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2020 (7) TMI 498 - AT - Income TaxNotional rental income on commercial property u/s 23(1)(a) - notional rental income on unsold stock u/s 23(1)(a) - HELD THAT:- In the case in hand a show-cause notice for cancellation of lease was issued on 25.8.2013 and ultimately lease of plot was cancelled vide order dated 31.12.2015, therefore, we find force in the submission of assessee that after issuance of show-cause notice for cancellation of lease on which building was developed, the assessee was not entitled to let out occupied/constructed portion. We find force in the submission of the AR that after issuance of show-cause notice the assessee was not entitled to let out the property. Hence, taxing notional income of unoccupied portion of building on the basis of deemed annual letting value is not justified by the AO - we direct the AO to delete the disallowance. Considering the fact that we have accepted the contention of assessee was legally not entitled to let out the property. As noted that the issue is already been adjudicated by Tribunal in earlier year, wherein it is held that once, there is show cause notice issued to the assessee for cancellation of lease and finally the lease was cancelled vide order dated 31.12.2015 and the same was served to assessee on 01.01.2016. This being impossibility of renting out the property, the AO is not justified to charge notional rent from this property and assess the same as income from house property as deemed income. - Decided in favour of assessee.
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