Addition of notional rental income unsustainable when property let out earlier was vacant whole year
Case Law Details
Asfa Technologies & BPO Pvt. Ltd. Vs ITO (ITAT Chennai)
Held that provisions of section 23(1)(c) are applicable when the property was let out for two or more years, however, was vacant for the whole previous year. Accordingly, income tax on rental income on a notional base doesn’t apply.
Facts-
The assessee’s source of income is rental receipts. Assessee filed its ROI for AY 2013-14 admitting loss of Rs. 74,61,184/- under the head ‘income from house property’. During the assessment proceedings, AO noticed that the assessee had adopted gross annual value at Nil for the property, as the same was vacant throughout the year. AO computed annual value of the property as per provisions of section 23(1)(a) and determined gross annual value of Rs. 1,15,94,161/- and computed income from house property at Rs. 23,91,146/-.
CIT(A) also uphold the additions. Being aggrieved, the assessee preferred the present appeal.
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