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2008 (4) TMI 530 - ITAT DELHIDeemed income under "House Property" - Allowability of vacancy allowance u/s 24(1)(ix) - Determining the ALV of residential house lying vacant during the year u/s 23 - HELD THAT:- On perusal of the Section 24(ix), it is clear that it has two limbs, If we apply the second limb of the provision, then it will be found that it applies in a case where the assessee is owner of a larger property comprising of various parts. For attracting the second limb, two conditions are to be satisfied : (1)That the assessee is owner of a property comprising of various parts; and (2)That out of the various parts, one or some part should be vacant. If these two conditions are satisfied, then vacancy remission is to be allowed as per the provisions contained in section 24(1)(ix), i.e., proportionate to the period during which such part is wholly unoccupied. The issue relating to the construction of the term ‘property is let’ came before the Mumbai Bench of the ITAT in the case of Premsudha Exports (P.) Ltd.[2007 (5) TMI 348 - ITAT MUMBAI]. In that case the assessee-company held property for the purpose of letting out. However, the property could not be let out despite efforts and the property remained vacant throughout the year. As the object of the company was to acquire the property from letting out and further since all efforts were made to let it out, the Bench found that the property was to be held as let out property. According to the Bench, therefore, the annual letting value of the property was to be worked out as per section 23(1)(c) and as per this clause, the rent received or receivable during the year was nil and as such the same is to be taken as annual value of the property. Thus, according to the Bench, expression ‘property is let’, appearing in clause (c) of section 23(1) does not mean that the property should have been actually let in the relevant previous year or any time during the relevant previous year. The ITAT Delhi Bench ‘I’ in the case of Kamal Mishra v. ITO [2007 (8) TMI 484 - ITAT DELHI] has also considered a similar case. In that case also the assessee was owning certain property which was let out till December 2000 and after that the property was lying vacant till April 2002. Hence, the property was vacant. The assessee computed annual letting value of the property as per provisions of section 23(1)(c). The issue was as to whether the assessee was justified in adopting the ALV of the property as per the provisions of section 23(1)(c). The Bench upheld the claim of the assessee. In view of the above two authorities and on the facts and circumstances of this case, the claim of the assessee is maintainable. In the instant case, there is no dispute that the building held by the assessee was one building having common ‘in’ and ‘exit’ points and several common facilities and services. Thus, in our considered opinion, the vacancy remission claimed by the under section 24(1)(ix) is to be allowed. Therefore, the order of the learned CIT(Appeals) on the issue in question is set aside and the matter is decided in favour of the assessee. Accordingly, grounds taken by the assessee are allowed. In the result, assessee’s appeal is allowed.
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