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TMI Blog2018 (9) TMI 1687X X X X Extracts X X X X X X X X Extracts X X X X ..... on, though subject to the condition that the same is not put under self occupation of the assessee and is held for the purpose of letting out of the same, would continue to be determined u/s 23(1)(c). Assessee in the present case had rightly determined the ‘annual value’ of the property at Nil by taking recourse to Sec. 23(1)(c) of the ‘Act’. As in the case of the present assessee the property under consideration had remained let out for a period of 36 months, and thereafter though could not be let out and had remained vacant during whole of the year under consideration, but had never remained under the self occupation of the assessee, thus, no infirmity emerges from the computation of the ‘annual value’ of the said property under Sec. 23(1)(c) of the ‘Act’ by the assessee. - decided in favour of assessee. - ITA No. 2892 /Mum/2016 And ITA No. 66/Mum/2017 - - - Dated:- 19-9-2018 - Shri G. Manjunatha, Accountant Member And Shri Ravish Sood, Judicial Member For The Appellant : Shri. J.P Bairagra For The Respondent : Shri Rajat Mittal ORDER PER RAVISH SOOD, JM The present appeals filed by the assessee for A.Y 2011-12 and A.Y 2012-13 are directed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e A.O that the assessee, vide agreement dated April, 2007 had let out Unit No. 401 425 of project Balaji Bhavan to M/s Sterling Construction P. Ltd. for a period of 36 months, and had offered the rental income received therefrom as its Income from house property in the preceding years. However, it was also noticed by the A.O, that after the expiry of the license period the licensee had vacated the property and conveyed its intention of not getting the license agreement renewed any further. The assessee in order to drive home its contention that the annual value of the property was to be taken at Nil, submitted that its case was covered by Sec. 23(1)(c) of the Act. However, the A.O after deliberating on the contentions advanced by the assessee did not find favour with the same. The A.O was of the view that as per Sec. 23(1)(a) of the Act, the sum for which the property might reasonably be expected to be let from year to year was to be taken as the deemed annual value of the property under Sec. 22 of the Act. Further, the A.O held a conviction that the provisions of Sec. 23(1)(c) could be pressed into service only when the property is actually let and had remained vacant for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e a property was vacant during the whole year. The ld. A.R taking support of the aforesaid order submitted that the word let and vacant are mutually exclusive terms, and a situation cannot exist where the property is let during the year and is also simultaneously vacant for the whole year. It was the contention of the ld. A.R that the lower authorities had failed to appreciate that the aforesaid statutory provision was to be viewed with regard to the intention, together with the efforts put by the assessee in letting out the property, and the gross annual value of the property was to be determined only after considering the said factors. The ld. A.R in order to buttress his aforesaid contention took support of sub-section (3) of Sec. 23 of the Act. It was submitted by the ld. A.R that the usage of the term house is actually let in sub-section (3) of Sec. 23, unlike the expression property is let used in Sec. 23(1)(c), clearly revealed that as and where the legislature had required actual letting of the property, there had been a conscious, purposive and intentional usage of the term actually , which however was absent in Sec. 23(1)(c). On the basis of his aforesaid conte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ensee had vacated the property and conveyed its intention of not getting the license agreement renewed any further. We further find from a perusal of the records before us that it is not the case of the department that after the property was vacated, the same thereafter had remained under the self occupation of the assessee. In light of the aforesaid factual position in the case of the present assessee, we find ourselves to be in agreement with the submissions of the Ld. A.R. that the issue raised before us is squarely covered by the orders of the coordinate benches of the Tribunal in the case of viz. (i). Vikas Keshav Garud Vs. ITO, Ward 1(2), Nashik (2016) 160 ITD 7 (Pune) (ii). ACIT, Circle-47(1), New Delhi Vs. Dr. Prabha Sanghi (2012) 139 ITD 504 (Del); (iii). Premsudha Exports (P) Ltd. Vs. ACIT, Central Circle 10, Mumbai (2008) 110 ITD 158 (Mum); and (iv). Informed Technologies India Ltd. Vs. DCIT- 3(2), Mumbai (2017) 162 ITD 153 (Mum). We find that in the case of Informed technologies India Ltd. (supra) the Tribunal after deliberating at length on the issue as regards the scope and gamut of Sec. 23(1)(c) of the Act, had observed as under : 7.1 We have considered the