“annual letting value”

Income HeadsSection 23Section 23238 judgments

The decision most relied on for annual letting value is Chennai Properties & Investments Ltd. v. CIT (373 ITR 673), cited in 381 judgments on BharatTax.

Leading authorities on annual letting value

Chennai Properties & Investments Ltd. v. CIT

373 ITR 673 · 2015 · Supreme Court

381

citing judgments

Income from immovable property, such as unsold flats or shops, held by an assessee as stock-in-trade in their business of acquiring and holding properties is taxable as 'business income' and not 'income from house property'. Consequently, notional annual letting value under Section 23 cannot be attributed to such stock-in-trade.

CIT v. Ansal Housing Finance & Leasing Co. Ltd.

354 ITR 180 · 2013 · High Court

208

citing judgments

Annual Letting Value (ALV) of unsold stock-in-trade flats/shops held by a real estate developer can be assessed under Section 22 of the Income Tax Act, 1961, as income from house property. This approach was followed by the Assessing Officer (AO) based on this decision.

CIT v. Tip Top Typography

368 ITR 330 · 2014 · High Court

161

citing judgments

For computing income from house property, the Annual Letting Value (ALV) cannot be arbitrarily estimated by the Assessing Officer, but must be determined based on the Municipal ratable value of the property.

CIT v. Moni Kumar Subba

333 ITR 38 · 2011 · High Court

citing judgments

Notional interest on an interest-free security deposit cannot be considered as actual or deemed rent under Section 23(1) of the Act. For determining Annual Letting Value (ALV) under Section 23(1)(a), it must be in accordance with municipal laws, considering extraneous circumstances, but not exceeding the standard rent as per rent control legislation.

CIT v. Bhaskar Mitter

73 Taxmann 437 · 1994 · High Court

citing judgments

The annual letting value of a property can be determined at a figure lower than that returned by the assessee if the returned value is not in accordance with the principles for determining annual letting value under section 23. Assessees can contend for a value based on the correct application of law.

Smitaben N. Ambani v. CWT

323 ITR 104 · 2010 · High Court

citing judgments

The annual value of a self-occupied property, for both wealth tax and income tax purposes, is the reasonable rent expected from a hypothetical tenant. When using municipal ratable value, statutory deductions permissible under municipal law must be added back to arrive at this expected rent.

Premsudha Exports (P.) Ltd. v. ACIT

110 ITD 158 · 2008 · ITAT

citing judgments

For the purpose of computing income from house property, the annual value under Section 23 must be determined even if the property is vacant or not actually let out, as the statutory phrase "property is let out" does not necessitate actual letting.

CIT v. Sane & Doshi Enterprises

377 ITR 165 · 2015 · High Court

citing judgments

Rental income from unsold property held by a real-estate developer is assessable under the head 'Income from House Property' and not as 'Business Income'. The treatment in books of account as stock-in-trade does not alter the income's character for tax purposes.

Judgments citing annual letting value

Jeeten Jaysukhlal Mehta, Mumbai vs. DCIT 27(1), Mumbai

Accordingly, Ground No. 1 raised by the Appellant is allowed

ITA 3977/MUM/2023[AY 2021-22]Status: DisposedITAT Mumbai26 Apr 2024

Section 143(3)Section 144BSection 24

same. Whereas, the House Property at serial no. 1 above [hereinafter referred to as `R503′] was treated as self-occupied property with `Nil' Annual Letting Value (ALV). 5. The return filed by the Appellant was taken up for scrutiny. The Assessing Officer completed the assessment under Section 143(3) read ... carried on at any other place and he is to reside at that other place in building not belonging to him and (b) annual letting value of which property is taken as `Nil'. In the present case R503 was actually self-occupied during the relevant previous year

Amanda Joy Puravankara, Bengaluru vs. Assistant Commissioner of Income Tax, Central Circle-1(4), Bengaluru

In the result, appeal of the assessee is allowed

ITA 109/BANG/2024[2015-16]Status: DisposedITAT Bangalore10 Apr 2024AY 2015-16

Bench: Shri George George K. & Shri Chandra Poojariassessment Year: 2015-16

For Appellant: Shri Narendra Sharma, A.RFor Respondent: Shri Ganesh R. Ghale, Standing Counsel for Revenue

