Case Law Details
Empire Capital Pvt. Ltd. Vs ACIT (ITAT Mumbai)
The issue under consideration is whether the addition on account of notional rent in respect of vacant property is justified in law?
In the present case, the assessee was let out the property in the past and the rental income from the said property was offered to tax by the assessee under the head, ‘Income fromHouse Property’. It was during the period relevant to assessment year under appeal that the property of the assessee was lying vacant and the assessee did not offer any rental income in the return of income. AO want him to disclosed the notional rent u/s 23 of the Income Tax Act.
ITAT states that a perusal of the statement of profit and loss account for the year ended 31/03/2016 furnished by the ld. Authorized Representative of the assessee reveal that the assessee has received rental income of Rs.2,10,000/-. The ld.Authorized Representative of the assessee has also furnished copy of the assessment order dated 18/12/2018 passed under section 143(3) of the Act for assessment year 2016-17. No addition on account of rental income/ notional rental income has been made by the Assessing Officer in the assessment order. Thus, rental income offered to tax has been accepted by the Assessing Officer. In the past as well the propeprpty under question was let out. It was during the period relevant to assessment year under appeal that the property was lying vacant for which reasons were given by the assessee. In the peculiar facts of the case we are of the considered opinion that no addition on account of notional rent is warranted. The Co-ordinate bench in the case of Sachin R. Tandulkar(supra) in somewhat similar circumstances after applying provisions of section 23(1)(c) of the Act accepted rental income from the vacant property as ‘nil’. In view of the similarity of facts, we find merit in the submissions of the assessee. Accordingly, the impugned order is set-aside and the appeal of assessee is allowed.
FULL TEXT OF THE ITAT JUDGEMENT
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