TaxTMI 
TaxTMI 
2021 (10) TMI 956
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....onfirming the addition of Rs. 1,09,924/- in respect of three properties in Amritsar by ignoring the fact that these properties were vacant during the year and annual income should have been computed at nil under section 23(1)(c) of the Act. 3. The facts in brief are that the AO during the course of assessment proceedings noted that assessee had offered rental income in respect of one property situated at Madanmohan Malviya Road, Amritsar, Punjab, however, not offered any income in respect of other three properties namely property at Moonlight Building, at Katra Ahluwalia and Ramkin Joint property at MM Malviya Road, Amritsar. According to the AO the income from the said vacant property should have been offered on the basis of deemed rent....
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....ome to tax. Now the issue before us is whether the deemed rent of the assessee has to be taken as annual value (ALV) under section 23(1)(a) for the purpose of assessment of income under section 22 of the Act or whether the assessee is entitled to vacancy allowance as provided under section 23(1)(c) of the Act. 6. After carefully perusing the provisions of section 22, section 23(1)(a) and section 23(1)(c) of the Act, we are of the considered view that the ALV of the property, which could not be let out during the year, would be nil in accordance with the provisions of section 23(1)(c) of the Act. The assessee is entitled for the vacancy of allowance in respect of the said properties and armed length price has to be assessed as rent receiv....
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....Act. For the better clarity, sub-clause (c) of section 23(1) of the Act is reproduced below:- Annual value how determined. 23. (1)(c) where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable: Provided that the taxes levied by any local authority in respect of the property shall be deducted (irrespective of the previous year in which the liability to pay such taxes was incurred by the owner according to the method of accounting regularly employed by him) in determining the an....
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....sion--property is let under clause (c) of section 23(1) does not mean that the property should have been actually let in the relevant previous year or during any time prior to the relevant previous year. But it will mean the property is intended to be let out. Similar view was also expressed in case of Dr. Prabha Singhi. Therefore, applying the ratio laid down in the decisions referred to above, we hold that the learned Commissioner (Appeals) was justified in directing the Assessing Officer to allow the deduction under section 23(1)(c) to the assessee. Thus, grounds raised in all these appeals are dismissed. 10. In the result, all these appeals are dismissed." 7. We, therefore, respectfully following the decision of the coordina....