Section 143(3)Section 23(1)(c)Section 234CSection 250

that the intention of letting out the property was to be seen for invoking clause (c) of section 23 (1) for computing the annual letting value of the property and it was irrelevant whether the property is/was let out. [Para II] Therefore, the sole dispute, in the instant case ... let out property in terms of observations made in foregoing paras. Since the property had been held to be let out property, its annual letting value could only be worked out as per clause (c) of section 23 (1) and since the rent received or receivable from the said property

La Kozy Builders LLP, Mumbai vs. Asstt. Commissioner of Income Tax Circle-21(2), Mumbai

In the result, appeal filed by the assessee is allowed for statistical

ITA 2954/MUM/2023[2016-2017]Status: DisposedITAT Mumbai03 Apr 2024AY 2016-2017

Bench: Shri Aby T Varkey, Hon’Ble & Shri S. Rifaur Rahman, Hon'Ble

Section 143(1)Section 143(2)Section 23Section 23(5)Section 5

case of Ansal Housing Finance & Leasing Co. Ltd., held that when the inventory of flats held as stock in trade, the notional annual letting value cannot be computed on such flats. 2) Whether on the facts and circumstances of the case and in law, The Learned CIT(A) was correct ... referred before the Hon’ble High Court was as under: "Whether the assessee was liable to pay income tax on the annual letting value of unsold flats owned by it under the head "income from house property"? 15.1. There the facts relevant to the issue raised relate to the addition

DCIT 14(1)(1), Mumbai, Aayakar Bhawan vs. Neelkanth Urban Developers Pvt. Ltd, Mumbai

ITA 2408/MUM/2023[2017-18]Status: DisposedITAT Mumbai26 Mar 2024AY 2017-18

Section 143(3)Section 23Section 23(1)(a)Section 23(5)

referred before the Hon'ble High Court was as under; “Whether the assessee was liable to pay income tax on the annual letting value of unsold flats owned by it under the head

Kushal Das Dayaram Manghanani, Hyderabad vs. ACIT, Circle-5(1), Hyderabad

In the result, the appeal of the assessee is allowed for statistical purposes

ITA 486/HYD/2023[2014-15]Status: DisposedITAT Hyderabad22 Mar 2024AY 2014-15

Bench: Shri R.K. Panda & Shri Laliet Kumarassessment Year: 2014-15 Kushal Das Dayaram Vs. The Assistant Commissioner Of Income Tax, Manghanani, Circle – 5(1), Hyderabad. Hyderabad. Pan : Agbpm9633N (Appellant) (Respondent) Assessee By: Shri M.V. Joshi, C.A. Revenue By: Ms. Sheetal Sarin, Sr. Ar. 20.03.2024 Date Of Hearing: Date Of Pronouncement: 22.03.2024

For Appellant: Shri M.V. Joshi, C.AFor Respondent: Ms. Sheetal Sarin, Sr. AR

Section 142(1)Section 143(3)Section 23(1)(a)Section 250Section 263

relevant previous year therefrom. Learned PCIT has directed the Assessing Officer to apply section 23(1)(a) of the Act and determine the Annual Letting Value (ALV) of the rented premises. We find no reason to sustain all these directions for the reason that learned CIT’s impugned order

Bharat Dewakinandan Agarwal, Pune vs. ACIT, Circle-13, Pune.

In the result, the appeal of assessee is partly allowed for statistical purpose

ITA 884/PUN/2023[2016-17]Status: DisposedITAT Pune20 Mar 2024AY 2016-17

Bench: Shri Om Prakash Kant & Shri S.S. Viswanethra Ravi

For Appellant: Shri V.L. JainFor Respondent: Shri Ramnath P. Murkunde

Section 143(2)Section 143(3)Section 23(1)Section 23(1)(a)Section 24

adopted annual municipal value as deemed rent for the subjected property. The AO 4 ITA No.884/PUN/2023, A.Y. 2016-17 rightly determined the annual letting value for subjected property taking into consideration the average value of other properties which are situated in the same premises. The CIT(A) correctly held ... same as valid. Regarding other properties in No. 1 and 2 situated in building the assessee failed to submit the workings for annual letting value and the AO rightly compared the ALV taking into consideration the similar properties in the same area. The CIT(A) correctly held the same

