CLASSIC MALL DEVELOPMENT COMPANY LIMITED ,MUMBAI vs. ASST. COMMISSIONER OF INCOME TAX CIRCLE 6(2)(1), MUMBAI

ITA 2297/MUM/2025Status: DisposedITAT Mumbai19 May 2025AY 2017-18Bench: SHRISAKTIJIT DEY, VICE-PRESIDENTAND SHRI BIJAYANANDA PRUSETH (Accountant Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the assessee's claim for vacancy allowance under Section 23(1)(c) of the Act for the vacant units should be accepted, as the assessee was actively trying to let them out. Therefore, the annual value of these units should be considered 'Nil'.

What were the facts?

The assessee, engaged in managing a commercial complex, did not offer income from 8 vacant units under the head 'income from house property'. The AO treated these units as if let out at expected reasonable rates and made an addition, which was confirmed by the CIT(A).

What were the issues?

Whether income from vacant units in a commercial complex can be taxed based on expected rent under Section 23(1)(a) when the owner is actively trying to let them out, or if vacancy allowance under Section 23(1)(c) should apply.

Which sections of the Income-tax Act were involved?

Section 250,Section 253(3),Section 23(1)(a),Section 23(1)(c),Section 270A

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Cause title — parties, addresses and appearances
IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI‘C’ BENCH BEFORE SHRISAKTIJIT DEY, VICE-PRESIDENTAND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER (Physical Hearing) Classic Mall Development Company Vs. ACIT, Limited, Circle – 6(2)(1), C/o Market City Resources Pvt. Ltd., Mumbai Ground Floor, R. R. Hosiery Building, Shree Laxmi Woolen Mills Estate, Mahalaxmi - 400011 PAN/GIR No: AACCC7309K (Appellant) (Respondent) Appellant by Shri Vijay Mehta, CA Respondent by Shri Rajendra Joshi, Sr. DR Date of Hearing 15/05/2025 Date of Pronouncement 19/05/2025

आदेश / O R D E R PER BIJAYANANDA PRUSETH, AM: This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’)dated 07.01.2025by the Commissioner of Income Tax (Appeals),National Faceless Appeal Centre, Delhi [in short, ‘CIT(A)’]for the assessment years (AY) 2017-18. 2. The grounds of appeal raised by the assessee are as under:

“1. The ld. CIT(A) erred in confirming addition of Rs.37,67,400 made under the head Income from House Property in respect of vacant units during the year.

2.

The ld. CIT(A) erred in passing an ex-parte order u/s 250 of the Income Tax Act, 1961 without providi

The order continues below.

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