ON WHICH THE FAIR ORDER COMES BACK TO THE SR. PS/ PS 08.07.2021 DATE ON WHICH THE FINAL ORDER IS UPLOADED ON THE WEBSITE OF ITAT 08.07.2021 DATE ON WHICH THE FILE GOES TO THE BENCH CLERK DATE ON WHICH FILE GOES TO THE HEAD CLERK. THE DATE ON WHICH FILE GOES TO THE ASSISTANT REGISTRAR FOR SIGNATURE ON THE ORDER DATE OF DISPATCH OF THE ORDER 13