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TMI Blog2012 (8) TMI 359X X X X Extracts X X X X X X X X Extracts X X X X ..... s for letting the properties but unfortunately during the year under appeal, the assessee could not get a suitable tenant. Since the property was held to be let, its annual letting value could only be worked out under sub-clause ( c ) of section 23(1)and according to this clause, the rent received or receivable during the year was nil and that had to be taken as the annual value of the property in order to compute the income from house property - the decision rendered by the learned CIT(A) need not be interfered with even if there is a finding with respect to completion of 2nd floor to 9th floor of the building - in favour of assessee. - ITA No.1526/Ahd/2011 - - - Dated:- 15-6-2012 - SHRI G. C. GUPTA, AND A. MOHAN ALANKAMONY, JJ. App ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... efore the ITAT. The ITAT set aside the issue to the file of the learned AO with direction to determine the annual letting value of the entire property. Accordingly, the learned AO required the assessee to furnish details of Municipal Tax Bill and Rent Agreement with the tenants of the property. Since the assessee failed to furnish the details, the learned AO issued notice to the tenant u/s 133(6) of the Act and obtained the details of rents and decided the annual letting out value of the assessee. The learned AO also asked the assessee to explain as to why the same should not be adopted for determining the property income of the assessee. In response thereto, the assessee explained that the construction of the building was completed in Janu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the month of October, 2003 (b) All the expenses incurred till 30-09-2003 have been capitalized by the assessee, implying thereby the building for ready to use in the month of October, 2003 and (c) The assessee itself has argued that the rent should be calculated on the date of construction to 31-03-2007 and not for the whole year. This clearly suggests that the entire building was constructed and ready for use. The learned AO also stated in his order that the assessee had not furnished any proof to establish that only ground floor and first floor was ready for occupation and other floors were not ready for use. The learned AO accordingly held that the entire building was ready for use (except 8th floor) in the month of October, 2003 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... perusal of the rent agreement for the first two floors, it is also clear that the same had been let out in the month of January and February, 2004 only. Thus, it is not in accordance with the settled position of law that the actual rent received in respect of floors which were complete and given on rent during the year in dispute should be taken as ALV of the property in question. The A.O. is accordingly directed to adopt the ALV of the property in question at the figure of actual rent. i.e. Rs.28,12,759/- as against the ALV of Rs.87,02,002/- taken by the A. O. and further deduction u/s. 24 (a) be granted with respect to rental income of Rs.28,12,759/- only. This ground of appeal thus stands allowed. 5. Thus, the learned CIT(A) had arri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nnual value where the property is let and the annual rent received or receivable is in excess of the sum referred to in clause (a). The old section 23 (1) did not deal with a situation where the property remained vacant during the whole or any part of the year. In order to remove this anomaly, clause (c ) was inserted and according to clause (c ) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and the actual rent received or receivable by the owner in respect thereof, is less than the sum referred to in clause (a), the amount so received or receivable would be the annual letting value. The words property is let in clause ( c) cannot be interpreted to mean that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f the property because had it been so, there was o need to use the word actually I sub-section (3) of the same section 23. If the property is held by the owner for letting and efforts were made to let it out, that property is covered by clause (c) and this requirement has to be satisfied in each year that the property was being held to be let out but remained vacant for the whole or part of the year. Clause (c) talks of properties which are held with the intention to be let in the relevant year coupled with efforts made for letting them out. If these conditions are satisfied, it has to be held that the property is let and will fall within the purview of this clause. Held accordingly, the assessee-company could hold properly either to us ..... X X X X Extracts X X X X X X X X Extracts X X X X
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