2015 (12) TMI 565

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....red to as "the Tribunal") in ITA No. 561/CHANDI/2007, for the assessment year 2004-05. The appeal was admitted by this Court vide order dated 15.12.2008 for considering the question of law proposed in para 5 of the appeal which is to the following effect:- Whether on the facts and circumstances of the case and in law, the Hon'ble ITAT was correct in not appreciating that Section 25AA is applicable in respect of only that rent which was unrealisable due to the circumstances of Rule 4 read with explanation to Section 23(1) of the I.T. Act, 1961? 2. Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee filed its return of income on 25.10.2004 for the assessme....

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.... Rule 4 of the Income Tax Rules, 1962 (for brevity "the Rules") which have been made in pursuance to Explanation to Section 23 of the Act. In support of his contention, learned counsel has relied upon the judgments in D.C. Anand and sons v. Commissioner of Income Tax, New Delhi (1981) 131 ITR 77 (Del) and D.M. Vakil v. Commissioner of Income Tax (1946) 14 ITR 298 (Bom). 4. On the other hand, learned counsel for the assessee supported the order passed by the Tribunal. 5. After hearing learned counsel for the parties, we do not find any merit in the appeal. 6. The solitary question that arises in this appeal is whether the rent of building at Mohali amounting to Rs. 10 lacs was receivable by the assessee in this year or not? 7. It....

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....which the owner cannot realise. XX XX XX" 8. As per the aforesaid Explanation, the amount of rent which the owner cannot realize is not to be included in clause (b) or clause (c) of sub-section (1) of Section 23 of the Act for determining the amount of actual rent received or receivable by the owner. 9. The Tribunal relying upon Section 25AA of the Act had held that the unrealized rent could not be taxed in the year in question but would fall for taxation in the year it is so realized even if the assessee may not be owner of the property in that previous year. We do not find any infirmity in the approach of the Tribunal as according to Section 25AA of the Act as well, the unrealized rent cannot be taken to be taxable in the h....