Laljibhai Godadbhai Chaudhari Vs ITO (ITAT Ahmedabad)
The appeal concerns the Assessment Year 2018-19, where the assessee challenged the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, dated 18 August 2025. The grounds of appeal were: (i) the addition of Rs. 2,82,090 as deemed rental income on two properties, and (ii) disallowance of Rs. 10,13,201 claimed as housing loan interest.
The assessee had filed his return on 30 March 2019 declaring total income of Rs. 29,54,020. During limited scrutiny under the e-Assessment Scheme, 2019, the Assessing Officer (AO) noted that the assessee owned four properties—Devnandan Platina, Dharnidhar Pride, Samatwa Bungalow, and Ambica House—but had disclosed only Devnandan Platina as self-occupied. The AO determined that Samatwa Bungalow and Ambica House were not self-occupied and estimated deemed rent of Rs. 2,82,090 using market data from online property portals. The AO also disallowed the housing loan interest claim of Rs. 10,13,201 on the ground that requisite evidence such as interest certificates and loan documents was not submitted. The assessment under Section 143(3) r.w.s. 144B was completed on 22 May 2021, fixing total income at Rs. 32,36,110.
The assessee appealed to the CIT(A), who upheld both the addition for deemed rent and the disallowance of interest. The assessee then approached the ITAT. The AR argued that online data was an inappropriate basis for determining notional rent and that municipal valuations should have been considered. The AR also contended that the interest deduction under Section 24(b) should be allowed since the deemed rent had been taxed. The DR supported the AO and CIT(A) decisions.
