Section 23(1) of the Income Tax Act
Income-tax Act, 2025: s.21
Section 23(1) falls under section 23 of the Income-tax Act, 1961, which corresponds to section 21 (Determination of annual value) of the Income-tax Act, 2025.
Read section 21 of the 2025 Act
Correspondence checked against the ICAI tabular mapping of the two Acts and the BharatTax.co section commentary.
The decision most relied on for Section 23(1) is Central India Electric Supply Co. v. CIT* (232 ITR 2), cited in 16 of the 114 judgments on BharatTax that turn on this section.
Leading authorities on Section 23(1)
Mesne profits decreed by a court are taxable income in the hands of the decree holder in the relevant assessment year they are charged to income-tax.
No disallowance can be made under section 14A if the assessee has not earned any exempt income in the relevant assessment year.
Mesne profits received by an assessee for unauthorized occupation of property constitute a capital receipt and are not chargeable to income tax. This receipt is characterized as damages for dispossession or loss of a right to use the property.
Unsold properties can be assessed for deemed rental income under Section 23(1)(a) based on a reasonable letting value, often calculated as a percentage of the property's cost or value.
