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TMI Blog2022 (8) TMI 572X X X X Extracts X X X X X X X X Extracts X X X X ..... previous year and it should be vacant for any part of the previous year. it is very clear that provisions of section 23(1)(c) of the Income Tax Act, 1961 does not apply, in case where property is not let out at all. However, if the property is let out for two or more years and was vacant for whole or any part of the previous year, then said property would come within ambit of provisions of section 23(1)(c). In this case, property was let out earlier, however, it was vacant during the impugned assessment year owing to non-availability of tenants. It is not the case of the Assessing Officer that property was not at all let out. In fact, the Assessing Officer has admitted fact that property was let out, but was vacant for the impugned assessment year alone. Further, the assessee has made his best efforts to let out the property which is evident from e-mail correspondence between the assessee and agents however, could not get tenants for relevant period. Therefore, we are of the considered view that the assessee has rightly computed annual letting value of the property as per provisions of section 23(1)(c) and this principle is supported by the decision of M/s. Sonu Realtors Pvt.Ltd [ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r simplified determination of Annual Value after allowing deductions in computing the Annual Value itself on account of vacancy and unrealized rent. 2.5 Even after noticing that the appellant's property was vacant for whole of the previous year and owing to such vacancy the actual rent received was NIL, the learned CIT(A) failed to adopt the Annual Value as NIL. 2.6 The learned CIT(A) ought to have appreciated that the appellant, despite all diligent efforts could not find a suitable tenant and on that score the property remained vacant for the whole of the previous year. 2.7 The learned CIT(A) had failed to follow the settled legal position that the Board's Beneficial Circulars issued u/s.119(2) are binding in nature and it is not open to the Revenue to raise a contention that it is contrary to terms of the Statue so long as the Circular remains in operation. 2.8 The learned CIT(A) failed to take into account the observations of Hon'ble Members of ITAT- Pune Bench reported in 71 Taxmann.com 214 in the case of Vikas Kesav Garud Vs ITO, Ward 1(2), Nashik, that the Hon'ble Andhra Pradesh High Court's decision relied upon by the Assessing Officer could ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of section 23(1)(a) of the Income Tax Act, 1961, and determined gross annual value of Rs.1,15,94,161/- and computed income from house property at Rs.23,91,146/- after allowing standard deduction u/s.24(a) and interest on loan u/s.24(b) of the Act. 5. Being aggrieved by the assessment order, the assessee preferred an appeal before the learned CIT(A). The assessee has contended the issue, in light of certain judicial precedents and argued that when the property was let out and it became vacant for whole or any part of the year, then annual letting value of the property needs to be computed u/s.23(1)(c) of the Income Tax Act, 1961, but not u/s.23(1)(a) of the Act. 6. The learned CIT(A), after considering relevant submissions of the assessee and also by relied upon decision of the Hon'ble Punjab & Haryana High Court in the case of Susham Singla Vs. CIT 76 taxmann.com 349, which was subsequently upheld by the Hon'ble Supreme Court by dismissal of SLP filed by the assessee, rejected contention of the assessee and upheld additions made by the Assessing Officer towards income from house property on the basis of computation of annual letting out value of the property as per provisions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 23(1) of the Act, for the purpose of section 22, annual value of any property shall be deemed to be sum for which property might reasonably be expected to let from year to year and where property or any part of property is let and was vacant during whole or any part of previous year and owing to such vacancy, actual rent received or receivable by the owner in respect thereof is less than sum referred to in clause (a) amount so received or receivable will be annual value of the property. As per plain reading of section 23(1)(c), if any property was let and was vacant during whole or any part of previous year, then annual value of said property should be computed in terms of provisions of section 23(1)(c) of the Act. In this case, there is no dispute with regard to fact that property owned by the assessee was let right from assessment year 2008-09 to 2011- 12, however, same was vacant due to non-availability of tenants for the assessment year 2012-13 to assessment year 2013-14. But, same property was again let out from the assessment year 2015-16 onwards. The assessee has computed Nil annual letting value of the property in terms of provisions of section 23(1)(c) of the Act, w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of annual value of self-occupied property by taking recourse to section 23(1)(c), however, same cannot be stretched beyond that and thus, annual value of property which was let, but thereafter remains vacant for whole year under consideration, subject to condition that 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) of the Income Tax Act, 1961. 11. As regards case laws relied upon by the Revenue by the decision of Hon'ble High Court of Andhra Pradesh in the case of Mr. Vivek Jain Vs. ACIT (supra) and decision of the Hon'ble Punjab &Haryana High Court in the case of Susham Singla Vs. CIT (supra), we find that facts of those cases are entirely different and cannot be applied to facts of the present case. 12. In this view of the matter and considering facts & circumstances of the case and also by following decision of the ITAT., Mumbai in the case of M/s. Sonu Realtors Pvt.Ltd Vs. DCIT (supra), we are of the considered view that the Assessing Officer has erred in computing annual letting value of the property in terms of section 23(1)(a) of the Act. Hence, we direct the Assessin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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