TaxTMI 
TaxTMI 
2022 (12) TMI 172
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....use Property of Rs. 63,37,765/-. 2. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in deleting the addition made on account of disallowance of interest expenditure of Rs.99,21,084/-. 3. It is, therefore, prayed that the order of the Ld.CIT(A) may be set-aside and that of Assessing Officer may be restored to the above extent. 4. The appellant craves leave to add, alter, amend and/or withdraw any ground(s) of appeal either before or during the course of hearing of the appeal." ITA No. 1461/Ahd/2018 A.Y. 2014-15 "1. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in deleting the addition made on account of Annual Lettable Value (ALV) as income from House Property of Rs.69,52,499/-. 2. On the facts and in the circumstances of the case, the Ld.CIT(A) has erred in deleting the addition made on account of disallowance of interest expenditure of Rs.86,78,028/-. 3. It is, therefore, prayed that the order of the Ld.CIT(A) may be set-aside and that of Assessing Officer may be restored to the above extent. 4. The appellant craves leave to add, alter, amend and/or withdraw an....
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....as NIL as envisaged u/s 23(l)(c) of the Act. Therefore the A.O. is direct to consider the A.L.V at NIL in respect of each such property which has remained vacant and to delete addition of Rs.63,37,765/-. The appeal succeeds on this ground." 6. The Department is in appeal before us against the aforesaid order passed by Ld. CIT(Appeals) deleting the ALV computed by the Ld. Assessing Officer. The Ld. DR submitted that Ld. CIT(Appeals) has not gone into the facts of the case while allowing assessee's appeal. The Ld. CIT(Appeals) simply accepted the assessee's contention and the judicial precedents placed before him and has not gone into the details of each of the individual properties and has not ascertained separately as to the reasons why the same were lying vacant. The Ld. DR placed reliance on decisions of Vivek Jain 14 taxmann.com 146 (Andhra Pradesh), wherein the High Court held that where property has not been let out at all during the previous year under consideration, there is no question of any vacancy allowance being provided under section 23(1)(c) of the Act. Further, the High Court held that the words in section 23(1)(c) of the Act is "let" and the same cannot be read a....
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....by the owner in respect thereof is less than the sum referred to in clause (a), the amount so received or receivable : 8.1 In the case of Asfa Technologies & BPO (P.) Ltd.[2022] 143 taxmann.com 170 (Chennai - Trib.), the ITAT has held that if property is let out for two or more years and was vacant for whole or any part of previous year, then said property would come within ambit of provisions of section 23(1)(c).The ITAT further held that where property owned by assessee was let right from assessment years 2008-09 to 2011-12, however, same was vacant due to non-availability of tenants for impugned assessment year alone, Assessing Officer had erred in computing annual value of property in terms of section 23(1)(a) and, thus, he was to be directed to delete addition made towards income from house property. While passing the order, the ITAT held as below: ■ As per provisions of section 23(1), for the purpose of section 22, annual value of any property shall be deemed to be sum for which property might reasonably be expected to let from year-to-year and where property or any part of property is let and was vacant during whole or any part of previous year and owing to....
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....he property which is evident from e-mail correspondence between the assessee and agents however, could not get tenants for relevant period. Therefore, the assessee has rightly computed annual letting value of the property as per provisions of section 23(1)(c). The term 'property is let' used in section 23(1)(c) is solely used with intent to avoid misuse of determination of annual value of self-occupied property by taking recourse to section 23(1)(c), however, same cannot be stretched beyond that and thus, annual value of property which was let, but thereafter remains vacant for whole year under consideration, subject to condition that same is not put under self-occupation of the assessee and is held for the purpose of letting out of the same would continue to be determined under section 23(1)(c). 8.2 In the case of Metaoxide (P.) Ltd.[2018] 92 taxmann.com 302 (Mumbai - Trib.), the ITAT held that in order to avail benefit of clause (c) of section 23(1), it is not necessary that property should have been actually let out in relevant previous year or during any time prior to relevant previous year. 8.3 In the case of Vikas Keshav Garud[2016] 71 taxmann.com 214 (Pune - Tr....
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....e' of a property which is let, but thereafter remains vacant for whole year under consideration, subject to condition that same is not put under selfoccupation of assessee and is held for purpose of letting out of same, would continue to be determined under section 23(1)(c). 8.7 In the case of Kamal Kumar[2022] 140 taxmann.com 106 (Delhi - Trib.), the ITAT held that where commercial property of assessee remained vacant during whole of previous year due to facts that property was unauthorized property and Government was having a sealing drive on unauthorized property, provisions of section 23(1)(c) would not be applicable and tax authorities below had thus fallen in error in taxing assessee on basis of notional rent. 8.8 Now coming to the instant facts, we observe that the counsel for the assessee has submitted that the properties under question were let out in earlier years, but due to reasons beyond the control of the assessee, the same could not be let out during the year under consideration. The counsel for the assessee placed on record various documents in support of the contention that the assessee had made substantial efforts by way of newspaper advertisements etc. ....
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....nd 120,000/- paid to Vinubhai Shah (HUF). Accordingly, the AO held that since the assessee has failed to establish clear nexus between the interest expenditure of 99,21,084/- (comprising of 71,86, 866/- + 26,14,218/- + 120,000/-), the same is being disallowed and added back to the total income of the assessee. 11. In appeal, Ld. CIT(Appeals) allowed the assessee's appeal with the following observations: "8.4 The Ld. AR has relied upon his submission of A.Y. 2010-11 against the assessment u/s 153C r.w.s. 143(3), wherein the Ld: AR has submitted that the appellant had incurred interest expense towards loans taken and same were extended to other parties on which interest income has been earned that interest income earned during the year and offered to tax u/s 56 of the Act is Rs.1,06,06,189/- as against interest expense of Rs.93,97,212/- that interest expense that is claimed as expenditure u/s 57 of the Act while computing income from other sources. It is also submitted that CIT(A)-5 Baroda vide order dated 05/10/2016 in the appellant's own case for A.Y. 2012-13 [against earlier assessment order u/s 143(3)] held on the identical issue, in ....