ri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e property actually let out . In our opinion, it talks of properties which are held to letting out having intention to let out in the relevant year coupled with efforts made for letting it out. If these conditions are satisfied, it has to be held that property is let and the same will fall within the purview of this clause. We find ourselves to be in agreement with the aforesaid observations of the coordinate bench of the Tribunal, which analyzing the scope and gamut of Sec. 23(1)(c) of the Act , had therein concluded that in light of the words Property is let used in clause (c) of Sec. 23(1) of the Act , unlike the term house is actually let as stands gathered from a conjoint reading of sub-section (2) to (4) of Sec. 23, it can safely and inescapably be gathered that the conscious, purposive and intentional usage of the aforesaid term Property is let in Sec. 23(1)(c) of the Act , cannot be substituted by the term house is actually let as used by the legislature in all its wisdom in sub-section (3) of Sec. 23. Thus it can safely be concluded that the requirement house is actually let during the year is not a prerequisite for bringing the case of an assessee wit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case of the present assessee the property under consideration had remained let out upto 04.12.2008, and thereafter though could not be let out and had remained vacant during whole of the year under consideration, but also had never remained under the self occupation of the assessee, the computation of the ALV u/s 23(1)(c) of the Act , had rightly been carried out in light of the aforesaid judgment of the Hon ble High Court. 7.2 That in light of our aforesaid observations the Ground of appeal No. 2 of the assessee is allowed and the addition of ₹ 8,40,000/- made by the A.O and as such sustained by the CIT(A) is herein vacated. We find ourselves to be in agreement with the aforesaid observations of the coordinate bench of the Tribunal, which we find, had while analyzing the scope and gamut of Sec. 23(1)(c) of the Act , concluded that in light of the words Property is let used in clause (c) of Sec. 23(1) of the Act , unlike the term house is actually let as stands gathered from a conjoint reading of sub-section (2) to (4) of Sec. 23, it can safely and rather inescapably be gathered that the conscious, purposive and intentional usage of the aforesaid term Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ara 14 15 had observed that though the benefit of computing the ALV u/s 23(1)(c) could not be extended to a case where the property was not let out at all, however the same would duly encompass and take within its sweep cases where the property had remained let out for two or more years, but had remained vacant for the whole of the previous year. Thus, we are of the considered view that now when in the case of the present assessee the property under consideration had remained let out for a period of 36 months, and thereafter though could not be let out and had remained vacant during whole of the year under consideration, but had never remained under the self occupation of the assessee, thus, no infirmity emerges from the computation of the annual value of the said property under Sec. 23(1)(c) of the Act by the assessee. 9. That in light of our aforesaid observations the Ground of appeal No. 1 and 2 of the assessee are allowed and the determination of the annual value of the property under consideration viz. Unit No. 401 425 of project Balaji Bhavan at ₹ 81,99,360/- by the A.O by taking recourse to Sec. 23(1)(a), which thereafter was sustained by the CIT(A), i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ved. The A.O found the aforesaid claim of the assessee as factually correct. It was observed by the A.O that though the assessee had let out Unit No. 401 425 of project Balaji Bhavan to M/s Sterling Construction P. Ltd. for 36 months, vide agreement dated April, 2007 and had offered the rental income received therefrom as its Income from house property in the preceding years, but after the expiry of the license period of 36 months the licensee had vacated the property and conveyed its intention of not getting the license agreement renewed any further. The assessee in order to drive home its contention that the annual value of the property was to be taken at Nil, submitted that its case was covered by Sec. 23(1)(c) of the Act. However, the A.O after deliberating on the contentions advanced by the assessee did not find favour with the same. The A.O was of the view that as per Sec. 23(1)(a) of the Act, the sum for which the property might reasonably be expected to be let from year to year was to be taken as the deemed annual value of the property under Sec. 22 of the Act. Further, the A.O held a conviction that the provisions of Sec. 23(1)(c) could be pressed into service only ..... X X X X Extracts X X X X X X X X Extracts X X X X
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