Unrealised rent deduction denied where statutory conditions and reasonable recovery steps were not proved.

Deduction for unrealised rent under section 24(1)(x) read with rule 4 was available only if the statutory conditions were met, including bona fide tenancy, actual loss and irrecoverability of the rent, and reasonable steps for recovery or satisfaction of the Income-tax Officer that recovery proceedings would be useless. On the facts, the tenant had tendered rent, the amount was deposited with the Rent Controller after refusal by the assessee, and the assessee failed to show that all reasonable recovery steps had been taken. The material did not establish that the rent was wholly lost or irrecoverable, so the deduction was disallowed and the issue was answered against the assessee.

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Issues: Whether deduction for unrealised rent under section 24(1)(x) of the Income-tax Act, 1961, read with rule 4 of the Income-tax Rules, 1962, was allowable on the facts found by the Tribunal.

Analysis: Deduction for unrealised rent is available only when the statutory conditions are satisfied, including bona fide tenancy, loss and irrecoverability of the rent, and the taking of reasonable steps for recovery or satisfaction of the Income-tax Officer that proceedings would be useless. On the facts, the tenant had tendered rent, the amount was deposited with the Rent Controller after refusal by the assessee, and the assessee had not shown that all reasonable steps had been taken to recover the rent. The material did not establish that the rent was wholly lost or irrecoverable.

Conclusion: The assessee was not entitled to deduction under section 24(1)(x), and the question was answered in the negative, in favour of the Revenue.

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