Jt. CIT (OSD) - 2 (3)(1), Mumbai vs. Tata Sons Private Ltd., Mumbai

In the result, appeal of the Revenue is dismissed

ITA 1349/MUM/2019[2012-13]Status: DisposedITAT Mumbai15 Mar 2024AY 2012-13

Bench: Shri Vikas Awasthy& Shri S.Rifaur Rahmanआअसं. 1093/मुं/2019 (नि.व. 2012-13)

towards amenities and maintenance of facilities like salaries, security charges, electricity, etc. and the same was claimed as deduction from Annual Letting Value(ALV). The Assessing Officer disallowed the claim of assessee. The assessee carried the issue in appeal before the CIT(A). The CIT(A) following the order

Tata Sons Pvt. Ltd, Mumbai vs. CIT (A)-58, Mumbai

In the result, appeal of the Revenue is dismissed

ITA 1093/MUM/2019[2012-13]Status: DisposedITAT Mumbai15 Mar 2024AY 2012-13

Bench: Shri Vikas Awasthy& Shri S.Rifaur Rahmanआअसं.1093/मुं/2019(िन.व. 2012-13) Tata Sons Private Limited, Bombay House, 24, Homi Mody Street, Fort, Mumbai 400 001. ...... अपीलाथ"/Appellant Pan: Aaact-4060-A बनाम Vs. The Commissioner Of Income Tax (Appeals)-58, Jcit, Room No.552, Aaykar Bhavan, M.K.Road, ....."ितवादी/Respondent Mumbai – 400 020 आअसं.1349/मुं/2019 (िन.व. 2012-13) Jt.Cit (Osd)-2(3)(1), Mumbai Room No.552, 5Th Floor, Aaykar Bhavan, M.K.Road, ...... अपीलाथ"/Appellant Mumbai – 400 020 बनाम Vs. Tata Sons Private Limited, Bombay House, 24, Homi Mody Stree, Fort, Mumbai 400 001. ....."ितवादी/Respondent Pan: Aaact-4060-A अपीलाथ""ारा/Appellant By : Ms. Arati Vissanji & Ms. Aastha Shah, Advocates. "ितवादी "ारा/Respondent By : S/Shri Manoj Kumar, Cit-Dr & Ujjwal Kumar Chavhan, Sr.Ar सुनवाई की ितिथ/ Date Of Hearing : 22/12/2023 घोषणा की ितिथ/ Date Of Pronouncement : 15/03/2024

For Appellant: Ms. Arati Vissanji and Ms. Aastha Shah, AdvocatesFor Respondent: S/Shri Manoj Kumar, CIT-DR and Ujjwal Kumar Chavhan, Sr.AR

Tr Pchamuthu Now Known As Tr Paarivendhar, Chennai vs. ACIT, Central Circle-1(3), Chennai

In the result, the appeal filed by the assessee is partly allowed

ITA 231/CHNY/2023[1998-99]Status: DisposedITAT Chennai23 Feb 2024AY 1998-99

Bench: Shri Mahavir Singh & Shri Manjunatha.G

For Appellant: Shri. D. Anand, AdvocateFor Respondent: Shri. Nilay Baran Som, IRS, CIT

Section 143(3)Section 148Section 68Section 69

next issue raised by the assessee in this appeal is with regard to assessment of income from house property by taking annual letting value of SRM Nightingale School property determining annual letting value of Rs.28,96,162/-. We note that 12 the ld. CIT(A) has given directions ... assessee as well as the Assessing Officer to adopt annual letting value on the basis of Municipal valuation adopted by Chennai Corporation for rising the rental value. The ld. CIT(A) referred the matter back to the Assessing Officer for valuing annual letting value on the basis of municipal valuation

The DCIT, Central Circle-1(1), Ahmedabad vs. M/S. Venus Infrastructure & Developers Pvt. Ltd., Ahmedabad

