TaxTMI 
TaxTMI 
2022 (2) TMI 1054
X X X X Extracts X X X X
X X X X Extracts X X X X
....gal and unjustified and, therefore, ought to be deleted. 2. Without prejudice to the above, the computation of deemed rent of Rs. 10,46,249 calculated @ 5% of investment in house property is not in conformity with the annual value of house determined as per municipal valuation and therefore, the excess of Rs. 10,46,249 over such annual value as per municipal valuation is illegal and unjustified and ought to be deleted. 3. That the Commissioner (Appeal) erred in not deciding the issue raised by the assessee that deemed annual value of house property cannot exceed the annual value of house determined as per municipal valuation and therefore, the order passed by the Commissioner (Appeal) is illegal and unjustified. 4....
X X X X Extracts X X X X
X X X X Extracts X X X X
....submitted that he intended to let out the property during the year under consideration. However, he could not find any suitable tenant and, therefore, both properties remained vacant during the year under consideration. As soon as he found tenant, he let out both properties in succeeding year 2016-17. As evidence of properties actually let out in FY 2016-17, assessee submitted Rent Agreement, Monthly Rent Bills raised by assessee upon tenants with service tax charged thereon and Bank Statement highlighting the receipt of rent cheques from tenants. The assessee contended that courts have held that the phrase "is let" used in section 23(1)(c) means "is intended to be let". The assessee further submitted that it is not the case of AO that the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... perusal of sub-section (4) of section 23 which provides that where an assessee owns more than one house property in occupation used for the purpose of own residence, the annual value of any one of such house property, at his option, shall be taken to be "Nil" and the annual value of the remaining house or houses shall be determined under sub-section (1) as if such house or houses had been let. Here the words "sub-section (1)" and "as if had been let" cannot be ignored and have to be given due meaning. It is by now a settled law that deeming fictions have to be strictly construed in such a manner as to give logical meaning to the fiction. Once section 23 deems properties, not being any one of the self-occupied residential house and actually....
X X X X Extracts X X X X
X X X X Extracts X X X X
....y allowance upto AY 2001-02 against computation of annual value of a house property remaining vacant. Section 24(1)(ix) was deleted from statute vide Finance Act, 2001 and simultaneously section 23(1)(c) was inserted. Prior to deletion, section 24(1)(ix) read as - "where the property is let and was vacant during a part of the year, that part of the annual value which is proportionate to the period during which the property is wholly unoccupied or, where the property is let out in parts, that portion of the annual value appropriate to any vacant part, which is proportionate to the period during which such part is wholly unoccupied." A perusal of section 24(1)(ix) shows that the legislature considered the words "vacant" and "unoccupied" as sy....
X X X X Extracts X X X X
X X X X Extracts X X X X
....twhile section 24(1)(ix). 12. It was argued that section 23(1)(c) covers the following three situations: 1. Where the property or any part of the property is deemed to be let and was vacant during the whole of the relevant financial year - In such case, the annual value shall be nil because actual rent received or receivable is nil provided such property is not in self-occupation of the assessee, for in that case, it shall not be vacant property. 2. Where the property or any part of the property is deemed to be let and was vacant during the part of the financial year - In such case, owing to vacancy, the annual value for the vacant period shall be nil. However, for the part period during which the property was in occupa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....assessee in FY 2016-17 of the said two properties situated at (i) 32, Sector-15, Sonepat, Haryana-132302 and (ii) DTJ-120, 1st Floor, Jasola Tower-B, Jasola, New Delhi-110025 was Rs. 110,400/- (Rs. 9200 per month) and Rs. 1,44,000/- (Rs. 12000 per month) respectively, totaling to Rs. 2,54,400. As evidence, assessee submitted Rent Agreement, Monthly Rent Bills raised by assessee upon tenants with service tax charged on rent and Bank Statement highlighting the receipt of rent cheques from tenants in FY 2016-17. The assessee thus contended that annual value of the said two properties in terms of section 23(1)(a) came to Rs. 2,54,400/-. 17. The assessee further submitted along letter dated 09.03.2016 the property-wise chart of rental income ....