Section 23(4) of the Income Tax Act

Income-tax Act, 2025: s.21

Section 23(4) 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(4) is Smitaben N. Ambani v. CWT (323 ITR 104), cited in 44 of the 92 judgments on BharatTax that turn on this section.

Leading authorities on Section 23(4)

Smitaben N. Ambani v. CWT
323 ITR 104 · 2010 · High Court
44
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.

CIT v. Sane & Doshi Enterprises
377 ITR 165 · 2015 · High Court
38
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.

CIT v. Neha Builders (P.) Ltd.
164 Taxmann 342 · 2007 · High Court
30
citing judgments

When a builder's business involves constructing and selling property, unsold units are considered stock-in-trade and income derived from them is taxable under the head 'Business Income', not 'Income from House Property'.

Kumar Properties and Real Estate (P.) Ltd. v. DCIT
128 Taxmann.com 364 · 2021 · ITAT
14
citing judgments

No disallowance can be made under section 14A if the assessee has not earned any exempt income in the relevant assessment year.

CIT v. D.N. Dosani
280 ITR 275 · 2006 · High Court
13
citing judgments

When an assessment is reopened under Section 263, the Assessing Officer's power to make a fresh assessment is confined only to the specific issues directed by the Commissioner for revision. The Assessing Officer cannot consider other items not part of the revisional direction.

Commissioner of Income-tax-I v. Himani M Vakil
10 Taxmann.com 326 · 2013 · High Court
9
citing judgments
Rajesh Keshav Pillai v. ITO
44 SOT 617 · 2011 · ITAT
6
citing judgments
Pvt. Ltd. v. ACIT, Pune
147 Taxmann.com 333 · 2023 · ITAT
5
citing judgments
Tivoli Investment& Trading Co. Pvt. Ltd. v. ACIT
90 ITD 163 · ITAT
4
citing judgments
PCIT v. Royal Western India Turf\nClub Ltd.
103 Taxmann.com 13 · 2019 · High Court
3
citing judgments

Judgments on Section 23(4)

Tushar Harishkumar Gangwani, Surat vs. Income Tax Officer, Ward-2(3)(4), Surat

The appeal of the assessee is allowed

ITA 188/SRT/2026[2018-19]Status: DisposedITAT Surat01 Sept 2026AY 2018-19

Bench: Ms. Suchitra Kamble & Shri B.M. Biyanitushar Harishkumar Gangwani, Income Tax Officer, 7-A, Mount Blank Appt., Ward 2(3)(4), Near Rajhans Cinema, Aaykar Bhawan, Vs. Piplod, Near Majura Gate, Surat Opp. New Civil Hospital, Surat Pan: Aoepg7137C (Appellant) : (Respondent) Assessee By : Shri Sapnesh Sheth, Advocate Respondent By : Shri Ashish Kumar, Sr. Dr Date Of Hearing : 18.06.2026 Date Of Pronouncement : 01.09.2026 O R D E R Per : Suchitra Kamble, J M: The Appeal Filed By The Assessee Is Against The Order Passed By The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [In Short “Cit(A)”] Dated 19.12.2025 For The Assessment Year (In Short “Ay”) 2018-19. 2. The Assessee Has Raised The Following Grounds Of Appeal: “1. On The Facts & In The Circumstances Of The Case, As Well As Law On The Subject, The Learned Commissioner Of Income Tax (Appeals), Nfac, Has Erred In Confirming The Action Of The Id. Assessing Officer In Making An Addition Of Rs. 4,20,000/- As Income From House Property Under The Income-Tax Act, 1961, Despite The Fact That The Said Property Is Not Owned By Assessee. 2. It Is Therefore Prayed That Above Addition Made By Assessing Officer & Confirmed By Commissioner Of Income Tax (Appeals), Nfac, May Please Be Deleted. Tushar Harishkumar Gangwani

For Appellant: Shri Sapnesh Sheth, AdvocateFor Respondent: Shri Ashish Kumar, Sr. DR
Section 143(3)Section 263

Assistant Commissioner of Income Tax, Circle-1(1)(1), Vadodara vs. Pradeep Ravichandra Kothari, Ahmedabad

In the result, the appeal of the Department is partly allowed for statistical purposes

ITA 2328/AHD/2025[2017-18]Status: DisposedITAT Ahmedabad21 Apr 2026AY 2017-18

Bench: Shri Siddhartha Nautiyal & Shri Narendra Prasad Sinha

For Appellant: Shri Sakar Sharma, ARFor Respondent: Shri Rignesh Das, CIT-DR
Section 143(3)Section 41(1)Section 68

Khinvasara Chavan, Pune vs. Assistant Commissioner of Income Tax, Circle 5, Pune

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

ITA 2402/PUN/2025[2017-18]Status: DisposedITAT Pune30 Mar 2026AY 2017-18

Bench: Shri R. K. Panda & Ms. Astha Chandraassessment Year : 2017-18 Khinvasara Chavan Acit, Circle – 5, Pune Shop No.1 & 2, Vijay Apartments, Vs. 22, Mukund Nagar, Pune – 411037 Pan: Aacfk3473H (Appellant) (Respondent) Assessee By : Shri Rohan R Potdar Department By : Shri Aviyogi Ambadkar, Addl.Cit Date Of Hearing : 30-03-2026 Date Of Pronouncement : 30-03-2026 O R D E R Per R.K. Panda, Vp:

