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“Section 23(1)”

Section References (mined)Section 23Section 23(1)194 judgments

The decision most relied on for Section 23(1) is CIT v. Tip Top Typography (368 ITR 330), cited in 161 judgments on BharatTax.

Leading authorities on Section 23(1)

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. Neha Builders Pvt. Ltd.
296 ITR 661 · 2008 · High Court
129
citing judgments

Income from unsold flats held as stock-in-trade by a builder or developer is assessable as business income, not income from house property, for assessment years prior to the insertion of Section 23(5) of the Income-tax Act.

CIT v. Sridev Enterprises
192 ITR 165 · 1991 · High Court
125
citing judgments

Interest expenditure on borrowed funds, especially when used for making advances, should generally be allowed under Section 36(1)(iii) if its nature and business expediency remain consistent with previous assessment years. The character of an outstanding amount at the start of an accounting year is considered the same as at the end of the prior year, reinforcing the rule of consistency.

CIT v. Oswal Agro Mills Ltd.
341 ITR 467 · 2012 · High Court
108
citing judgments

The Legislature abolished terminal depreciation under section 32(1)(iii) and the taxing of balancing charge under section 41(2), replacing these provisions with the requirement to reduce sale proceeds of depreciable assets from the block of assets.

Rayala Corporation Pvt. Ltd. v. ACIT
386 ITR 500 · 2016 · Supreme Court
89
citing judgments

If an assessee company's main business object is to acquire and rent out properties, the rental income derived is taxable as 'Profits and gains of business or profession', rather than 'Income from house property', as the nature of the activity constitutes a business.

Keshav Mills Ltd. v. CIT
23 ITR 230 · 1953 · Supreme Court
86
citing judgments

Income taxability depends on the real nature of the receipt and actual or constructive receipt of income, not merely on book entries. An amount is only "deemed to be received" if explicitly provided by the Income Tax Act, not by an assessee's unilateral intention.

CIT v. Gujarat Power Corporation Ltd.
352 ITR 583 · 2013 · High Court
80
citing judgments

Disallowance under Section 14A for interest expenditure is not justified if an assessee uses its own interest-free funds for investments generating exempt income, and borrowed funds are entirely utilized for business purposes, without evidence of diversion to earn tax-free income.

CIT v. Moni Kumar Subba
333 ITR 38 · 2011 · High Court
78
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.

Judgments citing Section 23(1)

Hercules Hoists Limited, Raigarh vs. Deputy Commissioner of Income Tax, Mumbai

In the result, the appeals filed by the assessee in ITA Nos

ITA 5445/MUM/2024[2012-2013]Status: DisposedITAT Mumbai18 Jul 2025AY 2012-2013

Bench: Shri Saktijit Dey, Vp & Shri Prabhash Shankar, Am

For Appellant: Shri Vasanti PatelFor Respondent: Shri Hemanshu Joshi
Section 22Section 23(1)(a)Section 23(1)(c)

contentions of the learned Assessing Officer and CIT(Appeals) are accepted, the appellant is entitled to deduction for vacancy allowance under section 23(1)(c) of the Act as the said property remained vacant throughout the year. Without prejudice to the above, t is submitted that the income from house ... basis of municipal ratable value and it cannot exceed the same. It is submitted that the computation of income from house property under section 23(1)(a) of the Act is erroneous and contrary to the provisions of the law. Total Tax Effect – Rs.4,42,101/- Hercules Hoists Limited

Hercules Hoists Limited, Raigarh vs. Deputy Commissioner of Income Tax, Mumbai

In the result, the appeals filed by the assessee in ITA Nos

ITA 5444/MUM/2024[2014-15]Status: DisposedITAT Mumbai18 Jul 2025AY 2014-15

Bench: Shri Saktijit Dey, Vp & Shri Prabhash Shankar, Am

For Appellant: Shri Vasanti PatelFor Respondent: Shri Hemanshu Joshi
Section 22Section 23(1)(a)Section 23(1)(c)

contentions of the learned Assessing Officer and CIT(Appeals) are accepted, the appellant is entitled to deduction for vacancy allowance under section 23(1)(c) of the Act as the said property remained vacant throughout the year. Without prejudice to the above, t is submitted that the income from house ... basis of municipal ratable value and it cannot exceed the same. It is submitted that the computation of income from house property under section 23(1)(a) of the Act is erroneous and contrary to the provisions of the law. Total Tax Effect – Rs.4,42,101/- Hercules Hoists Limited

