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TMI Blog2021 (10) TMI 956X X X X Extracts X X X X X X X X Extracts X X X X ..... e has to be assessed as rent received or receivable and not the amount for which the property is expected to be let out from year to year is to be considered for the purpose of assessing the ALV. In the present case since the properties have not been let out at all during the year, therefore the ALV has to be taken as nil. See M/S. METAOXIDE PVT. LTD. [ 2018 (4) TMI 1513 - ITAT MUMBAI] - thus we direct the AO to delete the addition made in respect of three vacant properties at Amritsar. Ground No. 1 is allowed. Addition of agricultural income declared by the assessee - In the A.Y. 2011-12, the assessee has declared income of ₹ 7,63,472/- and the AO has treated the 50% as agricultural income of the assessee and 50% was added to t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e in respect of other three properties namely property at Moonlight Building, at Katra Ahluwalia and Ramkin Joint property at MM Malviya Road, Amritsar. According to the AO the income from the said vacant property should have been offered on the basis of deemed rental value which the property might reasonably be expected to be let out from year to year for the purpose of assessment of income under section 22 of the Act. The assessee submitted before the AO that since these properties were not let out during the year at all and therefore the assessee has claimed vacancy allowance under section 23(1)(c) in respect of these three properties. However, reply of the assessee did not find favour with the AO and he estimated the annual value (ALV) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, which could not be let out during the year, would be nil in accordance with the provisions of section 23(1)(c) of the Act. The assessee is entitled for the vacancy of allowance in respect of the said properties and armed length price has to be assessed as rent received or receivable and not the amount for which the property is expected to be let out from year to year is to be considered for the purpose of assessing the ALV. In the present case since the properties have not been let out at all during the year, therefore the ALV has to be taken as nil. The case of the assessee is squarely covered by the decision of the co-ordinate Bench of the Tribunal in the case of M/s. Metaoxide Pvt. Ltd. vs. ITO in ITA No. 5773/M/2016 A.Y. 2010-11, the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of accounting regularly employed by him) in determining the annual value of the property of that previous year in which such taxes are actually paid by him. Explanation.--For the purposes of clause (b) or clause (c) of this sub-section, the amount of actual rent received or receivable by the owner shall not include, subject to such rules as may be made in this behalf, the amount of rent which the owner cannot realise. 9. A reading of the said provision reveals that where any part of the property is let out and was vacant during the whole or an ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the deduction under section 23(1)(c) to the assessee. Thus, grounds raised in all these appeals are dismissed. 10. In the result, all these appeals are dismissed. 7. We, therefore, respectfully following the decision of the coordinate Bench of the Tribunal set aside the order of Ld. CIT(A) and direct the AO to delete the addition made of ₹ 1,09,924/- in respect of three vacant properties at Amritsar. The ground No. 1 is allowed. 8. The issue raised in ground No. 2 is against the confirmation of addition of ₹ 8,12,790/- as made by the AO in respect of agricultural income declared by the assessee. 9. The facts in brief are that during the course of assessment proceedings the AO noticed that assessee has claimed to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... me, therefore the 50% of the said agricultural income may be allowed to be treated as agricultural income whereas the rest of 50% may be added to the income of the assessee. We find merit in the contention of the Ld. A.R. after perusing the assessment order for A.Y. 2011-12 wherein the AO has treated the agricultural income on the same basis. Accordingly, we set aside the order of Ld. CIT(A) and direct the AO to treat 50% of ₹ 8,12,790/- which comes to ₹ 4,06,395/- as agricultural income and to treat the remaining 50% of ₹ 4,06,395/- as regular taxable income. Accordingly, ground is partly allowed. 12. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open court on 13.10.2021. - ..... X X X X Extracts X X X X X X X X Extracts X X X X
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