In the result, the appeal of the Revenue is hereby dismissed

ITA 38/AHD/2021[2017-18]Status: DisposedITAT Ahmedabad14 Feb 2024AY 2017-18

Bench: Ms Suchitra Kamble & Shri Waseem Ahmedआयकरअपीलसं./Ita Nos. 37 & 38/Ahd/2021 धििाधरणणवध/Asstt. Years: 2008-09 & 2017-18 D.C.I.T, M/S Venus Infrastructure & Central Circle-1(1), Vs. Developers Pvt. Ltd., Ahmedabad 1101 Venus Amadeus, Jodhpur Cross Road, Ahmedabad-380015. Pan: Aahcs6254J (Applicant) (Respondent) Revenue By : Shri Akhilendra Pratap Yadaw Assessee By : Shri Tushar Hemani, Sr. Advocate With Shri Parimalsinh B. Parmar & Shri Vijay Govani A.Rs सुिणाईकीतारीख/Date Of Hearing : 08/02/2024 घोवणाकीतारीख/Date Of Pronouncement: 14/02/2024 आदेश/O R D E R Per Waseem Ahmed: The Captioned Two Appeal Have Been Filed At The Instance Of The Revenue Against The Order Of The Learned Commissioner Of Income Tax (Appeals)-11, Ahmedabad, Of Even Dated 20/01/2021 Arising In The Matter Of Assessment Order Passed Under S. 147 R.W.S. 143(3) & 143(3) Of The Income Tax Act 1961 (Here- In-After Referred To As "The Act") Relevant To The Assessment Years 2008-09 & 2017-18. First, We Take Up Ita No. 38/Ahd/2021, An Appeal By The Revenue For Ay 2017-18

For Appellant: ShriFor Respondent: Shri Akhilendra Pratap Yadaw

Section 80Section 80I

aforesaid observations and respectfully following the judicial precedents relied upon hereinabove. we direct the Ld. AO to delete the addition made towards annual letting value of'Rs.23.71.200/-in respect of two unsold flats. Accordingly, grounds raised by the assessee are allowed 6.3 In view of the above, we hold that

The DCIT, Central Circle-1(1), Ahmedabad vs. M/S. Venus Infrastructure & Developers Pvt. Ltd., Ahmedabad

In the result, the appeal of the Revenue is hereby dismissed

ITA 37/AHD/2021[2008-09]Status: DisposedITAT Ahmedabad14 Feb 2024AY 2008-09

For Appellant: ShriFor Respondent: Shri Akhilendra Pratap Yadaw

Section 80Section 80I

Laila Rustom Jehangir, Mumbai vs. Income Tax Officer, International Tax-Ward-3(1)(1), Mumbai

In the result, the appeal of the assessee is allowed

ITA 3077/MUM/2023[2018-19]Status: DisposedITAT Mumbai08 Feb 2024AY 2018-19

Bench: Shri Vikas Awasthy & Shri Amarjit Singhlaila Rustom Jehangir Vs. Income Tax Officer, 1St Floor, 41/44, International Tax- Ward Shapoorji Pallonji Centre, 3(1)(1), Air India Building Minoo Desai Marg, Colaba Nariman Point, Mumbai – 400 005 Mumbai – 400 021 स्थायी लेखा सं./जीआइआर सं./Pan/Gir No:Aacpj7267L Appellant .. Respondent Appellant By : Dhrmesh Shah & Ms. Mitali Parekh Respondent By : Anil Sant Date Of Hearing 18.01.2024 Date Of Pronouncement 08.02.2024

For Appellant: Dhrmesh Shah &For Respondent: Anil Sant

Section 23Section 24

submitted that such charges are to be borne by the owner of the property and the same is to be deducted from the Annual Letting Value (ALV) from the rent received or receivable by the P a g e | 4 Laila Rustom Jehangir Vs. ITO, IT, Ward ... impugned appeal is regarding the allowability of deduction of society charges from the rental income for the purpose of calculation of annual letting value u/s 23(1)(b). We find the Mumbai Bench of the ITAT in the case of Varma Family Trust (supra) has held that section

