Appeal delay excused; Rental income determination favored assessee; Re-adjudication ordered. The delay in filing the appeal was condoned due to circumstances beyond the assessee's control. The main issue of determining rental income under section ...
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Appeal delay excused; Rental income determination favored assessee; Re-adjudication ordered.
The delay in filing the appeal was condoned due to circumstances beyond the assessee's control. The main issue of determining rental income under section 23(1)(a) of the Act was in favor of the assessee, as the Assessing Officer's method was found erroneous. The Tribunal directed a re-adjudication under section 23(1)(c) for correct annual letting value determination. The appeal was partly allowed for statistical purposes.
Issues: Delay in filing appeal, Determination of rental income under section 23(1)(a) of the Act.
Delay in filing appeal: The appeal was delayed by 121 days due to the misplacement of the order by an employee who was subsequently removed. The assessee filed an affidavit for condonation of delay, which was found to be reasonable and beyond the control of the assessee. The delay was condoned in the interest of natural justice, and the appeal was disposed of on merit.
Determination of rental income under section 23(1)(a) of the Act: The main issue in the appeal was against the action of the CIT(A) upholding the determination of rental income by the Assessing Officer under section 23(1)(a) of the Act. The assessee, engaged in construction and letting out properties, had rented out the second floor of a building and had other floors vacant. The Assessing Officer determined a notional rental income for all floors based on an inspector's report. The assessee argued that the determination was erroneous and should have been done under section 23(1)(c) of the Act, following the principles laid down by the Supreme Court. The Tribunal found the Assessing Officer's determination to be erroneous as it did not explain how the fair rent was determined. The issue was restored to the Assessing Officer for re-adjudication under section 23(1)(c) to determine the correct annual letting value.
In conclusion, the appeal of the assessee was partly allowed for statistical purposes, and the order was pronounced in open court on 24th December 2018 in Chennai.
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