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2017 (1) TMI 52 - ITAT BANGALOREAnnual letting value - Property deemed to be let out - benefit of vacancy allowance - Held that:- In the case on hand the assessee has claimed that prior to the lease agreement produced before the Assessing Officer it was not possible for the assessee to let out the property and therefore it claimed the benefit of vacancy allowance. In the absence of any contrary finding that the assessee has deliberately not let out during the year under consideration, it cannot be presumed. Therefore pre-letting out period cannot be deemed to be let out the property. In any case, if the provisions of section 23(1)(c) of the Act are to be understood that the vacancy allowance is available only in the case where the property is already let out and there is a vacancy in between then the deeming provision of section 23(4) r.w.s. 23(1) shall also be understood that in case of vacancy of the property in between from the initial letting out, it will be deemed as let out. Therefore, these provisions cannot be applied when there is a time lag between the acquisition of the property and letting out of the property and there is no allegation of deliberate unreasonable delay in letting out of the property. Thus the addition made by the Assessing Officer is not justified and the same is deleted. Addition on account of deemed advance - Assessing Officer has made an addition of income as notional interest @ 12% p.a. on deemed advance received from the tenant - Held that:- There is no dispute that as per the lease agreement the advance was received by the assessee only in the next assessment year at the time of execution of the lease agreement. Therefore there is no justification in making the addition by deeming the advance from the tenant. The Assessing Officer has not disputed the fact that the advance was received only at the time of lease agreement therefore, the addition of notional interest is highly arbitrary action on the part of the Assessing Officer as there is no actual benefit received by the assessee. Hence, the said addition made by the Assessing Officer is absolutely illegal and without any basis and accordingly deleted. Addition by applying the guiding value as per section 50C as cost of purchase of the property - Held that:- The provisions of section 50C are applicable only for the purpose of capital gains. The said provisions postulate a deemed full value of consideration received or accruing as a result of transfer of capital asset. Therefore for the purpose of computation of Capital Gains irrespective of the actual consideration received or accruing on transfer of the capital asset being land or building or both the full value consideration will be adopted as the valuation for the purpose of stamp duty valued by the stamp valuation authority. In the case on hand the assessee has purchased the property in question and therefore the provisions which are meant for computation of capital gains and deemed consideration cannot be applied as it is only for the receipt or accruing amount in the hand of the seller as a result of capital asset. Therefore the said provision cannot be applied in assessing the income under Section 69 of the Act. It is pertinent to note that an amendment in this regard has been brought to the provision of section 56(2)(vi) w.e.f. 1.4.2010 therefore, the said provision is also not applicable for the year under consideration. Thus the addition is not justified and the same is deleted. Assessee appeal allowed.
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