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TMI Blog2020 (4) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... the option agreement and, because of covenent by way of an option agreement with the party and hence, any amount received in pursuance of said agreement is in the nature of compensation which is assessable under the head income from other sources as rightly considered by the assessee. AO, as well as the ld.CIT (A) was incorrect in coming to the conclusion that the property is deemed to be let out and income from said property needs to be computed u/s 22 - direct the Ld. AO to delete additions made towards income from house property as against, the income offered by the assessee under the head income from other sources. - Decided in favour of assessee. - ITA No.1309/Mum/2018 - - - Dated:- 28-2-2020 - Shri Saktijit Dey, Judicial Member And Shri G. Manjunatha, Accountant Member For the Assessee : Shri Rakesh Mohan, AR For the Revenue : Ms. Jyoti Lakshmi Nayak, DR ORDER PER G.MANJUNATHA (A.M): This appeal filed by the assessee is directed against, the order of the Ld. Commissioner of Income Tax (Appeals) 22, Mumbai, dated 08/11/2017 and it pertains to Assessment Year 2011-12. 2. The assessee has raised the following grounds of appeal:- Ground N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are vacant, but the assessee has entered into an option agreement with M/s First Data (India) Pvt.Ltd. for a period of 9 months with a covenent that the property shall not be let out to a third party, without the consent of the tenant for a period of 9 months, for which a compensation of ₹ 33,75,000/- has been fixed and said compensation has been offered to tax under the head income from other sources. During the course of assessment proceedings, the Ld. AO noticed that the assessee has declared loss of ₹ 10,06,170/- under the head income from other sources. The Ld. AO, further noted that the assessee has shown compensation income of ₹ 33,75,000/- and as against, which it has claimed expenses of ₹ 43,81,170/- to shown net loss of ₹ 10,06,170/-. Therefore, he called upon the assesee to produce the details of income from other sources and also, details of expenses along with copy of agreements/documents, if any etc., In response, the assessee vide letter dated 26/12/2013 stated that it has received compensation of ₹ 33,75,000/- from M/s First data (India) Pvt.Ltd., in pursuance of an option agreement, as per which the assessee has given an optio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessee that compensation received from M/s. First Data (India) Pvt.Ltd. was not assessable under the head income from house property, because it is neither in the nature of rent agreement, nor the property has been let out. The Ld.CIT (A), further observed that the second contention of the assessee that if at all, income is assessable under the head income from house property, then the Annual letout Value of the property shall be determined in accordance with Municipal Rateable value, because in order to determine ALV of the property by applying Municipal Rateable Value, the property should be outside the purview of rent control Act. Since, the property in question comes with in the ambit of the Maharashtra Rent control Act, 1999, the Annual letout Value of the property shall be determined in accordance with provisions of section 22 of the I.T.Act, 1961, as per which the annual let out value of the property shall be the value, which, the property might fetch in the market. Since, the ld. AO has taken market value of the property on the basis of unit No.3 4 let out by the assesse to M/s. First Data (India) Pvt.Ltd., there is no reason to deviate from the Annual Value determine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , there is no reason to interfere with findings of the Ld.CIT (A). 7. We have heard both the parties, perused the material available on record and gone through orders of the authorities below. The provision of section 22 23 of the Act, 1961 deals with computation of income from house property. Section 22 of the Act, deals with taxability of rental income from immovable properties. The computation of annual value of the property has been enshrined in section 23 of the Act. Section 22 of the Act, provides for the mechanism to compute the income chargeable under the head income from house property. As per provisions of section 23, the annual value of any property shall be deemed to be the sum for which, the property might reasonably be expected to let from year to year or where, the property or any part of property is let and the actually rent received or receivable by the owner in respect thereof is in excess of the sum referred to in clause (a) or where, the property is let and was vacant during the year 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 sum referred to clause (a), then ..... X X X X Extracts X X X X X X X X Extracts X X X X
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