TMI Blog2008 (4) TMI 530X X X X Extracts X X X X X X X X Extracts X X X X ..... ore 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 certai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tions of the building and parking area respectively which were vacant during the year by placing reliance on the decision of the Kerala High Court reported in 151 ITR 9 in the case of CIT v. Joy P. Jacob (which, we understand, has not reached its finality yet). 3. ( a ) Whether, on the facts and in the circumstances of the case, the Assessing Officer and CIT(A) were right in holding that the vacant parts of the building had an annual value in accordance with section 23 of the Income-tax Act ? ( b ) Whether, on the facts and in the circumstances of the case, the Assessing Officer and CIT(A) were right in denying the appellant assessee vacancy allowance under section 24(1)( ix ) of the Income-tax Act." 5. The issue involved in these grounds relates to the allowability of vacancy allowance in the case of the assessee. 6. Before taking up the issue involved in the grounds referred to above, we consider it proper to narrate the facts in brief, which are as under : 6.1 The assessee-firm owned a property, known as "Gateway Tower" in DLF City, Phase-III, Gurgaon. It is a multi-storey commercial building comprised of basement and upper floors. The assessee computed its i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 15-7-2000 to 1,591,384 2,246,664 Int. (P.) Ltd. 31-3-2001 5th 4,158 Vacant For Whole Year 6th 8504 Svedala 40 Full period 8,163,840 8504 Industry Total 17008 India Pvt. Ltd. 9th 8,504 Vacant for Whole Year 10th 8,501 Free 40 1-8-2000 1,360,160 4,800,481 Market to 31-3-2001 Service 11th 8,491 Cargil 40 Full period 8,343,600 India Ltd. 12th 7,698 Total 24 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ore the learned CIT(Appeals). It was submitted before him that the assessee had computed the annual letting value in accordance with the provisions of section 23 which included the annual letting value of the vacant parts of the building and once annual value is so determined, deduction allowable under section 24 would follow. According to the assessee, since the annual value has been computed as per law, deduction under section 24(1)( ix ) has to be allowed. The learned CIT(Appeals) also did not find force in the submission of the assessee and confirmed the order of the Assessing Officer. 7. Before us, the learned counsel for the assessee Shri Pradeep Dinodia submitted that the building of the assessee was a commercial building, comprising of basement and upper floors, having common in and exit points. The building was provided with numerous common facilities and services, including common passage, elevators, lifts, stairs and ramps, centrally air-conditioning system, stand-by generators, fire escape systems, electricity and water etc. Thus, it is a compact building and each floor level is inter-connected and thus for the purpose of letting out, it was one building. Accord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns 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. 9.3 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. 9.4 The provision of section 24(1)( ix ) was subsequently amended and was replaced by section 23(1)( c ), which is as under : "Sec. 23(1)( c ). Where the property or any part of the property is let and was vacant during the whole or any part of the previous year and owing to such vacancy the actual rent received or receivable by the owner in respect thereof is less than the sum referred to in clause ( a ), the amount so received or receivable." 9.5 The term property is let appears in the amended provision also as it appears in the old provision contained under section 24(1)( ix ). As the same terminology appears in the old provision as well as in the new provision, the interpretation placed on the term property is let under the amended provision can be adopted for construing t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cepted, then no remission can be claimed because there is no earlier period in that case prior to the start of the relevant previous year. After rejecting the contentions of the department, the Bench observed as under : "This cannot be the intention of the words house is actually let . This shows that the words property is let cannot mean actual letting out of the property because had it been so, there was no need to use the word actually in sub-section (3) of the same section 23. These words do not talk of actual let out also but talk about the intention to let out. If the property is held by the owner for letting out and efforts were made to let it out, that property is covered by this clause and this requirement has to be satisfied in each year that the property was being held to let out but remained vacant for whole or part of the year. The words property is let are used in this clause to take out those properties from the ambit of the clause in which properties are held by the owner for self-occupation, i.e., self occupied property ( i.e., SOP) because even income on account of SOP, excluding one such SOP of which annual value is to be adopted at nil , is also to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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