CHHOTELAL GANGAPRASAD DUBEY,MUMBAI vs. ACIT-24(1), MUMBAI
What did the Tribunal hold?
The Tribunal observed that as per Section 23(4) of the Income Tax Act, if a property is let out, its annual value is to be determined based on reasonable expectation of rent, irrespective of actual receipt. The assessee, being the managing trustee of the tenant trust, did not claim any rental income or take steps to recover it.
What were the facts?
The assessee owned four residential properties, one self-occupied and three let out. The Assessing Officer (AO) determined the annual value of one property, let to Tara Meera Educational Trust, as deemed rent at 3% of its capital value, amounting to Rs.10,23,000. The assessee argued that the rent was not recovered due to the tenant's financial problems.
What were the issues?
Whether the annual value of a property let out to a trust, where the assessee is the managing trustee, can be determined as deemed rent even if actual rent is not recovered, considering Section 23 of the Income Tax Act.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Per Amarjit Singh (AM): This appeal filed by the assessee is directed against the order passed by the ld. CIT(A) NFAC, dated 30.08.2023 for A.Y. 2018-19. The assessee has raised the following grounds before us: “That on the facts and circumstances of the case, the learned Commissioner of Income-tax (Appeal) erred in upholding action of Income Tax officer of adopting deemed rent of let out property at Rs.10,23,000 without considering the facts that property was not lying vacant. Due to acute financial problem at the end of tenant, rent could not be recovered. More over the tenant has also not claimed any expenses on a
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More judgments on Section 23(4)
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- Mohit Vijaykumar Gupta, Mumbai vs The DCIT, Circle-2(1)(1), AhmedabadITA 1091/AHD/2025[2021-22]Status: Disposed6 Nov 2025AY 2021-22
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