Kanti Thermo Equip Pvt Ltd, Mumbai vs. Assistant Commissioner of Income Tax Circle 6(3)(2), Mumbai

ITA 3039/MUM/2023[2014-15]Status: DisposedITAT Mumbai31 Jan 2024AY 2014-15

Bench: Shri B.R. Baskaran (Am) & Shri Aby T. Varkey (Jm)

Section 23Section 23(1)(c)Section 23(4)Section 24Section 57

received. The Assessing Officer, however, did not accept the above said explanations given by the assessee and took the view that the annual letting value (ALV) of the property should be assessed as “deemed rental income”. He also took the view that the ALV of the property should be computed ... property at Rs.20,60,713/-, which was computed at 8.5% of the value of property. After allowing deduction of Rs. 30% of the annual letting value towards repairs u/s 24 of the Act, the Assessing Officer determined the rental income assessable under the head Income from house property in respect

ACIT, Circle- 2(2), New Delhi vs. Ansal Properties and Infrastructure Pvt. Ltd., New Delhi

In the result, both the appeals of the assessee as well as the revenue are partly allowed for statistical purposes

ITA 3170/DEL/2019[2015-16]Status: DisposedITAT Delhi31 Jan 2024AY 2015-16

Bench: Shri M. Balaganesh & Shri Yogesh Kumar Usansal Properties & Vs. Acit, Infrastructure Pvt. Ltd, Circle-2(2), 115, Ansal Bhawan, New Delhi 16, Kg Marg, New Delhi (Appellant) (Respondent) Pan: Aaaca0006D Acit, Vs. Ansal Properties & Circle-2(2), Infrastructure Pvt. Ltd, New Delhi 115, Ansal Bhawan, 16, Kg Marg, New Delhi (Appellant) (Respondent) Pan: Aaaca0006D Assessee By : Shri R S. Singhvi, Adv Shri Satyajeet Goel, Adv Revenue By: Shri Zafarul Haque Tanweer, Cit Dr Date Of Hearing 18/01/2024 Date Of Pronouncement 31/01/2024

For Appellant: Shri R S. Singhvi, AdvFor Respondent: Shri Zafarul Haque Tanweer

Section 22Section 36(1)(va)Section 43C

appreciate the ratio of Chennai Properties & Investments Ltd. v. CIT (2015) 373 ITR 673 (SC) in upholding the addition on account of notional annual letting value made under section 22 of Income tax Act, 1961 ('the Act'). 1.1 That on facts and circumstances of the case

Ansal Properties and Infrastructure Pvt. Ltd., New Delhi vs. ACIT, Circle- 2(2), New Delhi

In the result, both the appeals of the assessee as well as the revenue are partly allowed for statistical purposes

ITA 2549/DEL/2019[2015-16]Status: DisposedITAT Delhi31 Jan 2024AY 2015-16

For Appellant: Shri R S. Singhvi, AdvFor Respondent: Shri Zafarul Haque Tanweer

Section 22Section 36(1)(va)Section 43C

Surana Mutha Bhansali Developers, Pune vs. ITO, Ward 5(4), Pune

In the result, the appeal of assessee is allowed

ITA 1313/PUN/2023[2014-15]Status: DisposedITAT Pune23 Jan 2024AY 2014-15

Bench: Shri S.S. Viswanethra Ravi & Dr. Dipak P. Ripote

For Appellant: Shri Neelesh KhandelwalFor Respondent: Shri M.G. Jasnani

Section 143(2)Section 143(3)Section 80I

Housing Finance & Leasing Co. Ltd. reported in 354 ITR 180 (Delhi) imposed ALV on account of deemed rent on finished stock by adopting annual letting value at 7% of the investment cost of flats (WIP value). The CIT(A) confirmed the view of AO. On careful examination of the order ... case of M/s. Cosmopolis Construction (supra). Therefore, as discussed above, admittedly, the assessee shown unsold flats as finished stock and no annual letting value of deemed rent could be imposed on such unsold stock which were treated as stock-in-trade. Thus, the order of CIT(A) is not justified

