VINAY BHASIN,NEW DELHI vs. ACIT, CIRCLE- 61(1), NEW DELHI

Date of Hearing 17.08.2023 Date of Pronouncement 23.08.2023 ORDER PER SHAMIM YAHYA, AM,

This appeal by the assessee is directed against the order of the Ld.

CIT(A)-20, New Delhi, dated 29.11.2019 pertaining to Assessment Year 2016-17.

2. The grounds of appeal reads as under:-

“1. That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining an addition of a sum of Rs. 10, 95, 669/- on account of addition under section 23 of the Act by holding that assessee - appellant has earned notional rent with respect to three properties being owned by assessee - appellant during the impugned assessment year. 1.1. That the learned CIT (A) while sustaining the addition on account of notional rent with respect to commercial property at Shop No. 504, Goa, has failed to appreciate the fact that the assessee - appellant was not able to let out the said property despite his best efforts for want of tenant and the said property being commercial property, as such the provisions of section 23(4) were not applicable and thus, the addition so made should be deleted. 1.2. That. the learned CIT (A) while sustaining the addition on account of notional rent with respect to vacation house property at 257, Phase - 2, Aldeia De Goa, has failed to appreciate the fact that the assessee - appellant was not able to let out the said property despite his best efforts for want of tenant and further, the addition of 7% of total investment in said propertv as notional rent is without any basis and is also misconceived in law and thus, the addition so made should be deleted. 1.3. That the learned CIT (A) while sustaining the addition on account of notional rent with respect to house property at S - 196, Panchsheel Park, Delhi, has failed to appreciate the fact that the assessee - appellant was not able to let out the said property despite his best efforts for want of tenant and further, the addition of a sum of Rs. 4, 15, 520/- as notional rent is too without any basis and is also misconceived in law and further, without prejudice to the above the deemed rent as worked out by assessee - appellant following the MCD valuation was Rs. 61, 251/-, should have been adopted as deemed notional rent. 1.4 That in doing so, the learned CIT (A) has failed to appreciate the fact that the requisite documents/evidences along with explanations were tendered by assessee, but both the learned AO and CIT (A) have based their decision on preconceived notions and misconceived facts and as such, the addition so sustained should be deleted.

2. That the learned Commissioner of Income Tax (Appeals) has erred in law and on facts in sustaining an addition of a sum of Rs. 35, 000/- on account of addition under section 23 of the Act by holding that assessee - appellant has earned notional rent with respect to the property at 102, 1S Floor, A-5, World Spa, Gurgaon, being owned by assessee - appellant during the impugned assessment year. 2.1. That the learned CIT (A) while sustaining the addition on account of notional rent with respect to the said property, has failed to appreciate the fact that the actual rent received by assessee - appellant was Rs. 4, 90, 000/-(1/2; share) and the same was duly backed by lease deed, email correspondences and ledger account and as such, the addition of a sum of Rs. 35, 000/- is without any basis and misplaced on facts, which needs to be deleted, as such..

CIT(A). The Ld. CIT(A) confirmed the order of the Assessing Officer by observing as under:-

The appellant during appeal hearing submitted that provisions of Sec.24 of the Act are applicable to residential property only and not to commercial property. Therefore, no notional rent u/s 23(1)(a) of the Act should be calculated on shop no.504 Ambrosia, Goa. The appellant is obvious misinformed because for calculation of notional rent u/s 23(1)(a) of the Act there is no distinction between residential property and commercial property. However, the same is not applicable to a property which is issued for the business and profiession of the appellant i.e. for commercial purposes by the appellant. All the properties from which the appellant receives or can receive rent come under Sec. 23(4) of the act the appellant can declare one such property as his residence if he owns more than one property. Therefore the contention of the appellant is misplaced and the notional rent calculated by the Assessing Officer on this property is sustained. The appellant further submitted that the ALV of the property situated at 257, Phase-II, Aldeia de Goa cannot be 7% of the investment and he would submit the Annual Letable Value from the municipal authorities within some time. However, the last date of hearing was 11.11.2019 and till this date i.e. 25.11.2019 the appellant could not produce any ALV of the property. However, as per the description of the property it is a house constructed on a plot of 400 sq. meters. Hence the AL of the property at a place like Goa cannot be less than that determined by the Assessing Officer. The calculation made by the Assessing Officer is sustained. As far as the ALV of the house property situated at S-196, Panchsheel Park, in Delhi is concerned the appellant has submitted the ALV to be Rs. 94,122/- which is astonishingly low in comparison to the size of the property and the location of the property in Delhi. The Assessing Officer has determined the same at Rs. 5,93,600/- which is absolutely reasonable. Hence, the notional rental income from such property of Rs.4,15,520/- as calculated by the Assessing Officer is confirmed.

Order pronounced in the open court on 23rd August, 2023.