Hercules Hoists Limited, Raigarh vs. Deputy Commissioner of Income Tax, Mumbai

In the result, the appeals filed by the assessee in ITA Nos

ITA 5443/MUM/2024[2017-18]Status: DisposedITAT Mumbai18 Jul 2025AY 2017-18

Bench: Shri Saktijit Dey, Vp & Shri Prabhash Shankar, Am

For Appellant: Shri Vasanti PatelFor Respondent: Shri Hemanshu Joshi
Section 22Section 23(1)(a)Section 23(1)(c)

contentions of the learned Assessing Officer and CIT(Appeals) are accepted, the appellant is entitled to deduction for vacancy allowance under section 23(1)(c) of the Act as the said property remained vacant throughout the year. Without prejudice to the above, t is submitted that the income from house ... basis of municipal ratable value and it cannot exceed the same. It is submitted that the computation of income from house property under section 23(1)(a) of the Act is erroneous and contrary to the provisions of the law. Total Tax Effect – Rs.4,42,101/- Hercules Hoists Limited

Hercules Hoists Limited, Raigarh vs. Deputy Commissioner of Income Tax, Mumbai

In the result, the appeals filed by the assessee in ITA Nos

ITA 5442/MUM/2024[2018-19]Status: DisposedITAT Mumbai18 Jul 2025AY 2018-19

Bench: Shri Saktijit Dey, Vp & Shri Prabhash Shankar, Am

For Appellant: Shri Vasanti PatelFor Respondent: Shri Hemanshu Joshi
Section 22Section 23(1)(a)Section 23(1)(c)

contentions of the learned Assessing Officer and CIT(Appeals) are accepted, the appellant is entitled to deduction for vacancy allowance under section 23(1)(c) of the Act as the said property remained vacant throughout the year. Without prejudice to the above, t is submitted that the income from house ... basis of municipal ratable value and it cannot exceed the same. It is submitted that the computation of income from house property under section 23(1)(a) of the Act is erroneous and contrary to the provisions of the law. Total Tax Effect – Rs.4,42,101/- Hercules Hoists Limited

Andhra Pradesh Beverages Corporation Limited, Hyderabad vs. DCIT, Circle-1(1), Hyderabad

ITA 292/HYD/2023[2015-16]Status: DisposedITAT Hyderabad06 Jun 2025AY 2015-16

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: Shri Y. Ratnakar, Advocate &For Respondent: MS. M. Narmada, CIT-DR
Section 40a

Government as privilege fee or special privilege fee or any other fee or cess, by whatever name called, as per the provisions of sections 23(1), 23A and 23B of the Andhra Pradesh Excise Act, 1968 shall be deemed to be and always deemed to have been the income ... other fee or cess, by whatever name called, in consideration of the privilege conferred on the Corporation, as per the provisions of sections 23(1), 23-A and 23-B of the Andhra Pradesh Excise Act, 1968 shall be deemed to be and always deemed to have been the income

Andhra Pradesh Beverages Corporation Limited, Hyderabad vs. DCIT, Circle-1(1), Hyderabad

ITA 291/HYD/2023[2014-15]Status: DisposedITAT Hyderabad06 Jun 2025AY 2014-15

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: Shri Y. Ratnakar, Advocate &For Respondent: MS. M. Narmada, CIT-DR
Section 40a

Government as privilege fee or special privilege fee or any other fee or cess, by whatever name called, as per the provisions of sections 23(1), 23A and 23B of the Andhra Pradesh Excise Act, 1968 shall be deemed to be and always deemed to have been the income ... other fee or cess, by whatever name called, in consideration of the privilege conferred on the Corporation, as per the provisions of sections 23(1), 23-A and 23-B of the Andhra Pradesh Excise Act, 1968 shall be deemed to be and always deemed to have been the income

Bindumalyam Panduranga Allanharinarayan, Bangalore vs. Income Tax Officer, Ward-5(2)(1), Bengaluru

ITA 107/BANG/2025[2018-19]Status: DisposedITAT Bangalore30 May 2025AY 2018-19

Bench: Shri Waseem Ahmed & Shri Keshav Dubey

For Appellant: Sri Bharadwaj Sheshadri, A.RFor Respondent: Smt. Neha Sahay, D.R
Section 143(1)Section 143(2)Section 23Section 250Section 44A

fair rental value/municipal rental value of the property for determining the annual value of the house property as per the provisions of section 23(1)(a) of the Act, the notional value of Rs.28,07,780/- (8.5% of Rs.3,30,32,716/-) is adopted as annual value for the purpose

