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TMI Blog2022 (7) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... er-alia, was engaged in the business of investing in real estate projects. The appellant entered into participation and development agreement to provide fund and strategic inputs for the development of the commercial property and in consideration, the appellant became entitled to get 4,05,355 Sq. Ft. area in the property named "Einstein". 3. Thus, the Appellant acquired possession of bare shell structure of the properties comprising of 4th 5th, 8th , 9th & 10th floor vide respective agreements all dated 19th October, 2012. The Appellant wanted to lease the entire property to earn rental income. However, during the relevant previous year, despite best effort, the Appellant was not able to lease out the entire property. Area comprising of 2, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ), wherein following grounds have been raised: 1.1 On the facts and circumstances of the case and in law, the learned Commissioner of Income Tax (Appeals) -4 (hereinafter referred to as "the Ld. CIT(A") erred in not applying the provisions of section 23(1)(c) of the Act to the property comprised of area 1,88,035 sq.Ft.) 4th, 5th, 8th and 9th floor of Tower A & B and 10th floor of Tower C), which has been let out to Schneider Electric India Private Limited w.e.f. 1st January, 2013. The property was a bare shell structure and unfit for occupation. 1.2 On the facts and circumstances of the case and in law, the Ld. CIT(A) erred in not appreciating the fact that property comprising of area 1,88,035 Sq.Ft. let out to Schneider Electric India ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessary steps to make the Leased Property fit for occupation. The Assessing Officer without appreciating the facts invoked provisions of Section 23(1)(a) and added notional rental income in the hands of the Appellant by taking rate of INR 35.67 per Sq. Ft. per month as average rent for the period commencing from 19.10.2012 to 31.03.2013. In appeal before CIT(A), the Appellant, relying upon copy of approvals granted by Government Department/Authorities, the Appellant pointed out that the Lessee had obtained approval for commissioning drawings pertaining to electronic installations, and commissioning electronic installations before getting approval for electrical safety on 18.09.2014. Thus, establishing that the Leased Property was not fit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntative supported the assessment order and relied upon the order passed by CIT(A). He submitted that the occupation certificate was issued to the Appellant and therefore it cannot be said that the Leased Property was not fit for occupation. Further, the fact that the Appellant had agreed not to charge rent for a period of five months would not result in reduction of the rental income. 8. We have heard the rival contentions and perused the material on record. We note that the Appellant had acquired area of 4,05,355 Sq. Ft. on 19.10.2012. Out of the aforesaid, an area comprising of 2,17,320 Sq. Ft. remained vacant throughout the year. The CIT(A), in appeal filed by the Appellant, granted the benefit of vacancy allowance in terms of Section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... time even by any previous owner, it can be claimed that the property is let out property because the clause talks about the property and not about the present owner and since the property was let out in past, it is a let out property although, the present owner never intended to let out the same. In our considered opinion, it is not at all relevant as to whether the property was let out in past or not. According to us, these words do not talk of actual let out also but talk about the intention to let out. If the property is held by the owner for letting out and efforts were made to let it out, that property is covered by this clause and this requirement has to be satisfied in each year that the property was being held to let out but remain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of vacancy allowance in terms of Section 23(1)(c) of the Act for the period commencing from 19.10.2012 to 31.12.2012 during which the Leased Property was actually vacant. 10. As regards notional interest charged for the period commencing from 01.01.2013 to 31.03.2013 forming part of the rent free period of five months, we note that it is not the case of the Revenue that the agreement entered into between the Appellant and the Lessee is sham. The Assessing Officer and the CIT(A) have rejected the contentions of the Appellant that the Leased Property was not fit for occupation by the Lessee only on the basis of the fact that Occupation Certificate was issued on 02.06.2012. It has not been disputed by the Revenue that the Leased Properties w ..... X X X X Extracts X X X X X X X X Extracts X X X X
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