SHAKIR HUSSAIN QURESHI,MUMBAI vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE 8(2) MUMBAI, MUMBAI

The Ld. Commissioner, after considering the peculiar facts and circumstances of the case, held that since the property was neither self-occupied, as the Assessee had another self- occupied property, nor rented out during the year under consideration, the property squarely fell within the ambit of section 23(1)(a) of the Act. The Ld. Commissioner further held that the Ld. AO was justified in determining the annual lettable value on the basis of the rent receivable in the immediately succeeding period. Consequently, the Ld. Commissioner upheld the addition and dismissed the appeal of the Assessee. 9. Thus, the Assessee, being aggrieved, has preferred the instant appeal. 10. We have heard the parties and perused the material available on record and considered the rival submissions. The Assessee, at the outset, relied upon copies of the rent agreements pertaining to F.Ys. 2018-19 and 2022-23, as well as a letter dated 21.04.2022 issued by the property broker, namely, Mr. Moosa Munir Qureshi. By the said letter, the property broker certified that continuous efforts had been made to find prospective tenants for the property of the Assessee, including sharing the property details with potential clients, arranging site visits with interested parties and holding discussions and negotiations with prospective tenants. However, due to market conditions, high rental expectations and the non-availability of suitable tenants, the property could not be rented out during the relevant period and remained vacant. 11. The Assessee also drew our attention to the affidavit dated 23.04.2026, wherein it was, inter alia, claimed that the property had been held with the intention of letting it out during F.Ys. 2019-20, 2020-21 and 2021-22 and thereafter. Further the property had neither been used for personal residence nor for any other personal purpose. The Assessee had allegedly made continuous and bona fide efforts to let out the property, including engaging property brokers, listing the property on rental platforms and negotiating with prospective tenants. However, due to market conditions and the non-availability of suitable tenants, the property remained vacant, either for the whole year or for part of the year, during the relevant financial years. Consequently, no rent was received or receivable during the period for which the property remained vacant. Further the property was always available for letting out and had not been withheld for personal use or for any other purpose. 12. We observe that the aforesaid documents placed at page Nos. 38 to 40 of the paper book, including the letter issued by the property broker, Mr. Moosa Munir Qureshi, and witnessed by Mr. Sakil Hussain Qureshi, were not made available before the authorities below. Therefore, the authorities below had no occasion to examine the genuineness and evidentiary value of the said documents, while deciding the issue against the Assessee. 13. At this stage, the Assessee relied upon the decisions of the Coordinate Benches of the Tribunal in the cases of Classic Mall Development Company Ltd. v. Assistant Commissioner of Income-tax, (2025) 173 taxmann.com 94 (Mumbai-Trib.) and Sachin R. Tendulkar v. Deputy Commissioner of Income-tax-23(3), Mumbai, (2018) 96 taxmann.com 253 (Mumbai-Trib.). In Sachin R. Tendulkar case {supra}, the Coordinate Bench had considered the efforts made by the assessees to find suitable tenants and the fact that, despite approaching the concerned builders or property dealers, suitable tenants could not be found and the properties remained vacant throughout the relevant years. Considering the efforts made for letting out the properties, the Coordinate Benches ultimately deleted the identical additions. 14. Coming to the instant case, from the letter dated 21.04.2022 issued by Mr. Moosa Munir Qureshi, it appears that efforts had been made to let out the property of the Assessee by sharing the property details with potential clients, arranging site visits and holding discussions and negotiations with prospective tenants. However, it remained an admitted fact that the said letter was never brought to the notice of the authorities below, though the proceedings remained pending from the year 2023 till February 2026. Therefore, the said letter required proper verification by the Ld. AO. 15. Further, though the Assessee claimed that property brokers had been engaged, the property had been listed on rental platforms and negotiations had been held with prospective tenants, however, no complete details of the property brokers, the websites or rental platforms, on which 5 the property had been advertised and the prospective tenants with whom negotiations had been held, were furnished/produced before the authorities below. Such details were also essential for the proper determination of the issue under consideration. 16. Thus, considering the peculiar facts and circumstances in totality, for the just and proper adjudication of the case and in the interest of substantial justice, we deem it appropriate to afford one opportunity to the Assessee to substantiate its claim before the Jurisdictional Assessing Officer, as also suggested by the Ld. DR. 17. Accordingly, the case is remanded to the file of the Jurisdictional Assessing Officer for decision afresh. Suffice it to say that the Ld. AO shall afford a reasonable opportunity of being heard to the Assessee before deciding the issue in accordance with law. 18. We clarify that the onus shall be upon the Assessee to substantiate its claim by furnishing relevant evidences and to produce the respective persons, if requires so.”