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Ca Siddharth Mehta (Querist)
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07 February 2012 Cute Look Premises, a partnership firm owning 10 Flats at Ghatkopar and Mulund has
given these flats on rent to Healthy Look Private Limited. They entered in the lease
agreement from 01.04.2010 to 28.02.2011 for a monthly rent of Rs. 25,000 per flat with
Rs. 2 Lac Deposit per Flat.
On 30.06.2010 Cute Look Premises has received letter from Healthy Look Private
Limited stating they do not need 1-1 Flat each at Ghatkopar and Mulund. They will stop
payment of lease rent from 01.07.2010 onwards and will settle account and give
peaceful vacant possession of flats at the expiry of 11 Month as per agreement. They
have not asked for refund of their Deposit of Rs. 2 Lac for each vacant flat.
While filing income tax return for AY 2011-12, Cute Look Premises, wants to file their
return of income offering actual rents received (excluding the vacant flats) as
(25,000*2*3 + 25,000*8*11) 23,50,000/-
is this Correct?

CA. Hari Kishan

CA. Hari Kishan (Expert)
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07 February 2012 I am of the following opinion:
1. If the income is being offered under the head income from business or profession, then the income shall be the actual rent received.

2. If the income is being offered under the head income from house property then deemed fair rental value of the vacant premises needs to considered for the income tax computation purposes.

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