2021 (2) TMI 62 - AT - Income Tax

Income from house property - Annual Letting Value of the property situated at Anna Salai, Chennai - assessee company was having the vacant property at Anna Salai and ALV of the property was assessed @ 6% of capital value of the house property - HELD THAT - Actually, the premises in question was on rent earlier with the HDFC Bank. Under the compelled circumstances, the tenant HDFC Bank vacated the premises because the Metro Rail Project came before the premises, therefore, the said premise was vacated by Bank. On similar circumstances, the Hon ble ITAT has already explained the reason in which the rental value of the premises was not liable to be assessed on the percentage basis of the value of the property. Accordingly, it is quite clear that the case of the assessee has duly been covered by the Hon ble ITAT in the assesse s own case 2019 (11) TMI 983 - ITAT MUMBAI therefore, we set aside the finding of the CIT(A) on these issues and allowed the claim of the assessee.

Summary

Issues:
1. Challenge to the computation of Annual Letting Value of property at Anna Salai, Chennai.

Analysis:

Issue 1:
The assessee contested the computation of Annual Letting Value (ALV) of a property at Anna Salai, Chennai at ?11,37,878. The assessee argued that the issue was previously addressed by the Hon'ble ITAT in a similar case, Empire Capital Pvt. Ltd. Vs. ACIT, where it was determined that certain conditions must be met for the provisions of section 23(1)(c) of the Income Tax Act to apply. These conditions include the property being let out in the past, being vacant during the relevant year, and the actual rent being less than the deemed rent. The ITAT found that since the property was previously let out and was vacant during the assessment year, no actual rent was received. The ITAT also noted that the assessee had offered rental income in previous years and had made efforts to let out the property. Therefore, the ITAT allowed the appeal, setting aside the CIT(A)'s decision and ruling in favor of the assessee.

Conclusion:
The ITAT ruled in favor of the assessee, citing the previous decision in a similar case and finding that the property being vacant due to external circumstances justified the claim that the ALV should be considered as nil. The appeal was allowed, and the CIT(A)'s decision was set aside.

This detailed analysis covers the key legal points and findings of the judgment regarding the computation of Annual Letting Value of the property at Anna Salai, Chennai.