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TMI Blog2015 (3) TMI 1355X X X X Extracts X X X X X X X X Extracts X X X X ..... charged is the notional income because the basis of the charge of income is annual value. See BIMAN BEHARI SHAW SHEBAIT. [ 1967 (7) TMI 29 - CALCUTTA HIGH COURT] It is not necessary that the property has been let out for computing the annual value because what is required under section 23(1)(a) of the Act is a sum for which property might be let out. In case of let out properties section 23(1)(b) of the Act is applicable which talks of annual rent received or receivable. Where the property remains vacant for the whole year, in that case, nil value is to be computed or notional value of rent is to be computed? - As pointed out by the learned CIT (Appeals), section 23(1(c) of the Act clearly stipulate the situation where the property has been let out that being if some property is rented out and the tenants leaves, then section 23(1)(c) of the Act would get activated. But ff the property has never been let out, then the provisions cannot be invoked because section 23(1)(c) of the Act is clearly applicable where the property was let out. Therefore, in our opinion, the learned CIT (Appeals) has rightly interpreted the provisions of section 23(1)(c) of the Act. Clearly, the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... owner of share and the rent was taken at ₹ 1,20,000/-and the assessee's share was taken at ₹ 30,000/-. The rental income was determined at ₹ 82,500/- after allowing statutory deduction. 3. On appeal, it was contended that the Assessing Officer has taken annual value on a very high rate. It was contended that the assessee had purchased these properties and did not let them out and, therefore, the same remained vacant. Therefore, no annual valaue could be determined under section 23(1)(c) of the Act. It was contended that once the property remain vacant then no annual value could be determined for the same. The CIT (Appeals) after examining the submissions discussed the case in detail and confirmed the addition. 4. Before us the submissions made before the learned CIT (Appeals) were reiterated. He further submitted that a different view has been taken in the case of co-owner of the properties, i.e. Shri Manoj Singla and filed copy of that order. He contended that different views cannot be taken in the case of two assesses who were having similar facts. He also submitted that even the Delhi Bench of the Tribunal in the case of Asstt. CIT v. D ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the above property at ₹ 30,000/- for the assessment year 2006-07 and no rental income for AY 2007-08. Accordingly, Assessing Officer's action of adopting rental income or ₹ 30,000/- for AY 2007-08 from the above said property is upheld. Assessing Officer is directed to compute the rental income as per directions given above. 8. It is seen that the CIT(A) has not accepted the contention of the appellant with regard to the claim of NIL notional rent u/s 23(4). In fact the assessee's claim rests on the amended provision u/s 23(l)(c) which reads as under.- 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 owing to such vacancy 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. The reading of the said section shows that the property in question should have been let out and in the eventuality of the same being vacant during the whole or any part of the year the annual value was to be taken lower of as determined u/s 23(l)(a) or (c). The crucial requirement here ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eet Vihar property is commercial property and is not covered by the provisions of section 23(4) of the Act. As far as Bombay flat is concerned, since the assessee has shown rental income in the earlier years, therefore, the income has to be charged. As observed by the learned CIT (Appeals), therefore, it becomes clear that even in the case of Manoj Singla it was never held that if the property was never let out, then no income can be charged. 8. Section 23 which provides for computation of annual value reads as under : 23. Annual value how determined.- (1) For the purposes of section 22, the annual value of any property shall be deemed to be (a) the sum for which the property might reasonably be expected to let from year to year; or (b) where the property or any part of the property is let and the actual rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a), the amount so received or receivable; or (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 owing to such vacancy the actual rent received or receivabl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty was let out. Therefore, in our opinion, the learned CIT (Appeals) has rightly interpreted the provisions of section 23(1)(c) of the Act. Clearly, the property for which notional income has been computed by the Assessing Officer was never let out by the assessee, therefore, section 23(1)(c) of would not be applicable. 12. The learned counsel for assessee had also strongly relied upon the decision of the Delhi Bench of the Tribunal in the case of Dr. Prabha Sanghi (supra). In our opinion, this case is distinguishable on facts. The learned counsel for assessee has strongly relied upon para 10 of this decision, which reads as under : 10. Now, as per Section 23 of the Act, the procedure to be followed for determining the annual value in respect of the two properties, the first step is,- to determine the sum for which the property might reasonably be expected to let from year to year. It is now well settled that it would be the municipal ratable value, or the standard rent as per the local Rent Control Act, whichever is higher. This would be covered under section 23(i)(a). In this case, it would be ₹ 28,620/- for 1-A, Ring Road, Kalokri, New Delhi, and ..... X X X X Extracts X X X X X X X X Extracts X X X X
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