Mohit Vijaykumar Gupta Vs DCIT (ITAT Ahmedabad)
ITAT Ahmedabad Deletes Deemed Rent on 5 Flats – Accepts Genuine Vacancy Claim but Upholds Addition on Office Property
Assessee, an individual, filed a return declaring income of ₹10.60 crore. The case was selected for scrutiny due to large capital gain deductions claimed u/s 54, 54B, 54EC, 54EE, 54F, 54G, 54GA, & 54GB. AO assessed income at ₹11.02 crore after making three additions – (i) ₹21.03 lakh under long-term capital gains, (ii) ₹7.43 lakh as deemed rent on five vacant flats in Mumbai, & (iii) ₹13.86 lakh as deemed rent on an office property at Andheri, Mumbai. CIT(A)/NFAC confirmed both the rent-related additions.
Issue 1 – Deemed Rent on Five Flats
AO held that the five Mumbai flats remained vacant for years without any evidence of efforts to let them out, hence section 23(1)(c) benefit was denied. Assessee explained that during FY 2020–21 (pandemic period), genuine efforts were made to rent them out through brokers, but they remained vacant due to market slowdown & were ultimately sold in the same year. Supporting judicial precedents such as Premsudha Exports (P.) Ltd. v. ACIT [(2008) 110 ITD 158 (Mum.)] & Sachin R. Tendulkar v. DCIT [ITA No. 3755/Mum/2016] were cited, emphasizing that “intention to let” & bona fide efforts suffice even without actual tenancy.
