Sunil Ramnarayan Mantri Vs DCIT (ITAT Pune)
The Income Tax Appellate Tribunal (ITAT), Pune Bench, has set aside additions made by the Assessing Officer (AO) towards deemed rental income under Section 23(1)(a) of the Income Tax Act, 1961, in the case of Sunil Ramnarayan Mantri vs DCIT. The Tribunal allowed the assessee’s appeals for Assessment Years (AYs) 2016-17 and 2017-18, holding that the conditions of Section 23(1)(c) were satisfied as the property had been let out earlier and was vacant during the relevant years.
Background
The assessee owned commercial premises at Dev Arcade Mall, Ahmedabad. He filed returns declaring income of ₹1.57 crore (AY 2016-17) and ₹30.48 lakh (AY 2017-18). During scrutiny, the AO noted that the assessee had received only ₹60,000 rent, allegedly for a short period between March–April 2016.
The assessee submitted evidence, including a tenant’s confirmation, mall management letter, and newspaper advertisements for leasing. The AO, however, doubted the genuineness of the lease since rent was received in cash, no formal agreement was executed, and no police intimation was given. Based on market rent estimates, he determined the annual letting value (ALV) at ₹75.48 lakh and added ₹52.83 lakh (after standard deduction) under “Income from House Property”.
