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2015 (3) TMI 1355 - AT - Income TaxDetermination of Annual value - income from house property - Undisclosed rental income in view of the provisions of section 23(1) - HELD THAT:- CIT (Appeals) correctly decided the issue. He has clearly met with the contention that different view has not been taken in the case of Shri Manoj Singla. CIT (Appeals) has reproduced the contents of the appellate order in the case of Manoj Singla in para 7 and reading of the same clearly shows that in the case of Manoj Singla the learned CIT (Appeals) observed that B-7 Preet Vihar property is commercial property and is not covered by the provisions of section 23(4) of the Act. As far as Bombay flat is concerned, since the assessee has shown rental income in the earlier years, therefore, the income has to be charged. As observed by the learned CIT (Appeals), therefore, it becomes clear that even in the case of Manoj Singla it was never held that if the property was never let out, then no income can be charged. Once the expression "might" is used in section 23(1)(a), it becomes clear that what is required to be charged is the notional income because the basis of the charge of income is annual value. See BIMAN BEHARI SHAW SHEBAIT. [1967 (7) TMI 29 - CALCUTTA HIGH COURT] It is not necessary that the property has been let out for computing the annual value because what is required under section 23(1)(a) of the Act is a sum for which property might be let out. In case of let out properties section 23(1)(b) of the Act is applicable which talks of annual rent received or receivable. Where the property remains vacant for the whole year, in that case, nil value is to be computed or notional value of rent is to be computed? - As pointed out by the learned CIT (Appeals), section 23(1(c) of the Act clearly stipulate the situation where the property has been let out that being if some property is rented out and the tenants leaves, then section 23(1)(c) of the Act would get activated. But ff the property has never been let out, then the provisions cannot be invoked because section 23(1)(c) of the Act is clearly applicable where the property was let out. Therefore, in our opinion, the learned CIT (Appeals) has rightly interpreted the provisions of section 23(1)(c) of the Act. Clearly, the property for which notional income has been computed by the Assessing Officer was never let out by the assessee, therefore, section 23(1)(c) of would not be applicable. Dispute seems to be the value on which the notional value is to be computed whether this should be municipal ratable value or the standard rent as per the Local Rent Control Act, whichever, is higher. Therefore, the facts were quite distinguishable and in our opinion this decision is not applicable. We find nothing wrong with the order of the learned CIT (Appeals) and confirm the same
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