Case Law Details
Brief- ITAT Mumbai held in case of ACIT vs. Suryashankar Properties Limited that Intention of letting out the property is to be seen for invoking clause (c) of section 23(1) for computing the annual letting value of the property and it is irrelevant whether the property is/was let out.
Brief Facts of the Assessee:
The Assessee Company is formed with the object of acquiring immovable property (“the property”) to be let out but the property was not let out during the financial year under consideration. The Assessee Company had claimed certain expenditure including interest which was laid out for the purpose of assessee’s business. The Assessee computed the income under the head “Income from House property” by considering the annual value from the property as Nil and also carried forward the loss as provided for in Section 71B of the Income Tax Act, 1961 (“The Act”).
The Assessing officer however rejected the assessee’s claim of ascertaining annual value of the property as Nil as per section 23(1)(c)and consequently disallowed interest paid by treating the same as pre-operative expenditure and by contending that the pre-operative expenses can be claimed under section 35D of the Act and thereby also disallowed the claim of the assessee for carry forward of loss under the head Income from House Property” as provided for in Section 71B of the Act.
Held by CIT (A):
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