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TMI Blog2011 (12) TMI 228X X X X Extracts X X X X X X X X Extracts X X X X ..... ommissioner of Income Tax (Appeals)-IV, Bangalore. The following grounds have been raised in this appeal : 1. The orders of authorities below in so far as they are against the appellant, are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The authorities below are not justified in assessing the ALV of two properties viz. Flat No.101 and 102, Vastu Apartments, Mumbai and property at Andheri East, Mumbai at ₹ 6,95,555 under the facts and in the circumstances of the appellant s case. They ought to have appreciated that the aforesaid properties were vacant during the year and therefore the assessment of ALV from the said properties was opposed to law and consequent addition made to the income returned requires to be deleted. 3. Without prejudice to the right to seek waiver with the Hon ble CCIT/DG, the appellant denies herself liable to be charged to interest under section 234B and 234C of the Act, which under the facts and in the circumstances of the appellant s case and the levy deserves to be cancelled. 4. For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... house property would be taxed on actual rent received/receivable basis under sections 22 23 of the Act. He, therefore, asked the assessee to explain as to why notional income of the above said assets could not be taken for taxing purpose. In response, the assessee offered explanation which read as under : 1. In respect of flat at Eldorado, it is submitted that the flat was a very old flat and therefore is not in a habitable condition and as such the assessee was unable to let out the flat during the year under reference and subsequent years. Therefore, the ALV attributable to the property is NIL as per section 23(1)(c) of the Act. 2. In respect of Flat Apartment NO.101 and 102, Vastu Apartments, Mumbai, it is submitted that the flat was let out to Hundai Merchant during the assessment year 2006-07 and had fallen vacant during the year. The assessee, despite all her best efforts, could not find a tenant for the flat during the year. Subsequently, it is let out to Tanzeen Printers during the assessment year 2008- 09 for ₹ 11,25,000 per annum. In terms of section 23(1)(c) of the Act, the annual letting value of the property is adopted as NIL. 3. In respect of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e s case since the property remain vacant during the whole of the year as such the ALV was NIL. Reliance was placed on the decision of the ITAT B Bench of Lucknow in the case of Smt. Indu Chandra Vs. DCIT (ITA No.96(LKW)/2011 Dt.29.4.2011) for the Assessment Year 2004-05 and copy of the order was furnished. 7. In her rival submission, the learned Departmental Representative supported the order of the learned CIT(A) and further submitted that the deeming provisions contained in section 23(1)(a) of the Act were applicable and accordingly ALV was required to be worked out in the assessee s case. Therefore, the learned CIT(A) was fully justified in sustaining the addition made by the Assessing Officer. 8. We have considered the submission of both the parties and carefully gone through the material available on record. In the present case, it is not in dispute that the properties in question were earlier let out but remained vacant and could not be let out for the year under consideration since those were inhabitable. A similar issue has been adjudicated by the ITAT, Lucknow Bench B in the case of Smt. Indu Chandra Vs. DCIT (supra). In the said case, one of us (AM) is the sign ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nd not of any earlier period and if that be so, the contention of the revenue was not acceptable. [Para 13] Now the question arose as to what would be the correct and workable interpretation of the words 'property is let' in clause (c) of section 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 section 23(1). [Para 15] From a reading of the provisions of sub-section (3) of section 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 subsection (3) of section 23. Regarding the scope of referring to actual letting out in preceding period, there was no force in the contention of the revenue, as the Legislature has used the present tense. Even if it is interpreted so, it may lead to undesirable result because in some cases, if the owner has let out a property for one month or for even one day, that property would acquire the status of 'let o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... had been held to be let out property, its annual letting value could only be worked out as per clause (c) of section 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. [Para 18] 11.1 In our opinion the aforesaid referred to case is on the same facts, so respectfully following the decision of the co-ordinate Bench in the case of Premsudha Exports (P.) Ltd. vs. ACIT, C.C.-I0,Mumbai (supra), we are of the view that since the rent received or receivable from the property in question 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 as provided in section 23(1)(c) of the Act. We, therefore, set aside the order of the learned CIT(A) and the grounds of appeal Nos.5, 6 7 raised by the assessee are allowed. In the present case, the facts involved are similar to that of Smt. Indu Chandra (supra). So, respectfully following the order of co-ordinate bench B of ITAT, Lucknow in the aforesaid referred to case, we set aside the order passe ..... X X X X Extracts X X X X X X X X Extracts X X X X
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