2019 (2) TMI 274

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....ncome from a vacant property. 3. That the ld.CIT(Appeal) has erred on facts and in law in not appreciating the fact that the assessee has not received any rent in the entire year and therefore as per Section 23(1) (c) of the Act, the annual value should be considered as NIL." 3. The facts of the case, in brief, are that the assessee is an individual and derives income from business of garments and export of garments. He filed his return of income on 29.11.2014 declaring total income of Rs. 33,28,630/-. The Assessing Officer, during the course of assessment proceedings observed that the assessee owns two house properties. During the year under consideration, the assessee was using one property for self occupation and has claimed loss of R....

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....cer was fully justified in adding the net annual value based on the last year's rental value of Rs. 10,80,000/-. Aggrieved with such order of the CIT(A), the assessee is in appeal before the Tribunal. 4. The ld. counsel for the assessee strongly challenged the order of the CIT(A) upholding the addition made by the Assessing Officer. He submitted that the ld.CIT(A) did not consider the provision of section 23(1)(c) which reads as under:- "23. (1) For the purposes of section 22, the annual value of any property shall be deemed to be- (a) the sum for which the property might reasonably be expected to let from year to year; or (b) where the property or any part of the property is let and the actual rent received or receivable by the owne....

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....on the home loan taken. Although this property was let out during the preceding year at Rs. 10,80,000/- and Rs. 5,10,000/- in the succeeding year, however, no rental income has been shown from this property on the ground that no suitable tenant was available for the current year and the property remained vacant throughout the year. I find the Assessing Officer, adopting the net annual value of the preceding year at Rs. 10,80,000/- made addition of Rs. 1,99,609/-, after allowing statutory deduction u/s 24 towards repairs and maintenance and the interest paid on home loan. It is the submission of the ld. counsel for the assessee that the provisions of section 23(1)(c) of the IT Act are clearly applicable to the instant case, I find the order ....

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....e of assessment proceedings, observed that certain expenses debited in the Profit & Loss Account appears to be personal in nature. After discussion, the assessee agreed for lumpsum disallowance of Rs. 4 lakhs. The Assessing Officer accordingly, made addition of Rs. 4 lakhs to the total income of the assessee on account of unverifiable inadmissible excessive claim of the assessee incurred for non-business purposes. The details of such expenses are as under:- Diwali Expenses Rs.78,107/- Interest on Car Loan Rs.1,05,901/- Machinery repair Rs.2,65,756/- Office repair & maintenance Rs.38,330/- Sale Promotion Rs.76,896/- Telephone Expenses Rs.1,02,568/- Vehicle running expenses Rs.3,62,464/- Depreciation on car Rs.1,18,895/- Tota....