TMI Blog2012 (3) TMI 571X X X X Extracts X X X X X X X X Extracts X X X X ..... s 23(1) of the Act only with regard to the house property and the land appurtenant thereto and accordingly, the value if any required to be assessed was in accordance with the value submitted by the appellant. 4. On the facts and in the circumstances of the case, the ld. CIT(A), erred in arriving at a conclusion that the municipal valuation is to be disregarded in the calculation of annual value. 5. On the facts and in the circumstances of the case, the ld. CIT(A), failed in adopting the cost of acquisition of the entire property for the purpose of annual value without excluding the extent of cost related to cost of the unexploited land i.e, the land in excess of the appurtenant land. Even, when the annual letting value was required to be computed, on the cost of investment. 6. Without prejudice, the additions made by the ld. CIT(A) is arbitrary, unreasonable and excessive and ought to be deleted. 7. For these and such other grounds that may be urged at the time of hearing of this appeal, the appellant prays that the appeal may be allowed. 3. From the above grounds, it is gathered that the only grievance of the assessee relates to the addition made by the AO and con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roperty was never let out and remained vacant all along and subsequently also. The AO also observed that even if the assessee had purchased the property with an intention of letting out, the said property was never let out and as such was not eligible for vacancy allowance u/s 23(1)(c) of the Act. According to the AO, the provision of sec. 23(1)(a) of the Act were clearly attracted to the case of the assessee. The AO worked out the annual value of the property at ₹ 18,75,000/- and after allowing the deduction u/s 24 of the Act, @ 30%, determined the taxable annual value at ₹ 13,12,850/-, which was brought to tax as income from house property. 6. The A.O referred the following case laws : 1) Govindoss Purushothamdoss, 124 ITR 319 (SC) 2) J.K Investors (Bombay Ltd.,) 248 ITR 723 (Bom) 3) MAE Packs, 230 ITR 60 (Bom) 4) Darshana Mehta, 33 ITD 670 (Bom) 5) Shreela Kaushik, 131 ITR 435 6) Deewan Daulat Raj Kapoor, 122 ITR 700 (SC) 7. The assessee carried the matter to the learned CIT(A) and challenged the addition made by the AO. The learned CIT(A) observed that the property purchased by the assessee was used to be let out, however the same could not b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... earned counsel for the assessee. 11. After considering the submissions of both the parties and material on record, it is noticed that a similar issue has been adjudicated by this Bench of the Tribunal having same constitution in the case of Smt. Shakuntala Devi (cited Supra), wherein the relevant finding has been given in para 8, which reads as under: 8. We have considered the submission of both the parties and carefully gone through the material available on record. In the present case, it is not in dispute that the properties in question were earlier let out but remained vacant and could not be let out for the year under consideration since those were inhabitable. A similar issue has been adjudicated by the ITAT, Lucknow Bench B in the case of Smt. Indu Chandra Vs. DCIT (supra). In the said case, one of us (AM) is the signatory. In the case of Smt. Indu Chandra (supra), addition which was made in similar circumstances, was deleted by following the decision of the ITAT, Mumbai Bench C in the case of Premsudha Exports (P) Ltd. Vs. ACIT (2008) 110 ITD 158 6 ITA No.1524Bang/10 (Mum) and the relevant findings have been given in para 11 and 11.1 of the order dated 29.4.2011 w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... for a property to fall within the purview of clause (c) of section 23(1). [Para 15] From a reading of the provisions of sub-section (3) of section 23, it appears that the Legislatures in their wisdom have used 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 be no need to use the word 'actually' in subsection (3) of section 23. Regarding the scope of referring to actual letting out in preceding period, there was no force in the contention of the revenue, as the Legislature has used the present tense. Even if it is interpreted so, it may lead to undesirable result because in some cases, if the owner has let out a property for one month or for even one day, that property would acquire the status of 'let out property' for the purpose of clause (c) of section 23(1) for the entire life of the property, even without any intention to let it out in the relevant year. Not only that, even if the property was let out at any point of time even by any previous owner, it could be claimed that the property is let out property because the clause talks about ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... In our opinion the aforesaid referred to case is on the same facts, so respectfully following the decision of the co-ordinate Bench in the case of Premsudha Exports (P.) Ltd. vs. ACIT, C.C.- I0,Mumbai (supra), we are of the view that since the rent received or receivable from the property in question during the year was nil, the same was to be taken as the annual value of the property in order to compute the income from house property as provided in section 23(1)(c) of the Act. We, therefore, set aside the order of the learned CIT(A) and the grounds of appeal Nos.5, 6 7 raised by the assessee are allowed. In the present case, the facts involved are similar to that of Smt. Indu Chandra (supra). So, respectfully following the order of co-ordinate bench B of ITAT, Lucknow in the aforesaid referred to case, we set aside the order passed by the learned CIT(A) and the addition made by the Assessing Officer and sustained by the learned CIT(A) is deleted. 12. Since the facts of the present case are similar to the facts involved in the case of Smt. Shakuntala Devi (cited Supra), so, respectfully following the aforesaid order of this Bench of Tribunal, the issue is decided in fav ..... X X X X Extracts X X X X X X X X Extracts X X X X
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