Shamdarshan Properties Private Limited, Mumbai vs. ITO Ward 3(3)(2), Mumbai

ITA 2777/MUM/2023[2014-15]Status: DisposedITAT Mumbai22 Jan 2024AY 2014-15

Bench: Shri Prashant Maharishi & Shri Pavan Kumar Gadale

Section 143(1)Section 143(3)Section 154

unsold flats in stock in trade which the AO treated as property assessable under the head ‘income from house property' and computed notional annual letting value on such unsold flats placing reliance on the 9 ITA No. 2779 & 2777/Mum/2023 AY 2012-13 & 2014-15 M/s Shamdarshan Properties pvt. LTd decision ... held as stock in trade by the assessee can be assessed under the head 'income from house property’by notionally computing the annual letting value from such property and the Coordinate Bench considering the decision of the Hon'ble Delhi High Court in the case of Ansal Housing Finance & Leasing

Gonuguntla Nirmala Devi, Anantapur vs. The Assistant Commissioner of Income Tax, Circle 1, Anantapur

In the result, the appeal of the assessee is partly allowed

ITA 455/HYD/2023[2017-18]Status: DisposedITAT Hyderabad18 Jan 2024AY 2017-18

Bench: Shri R.K. Panda & Shri Laliet Kumar

For Respondent: Shri Shakeer Ahamed, Sr.AR

Section 143(3)Section 23Section 23(1)(a)Section 68

grounds 6 and 7 are dismissed as not pressed. 4. Ground nos. 2 to 5 are with respect to the determination of annual letting value (ALV) of the of the vacant portion of the property situated at 2nd, 3rd and 4th floors of the premises of the assessee and ground

The Deputy Commissioner of Income Tax, Central Circle-6(1), Mumbai vs. Neepa Real Estates Pvt Ltd, Mumbai

ITA 1508/MUM/2023[2017-2018]Status: DisposedITAT Mumbai10 Nov 2023AY 2017-2018

Bench: Shri Kuldip Singh & Shri Gagan Goyalassessment Years: 2017-18 The Deputy Commissioner M/S. Neepa Real Estates Of Income Tax, Pvt. Ltd., 12Th Floor, Hallmark Central Circle -6(1), Room No. 1905, Business Plaza, Vs. 19Th Floor, Sang Dnyaneshwar Marg, Air India Building, Near Gurunanak Hospital, Nariman Point, Bandra East, Mumbai- 400 021 Mumbai- 400 051 Pan: Aaacn1884C (Appellant) (Respondent)

For Appellant: Dr. K. Shivaram, Sr. A.R. &For Respondent: Shri Ashok Kumar Ambastha, D.R

Section 143(3)Section 43C

taking the value of the unsold stock of three buildings at Rs.71,39,31,675/-, estimated Annual Letting Value (ALV) on unsold stock @ 8.5% after deducting 30% taxed Rs.4,24,78,935/- as income from the house property. The AO also has made addition of Rs.2,29,500/- under section ... Delhi High Court in CIT v. Ansal Housing Finance and Leasing Company Ltd. [2013] 354 ITR 180 (Delhi), the AO computed the annual letting value of the unsold flats u/s. 23 of the Income-tax Act, 1961 (hereinafter also called the Act) at Rs. 1,47,65,688/- and made

Coronate Constructions, Mumbai vs. Principal Commissioner of Income Tax, Mumbai

ITA 1024/MUM/2022[2017-18]Status: DisposedITAT Mumbai09 Nov 2023AY 2017-18

Bench: Shri Kuldip Singh & Shri S Rifaur Rahmanassessment Year: 2017-18

For Appellant: Shri Dharan Gandhi, A.RFor Respondent: Shri Manoj Kumar Sinha, D.R

Section 143(3)Section 263Section 288A

that since this project has been developed on ownership basis assessee company was owner of the property till it is sold and the annual letting value (ALV) of the unsold stock (held as stock in trade) farming part of the inventory should have been brought to tax as deemed rent ... flats which are shown in stock in trade is not to be assessed under the head "income from house property" by notionally computing annual letting value from such property non discussion by the AO in detail does not confer the jurisdiction on the Ld. PCIT to invoke the provisions contained