Cotha Vinod Hayagriv, Bangalore vs. Deputy Commissioner of Income Tax, Central Circle-1(2), Bangalore

In the result, appeal of the assessee is partly allowed

ITA 85/BANG/2024[2017-18]Status: DisposedITAT Bangalore28 May 2025AY 2017-18

Bench: Shri. Laxmi Prasad Sahu & Shri. Soundararajan Kassessment Years :2017-18

For Appellant: Shri. Ravishankar S V, AdvocateFor Respondent: Shri.N. Balusamy, JCIT(DR)(ITAT), Bangalore
Section 132Section 139(1)Section 143(2)Section 153ASection 23(1)(a)

Page 3 of 5 months. Therefore, as per municipal value, the taxable annual value per month is R.29,598/- as per interpretation of section 23(1)(a) of the Act. The assessee has shown higher rental income. However, the contention of the assessee was rejected ... business activity. The Annual value is more than the BBMP annual value , therefore the asseseee has satisfied the conditions laid out in section 23(1)(a) and (b) of the Act. In the Hindu culture it is the duty of the parent to see that their children are settled down

Classic Mall Development Company Limited, Mumbai vs. Asst. Commissioner of Income Tax Circle 6(2)(1), Mumbai

In the result, the appeal of assessee is allowed

ITA 2297/MUM/2025[2017-18]Status: DisposedITAT Mumbai19 May 2025AY 2017-18

Bench: Shrisaktijit Dey, Vice-And Shri Bijayananda Pruseth(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

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

lack of competitive customers. Such vacant properties were leased out in the subsequent year. The assessee contended that as per the provisions of section 23(1)(c) of the Act, the rent received or receivable during the year may be Nil due to vacancy for the whole year under consideration ... accept the reply of the assessee and held that the case of the assessee is covered by the section 23(1)(a) of the Act and gross annual value has to be on the basis of expected reasonable rate. He held that the facts of the assessee are not covered

Percival Joseph Pereira, Mumbai vs. Income Tax Officer (It) -3(3)(1), Mumbai

In the result, both the appeals by the assessee are allowed

ITA 4662/MUM/2024[2016-17]Status: DisposedITAT Mumbai19 May 2025AY 2016-17

Bench: Amit Shukla & Shri Girish Agrawal

Section 143(3)Section 271(1)(c)Section 45(5)(b)Section 56Section 56(2)(viii)

enhanced to Rs. 500/- per sq.mt. The applicant is also entitled to the benefit of additional component of 12% p. a. under section 23(1)(A) of the Act as well as solatium under section 23(2) and also the interest under section 28 of the Act in addition

Percival Joseph Pereira, Mumbai vs. Income Tax Officer (It)-3(3)(1), Mumbai

In the result, both the appeals by the assessee are allowed

ITA 4661/MUM/2024[2016-17]Status: DisposedITAT Mumbai19 May 2025AY 2016-17

Bench: Amit Shukla & Shri Girish Agrawal

Section 143(3)Section 271(1)(c)Section 45(5)(b)Section 56Section 56(2)(viii)

enhanced to Rs. 500/- per sq.mt. The applicant is also entitled to the benefit of additional component of 12% p. a. under section 23(1)(A) of the Act as well as solatium under section 23(2) and also the interest under section 28 of the Act in addition

Ramesh Dungarshi Shah, Mumbai vs. Deputy Commissioner of Inocme Tax, Circle-3, Mumbai

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

ITA 1220/MUM/2024[2015-16]Status: DisposedITAT Mumbai14 May 2025AY 2015-16

Bench: Ms. Kavitha Rajagopal, Jm & Shri. Girish Agarwal, Am Ramesh Dungarshi Shah Deputy Commissioner Of Income 108, Shreedhar Apartment, Maulana Tax, Circle – 3, Kalyan Vs. 2Nd Floor, Rani Mansion, Murbad Azad Road, Dombivali, East, Thane – 421201. Road, Kalyan West – 421301. Pan/Gir No. Aavps0931K (Assessee) : (Respondent) Assessee By : Shri. Devendra Jain, Adv. (Virtually) : Shri. Asif Karmali (Sr. Dr) Respondent By : 14.02.2025 Date Of Hearing Date Of Pronouncement : 14.05.2025 O R D E R Per Kavitha Rajagopal, J M: This Appeal Has Been Filed By The Assessee, Challenging The Order Of The Learned Commissioner Of Income Tax (Appeals), Delhi (‘Ld. Cit(A)’ For Short), National Faceless Appeal Centre (‘Nfac’ For Short) Passed U/S.250 Of The Income Tax Act, 1961 (‘The Act'), Pertaining To The Assessment Year (‘A.Y.’ For Short) 2015-16. 2. It Is Observed That The Assessee Has Filed This Present Appeal With A Delay Of 47 Days Beyond The Period Of Limitation For Which The Assessee Has Filed An Application For Condoning The Delay Along With The Reasons Specified For The Delay. After Hearing The Rival Contentions, We Deem It Fit To Condone The Delay In Filing The Appeal For The Reason That There Was ‘Sufficient Cause’ & Bonafide Reasons For The Delay. Delay Condoned.

