Section 23 of the IT Act, 1961 - Income from house property - Annual value

Last updated: 24 September 2007

Court :
In the ITAT, MUMBAI BENCH ‘C’

Brief :
Section 23 of the Income-tax Act, 1961 - Income from house property - Annual value - Assessment year 2003-04 - Whether words ‘property is let’ as appearing in section 23(1)(c) means actual letting out of property - Held, no - Whether if a property is held with an intention to let out coupled with efforts made for letting it out, it could be said that, such a property is a let out property and, therefore, its annual letting value would be worked out as per sub-clause (c) of section 23(1) - Held, yes Words and Phrases:- words ‘property is let’ as appearing in section 23(1)(c) of the Income-tax Act, 1961 FACTS The assessee-company was engaged in the business of export of diamonds. As per the memorandum of association, the assessee was also entitled to purchase the property for its let out and to earn rental income. The assessee had purchased a property. During the previous year, the said property remained vacant, though the assessee made its continuous efforts to let out the property. The assessee submitted that the annual letting value (ALV) of the property should be computed as per provisions of clause (c) of section 23(1), and that since the property remained vacant for the whole year, the ALV of the property had to be taken as. The Assessing Officer did not deliberate on the submission of the assessee and computed the ALV of the impugned property as per clause(a) of section 23(1) and determined at 8.5 per cent of the cost of property. On appeal, the Commissioner(Appeals) upheld the action of the Assessing Officer. On second appeal:

Citation :
Premsudha Exports (P.) Ltd.. v. Assistant Commissioner of Income-tax, Central Circle 10, Mumbai Sunil Kumar Yadav, Judicial Member and A.K. Garodia, Accountant Member IT Appeal Nos. 6277 & 6278 Mum of 2006 [Assessment Year 2003-04]