Client purchased a house property which had 2 floors, ground floor and first floor, availing bank loan. Rent was derived from ground floor on letting out. First floor was still occupied by seller of the building throughout the year (for reason of some dispute or to get time to shift) and hence it was not let out. Assessee did not also get any compensation from the seller for occupying the first floor. In the IT return, assessee offered the rent for ground floor and nil annual value for first floor. Bank interest was equally divided and claimed for these 2 floors. Thus, loss was returned for first floor (set off against income from ground floor). ITO rejected interest claim for first floor since no rent was offered. Assessee cited provisions of Sec 23(1)( c) whereby he can show nil rent, if no rent is realised, and claim relatable interest u/s 24. ITO is not accepting this. Is ITO’s stand tenable?. Please provide any relevant case law, especially after amendment of Sec 23 wef 01-04-2002
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