For Appellant: Shri. Devendra Jain, Adv. (Virtually)For Respondent: 14.02.2025
Section 143(1)Section 143(3)Section 23(1)(a)Section 23(4)(b)Section 23(5)Section 250

property’, where the ld. AO has taken the notional rent of unsold shops/flats at Rs. 5,46,000/- as per the provision of Section 23(1)(a) r.w.s. 23(4) of the Act. 4. Briefly stated that the assessee is an individual and engaged in the business of Civil Construction ... said decision is cited herein under for ease of reference: “9. Furthermore there is no dispute that the effect of the amendment, inserting Section 23(1)(c), would not be to change the incidence of taxability of the properties held as stock in trade. Therefore, this Court's finding that

Padam Chand Gupta, New Delhi vs. ACIT, Circle- 35(1), New Delhi

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

ITA 7418/DEL/2017[2014-15]Status: DisposedITAT Delhi30 Apr 2025AY 2014-15

Bench: Sh. Shamim Yahya & Sh. Sudhir Kumarassessment Year: 2014-15 Padam Chand Gupta, Vs. Assistant Commissioner 1-C Court Road Civil Lines Of Income Tax, Income Tax Delhi 110054 Circle 35(1) New Delhi Pan No. Aanpg5120C (Appellant) (Respondent)

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

from its tenants. The Ld. AR mentioned that the annual value of the property has to be determined as per the provisions of Section 23(1) of the Act. We consider it appropriate to refer to Section 23(1)(b) of the Act which is read as under: (1 ... rent control legislation. If this contention of assessee is correct, then the house property income has to be determined under the provisions of section 23(1)(b) property income has to be assessed under section 23(1)(a). Section 23(1)(a) & (b) being relevant provisions otherwise the house applicable

Smt. Tejal Kaushal Shah, Mumbai vs. Income Tax Officer Ward, 25(1)(5), Mumbai

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

ITA 3303/MUM/2024[2012-13]Status: DisposedITAT Mumbai17 Apr 2025AY 2012-13

Bench: MS. KAVITHA RAJAGOPAL (Judicial Member), SMT. RENU JAUHRI (Accountant Member)

For Appellant: Shri. Reepal Tralshawala
Section 143(2)Section 23Section 250Section 54

IN THE INCOME TAX APPELLATE TRIBUNAL “E” BENCH, MUMBAI BEFORE MS. KAVITHA RAJAGOPAL, JM AND SMT. RENU JAUHRI, AM Smt

Kusumlata Garg, Indore vs. DCIT ACIT 3 (1) Indore, Indore

Appeal is allowed for statistical purpose

ITA 298/IND/2024[2017-18]Status: DisposedITAT Indore26 Mar 2025AY 2017-18

Bench: Shri B.M. Biyani

Section 143(2)Section 143(3)Section 69A

provisions but the fact is such that the tenant is not paying rent to assessee. He submitted that as per Explanation to section 23(1) of Income-tax Act, 1961, the amount of unrealized rent is not taxable if the conditions prescribed in Rule 4 of Income-tax Rules ... Income-tax Rules, 1962 so as to give benefit of non-taxability of impugned rent, more particularly “unrealized rent”, as per Explanation to section 23(1). We direct the CIT(A) to decide this issue afresh after giving necessary opportunities to assessee and considering the submissions of assessee. Ordered accordingly

Classic Mall Development Company Limited, Mumbai vs. Assistant Commissioner of Income Tax, Circle 6(2)(1), Mumbai

