2025 (7) TMI 1026

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....T(A) grossly erred in deleting the addition of Rs. 3,94,00,000/- on account of notional rent u/s. 23(1)(a) of the Act. iii) The Ld. CIT(A) grossly erred in assessing income from the house property that was vacant during the whole previous year relevant to AY 2012-13 in terms of section 23(1)(C) of the Act instead of section 23(1)(c) of the Act. 2. Brief facts of the case are that the assessee company filed its original return on 31.08.2013 for the year under consideration, declaring total loss of Rs. 21,80,246/-. The return of income was processed u/s. 143(1) of the Act on 29.08.2013. A search and seizure operation was conducted by the Investigation Wing of the Department on 11.09.2013 and 17.09.2013 on the AKN Group of cases. The assess....

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....Oriental Bank of Commerce Life Insurance Company Ltd.) for a period of 6 months commencing from 01.10.2010 up till 31.03.2011. 4. On 19.01.2011, the said tenant had issued a letter-cumnotice of termination of lease deed dt. 11.10.2010, to the assessee. On 24.02.2011, the said tenant had issued another letter to the assessee, making reference of their last letter dt. 19.01.2011 (through which they had provided notice of termination of lease deed dt. 11.10.2010) and stating that they will be vacating the leased premises at 11.00 AM on 28.02.2011. 5. At the same time the said tenant had requested the assessee to adjust Rs. 32,83,813.50 on a/e of rent for the month of February 2011 and refund the remaining security deposited amount of Rs.....

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.... several cases have held that when property in question though remained on rent in the earlier years. but remained vacant during the entire year under assessment for whole or part year and as such no rent was received by the assessee for that period and consequently assessee has not offered any income to tax for that period of vacancy, the provisions of Section 23(1)(c) of the Act are applicable. Therefore, applying Section 23(I)(c) of Income Tax Act the Annual Value of the property would be treated as Nil and this will not result in any income by the House Property. In view of the legal position discussed above and keeping in mind the facts of the case the addition made by the Assessing Officer on account of notional rent u/s 23(1)(a) of t....

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....ved from it has to be considered as zero being less than the amount referred in Section 23(l)(a) of the Act. When Revenue has not brought on record any evidence if property has not remained vacant for the entire year under consideration or was self-occupied in some other manner, the rental value as per Section 23(1)(c) of the Act has to be 'NIL. 9. Ld. CIT (Appeals) in deciding the issue in controversy relied upon the decision rendered by Hon'ble Andhra Pradesh High Court in the case of Vivek Jain Vs. ACIT 337 ITR 74 (A.P.) which is distinct on facts because property involved in said case was let out for some part of the assessment year, so the said decision is not applicable to the facts and circumstances of the case. 10. Ide....