Annual Lettable Value of vacant property held as stock-in-trade is computed at NIL

Sugam Realty Limited Vs DCIT (ITAT Kolkata)

ITAT Kolkata held that as per provisions of section 23(1)(c) the annual lettable value of the vacant property of unsold units/flats held as stock-in-trade by the assessee but remained vacant during the year is to be computed at Rs. NIL.

Facts- The assessee is a private limited company engaged in the business of construction of properties. AO noticed that the assessee company owns various units as stock-in-trade and rent received from some of such flats has been offered to tax under the head ‘income from house property’. AO noticed that there are certain units which remained vacant throughout the year but the assessee failed to declare notional rent on such vacant units. AO thereafter, mentioned the provisions of Section 23 of the Act and by applying Section 23(4) of the Act, computed the notional rent of the vacant units at Rs. 78,86,256/- [Notional Rent of Rs. 1,12,66,080/- (-) Standard Deduction of Rs. 33,79,824/-]. Income assessed at Rs. 1,07,16,838/-.

CIT(A) dismissed the appeal of the assessee. Being aggrieved, the present appeal is filed.

Conclusion- Considering the provisions of Section 23(1)(c) of the Act which in our considered view is applicable to the assessee, the annual lettable value of the vacant properties is to be treated as NIL as the assessee is eligible for vacancy allowance.

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