In the result, appeal of the assessee is allowed

ITA 5320/MUM/2024[2016-17]Status: DisposedITAT Mumbai21 Mar 2025AY 2016-17

Bench: Shri Amit Shukla & Shri Girish Agrawalassessment Year: 2016-17

For Appellant: Shri Vijay Mehta, CAFor Respondent: Shri R.A. Dhyani, CIT DR &
Section 143(3)Section 23(1)Section 23(1)(a)

head “income from house property” in respect of vacant units of a commercial mall during the year pursuant to provisions contained in section 23(1) of the Act. 2.1. Brief facts of the case are that assessee filed its return of income on 28.03.2018 reporting total income at Rs.9 ... annual value of the vacant units. The only issue involved is whether these vacant eight units were eligible for vacancy allowance, as per section 23(1)(c) or are to be taxed u/s.23(1)(a). While adjudicating the issue, ld. CIT(A) laid sole emphasis on requirement of property

Navbharat Potteries Private Limited, Mumbai vs. Deputy Commissioner of Income Tax - Circle 7(1)(1), Mumbai

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

ITA 2700/MUM/2024[2016-17]Status: DisposedITAT Mumbai05 Mar 2025AY 2016-17

Bench: Shri B R Baskaran & Shri Raj Kumar Chauhan

Section 142(1)Section 143(3)Section 147Section 148Section 22Section 23(1)(c)Section 250

opinion that the annual let out value of the deemed rent at flats was not considered in terms of section 23(1)(c) of the Act and the reopening of assessment u/s 147 of the Act was on sound footing and does not need any interference. Regarding addition ... which was vacant throughout the year has been excluded from the purview of computation of income of house property under the provisions of section 23(1)(c) of the Act is not correct and is contrary to judgment of Hon'ble High Court of Andhra Pradesh in the case

Late Mahesh Ramanlal Modi L/H Manish Mahesh Modi, Bharuch vs. ACIT Circle-1, Bharuch

In the result, ground No. VII of appeal raised by the assessee is also allowed for statistical purposes

ITA 999/SRT/2024[2017-18]Status: DisposedITAT Surat04 Mar 2025AY 2017-18

Bench: Shri Pawan Singh & Shri Bijayananda Pruseth(Physical Hearing) Late Mahesh Ramanlal Modi, A.C.I.T., Through L-H Manish Mahesh Modi, Circle-1, Vs. Near Shakuntal Apartment, Dahej Bharuch. Bypass Road At Nandelav, Bharuch-392001 (Gujarat) Pan No. Adfpm 4030 N Appellant/ Assessee Respondent/ Revenue

Section 115BSection 23(5)Section 24Section 254(1)Section 40Section 69A

deem rental value @ Rs. 15,000/- per month should not be added as total deemed income as per provisions of Section 23(1)(a) of the Act. The assessee filed his reply dated 20/12/2019. In the reply, the assessee stated that he owned immovable property/asset at Revenue Survey

Ambika Trading Corporation, Mumbai vs. DCIT 24(1), Mumbai

In the result the appeals filed by the assessee for both assessment years stands partly allowed

ITA 6058/MUM/2024[2015-16]Status: DisposedITAT Mumbai28 Feb 2025AY 2015-16

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 139(1)Section 147Section 148

provided U/sec 23(1)(c) of the Act as the same was vacant for the "whole year". He placed reliance on Section 23(1)(c) provides that reads as under: "(c) where the property or any part of the property is let and was vacant during the whole ... Asfa Technologies & BPO (P) Ltd. V. ITO reported in 143 taxmann.com 170 4.2. Alternatively, the Ld.AR proposed that the notional rent under section 23(1)(a) of the Act shall not exceed Rs.1,91,183/-, i.e. the municipal tax of the said premises which is the ALV of the said

Ambika Trading Corporation, Mumbai vs. DCIT 24(1), Mumbai

In the result the appeals filed by the assessee for both assessment years stands partly allowed

ITA 6057/MUM/2024[2014-15]Status: DisposedITAT Mumbai28 Feb 2025AY 2014-15

Bench: Smt. Beena Pillai () & Shri Omkareshwar Chidara ()

Section 139(1)Section 147Section 148

provided U/sec 23(1)(c) of the Act as the same was vacant for the "whole year". He placed reliance on Section 23(1)(c) provides that reads as under: "(c) where the property or any part of the property is let and was vacant during the whole ... Asfa Technologies & BPO (P) Ltd. V. ITO reported in 143 taxmann.com 170 4.2. Alternatively, the Ld.AR proposed that the notional rent under section 23(1)(a) of the Act shall not exceed Rs.1,91,183/-, i.e. the municipal tax of the said premises which is the ALV of the said