For Appellant: Shri Rohan R PotdarFor Respondent: Shri Aviyogi Ambadkar, Addl.CIT
Section 142(1)Section 143(2)Section 234

Laljibhai Godadbhai Chaudhari, Ahmedabad vs. The ITO, Ward-2(1)(2), Ahmedabad

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

ITA 1720/AHD/2025[2018-19]Status: DisposedITAT Ahmedabad13 Nov 2025AY 2018-19

Bench: Dr. B.R.R. Kumar, Vice-Shri T.R. Senthil Kumar

For Appellant: Shri Pritesh Shah, ARFor Respondent: Shri Rohit Aasudani, Sr DR
Section 143(3)Section 23(4)Section 24Section 250

Mohit Vijaykumar Gupta, Mumbai vs. The DCIT, Circle-2(1)(1), Ahmedabad

In the result, the appeal of the assessee is partly allowed, Ground No

ITA 1091/AHD/2025[2021-22]Status: DisposedITAT Ahmedabad06 Nov 2025AY 2021-22

Bench: Dr. Brr Kumar & Shri Siddhartha Nautiyalआयकर अपील सं /Ita No.1091/Ahd/2025 िनधा"रण वष" /Assessment Year : 2021-22 Mohit Vijaykumar Gupta The Dcit बनाम/ B-1001, Juhu Trishul, Circle-2(1)(1) V/S. Gulmohar Cross Road No.6 Ahmedabad – 380 015 Jvpd Vile Parle West Mumbai – 400 049 "थायी लेखा सं./Pan: Adfpg 7162 D (अपीलाथ"/ Appellant) ("" यथ"/ Respondent) Assessee By : Shri J. C. Desai, Ca Revenue By : Shri B.P. Srivastava, Sr.Dr सुनवाई की तारीख/Date Of Hearing : 06/08/2025 घोषणा की तारीख /Date Of Pronouncement: 06/11/2025 आदेश/O R D E R Per Siddhartha Nautiyal, Jm: The Present Appeal Has Been Preferred By The Assessee Against The Order Of The Learned Commissioner Of Income Tax (Appeals), National Faceless Appeal Centre (Nfac), Delhi [Hereinafter Referred To As ‘Cit(A)’] Dated 14/12/2025 Passed U/S.250 Of The Income Tax Act, 1961 (Hereinafter Referred To As ‘The Act’) For The Assessment Year (Ay) 2021-2022. 2. The Assessee Has Raised The Following Grounds Of Appeal: Mohit Vijaykumar Gupta Vs. Dcit Asst. Year : 2021-22

For Appellant: Shri J. C. Desai, CAFor Respondent: Shri B.P. Srivastava, Sr.DR
Section 22Section 23(1)(c)Section 24Section 250

Ranee Narah, Guwahati vs. ACIT Cir -2 Guwahati, Guwahati

Appeal is allowed for statistical purposes

ITA 147/GTY/2025[2017-18]Status: DisposedITAT Guwahati28 Oct 2025AY 2017-18

Bench: The Ld. Cit(A) On The Basis Of Following Findings:

Section 23(4)Section 250Section 68Section 69A

Ravi K Sheth, Mumbai vs. Deputy Commissioner of Income Tax -5(3)(1), Mumbai

In the result, appeal of the assessee is partly allowed

ITA 1907/MUM/2025[2017-18]Status: DisposedITAT Mumbai16 Sept 2025AY 2017-18

Bench: Shri Sandeep Gosain & Shri Girish Agrawalassessment Year: 2017-18 Ravi K Sheth Deputy Commissioner Of M/S. Kalyaniwalla & Mistry Llp , Income Tax -5(3)(1), Esplanade House, 2Nd Floor, Mumbai Vs. 29, Hazarimal Somani Marg, Fort, Mumbai - 400001 (Pan : Aaips7341E) (Assessee) (Respondent)

For Appellant: Shri M.M. Golvala, AdvocateFor Respondent: Shri Annavaram Kosuri, Sr. DR
Section 143(3)Section 23(1)(a)Section 23(4)

Capacite Infraprojects Limited, Mumbai vs. ACIT/DCIT Central Circle 1(2), Mumbai

The appeal of the assessee are allowed in above terms

ITA 6315/MUM/2024[2017-18]Status: DisposedITAT Mumbai10 Sept 2025AY 2017-18

Bench: Shri. Om Prakash Kant & Shri. Raj Kumar Chauhan

Section 115JSection 132Section 153ASection 23(1)Section 250Section 270ASection 36(1)(VA)Section 9

Capacite Infraprojects Limited, Mumbai vs. ACIT/DCIT Central Circle 1(2) Mumbai, Mumbai

The appeal of the assessee are allowed in above terms

ITA 6309/MUM/2024[2018-19]Status: DisposedITAT Mumbai10 Sept 2025AY 2018-19

Bench: Shri. Om Prakash Kant & Shri. Raj Kumar Chauhan

Section 115JSection 132Section 153ASection 23(1)Section 250Section 270ASection 36(1)(VA)Section 9

Rohan Housing Pvt. Ltd., Pune vs. DCIT Central Circle-1(2), Pune

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

ITA 622/PUN/2025[2017-18]Status: DisposedITAT Pune16 May 2025AY 2017-18

Bench: Dr.Dipak P. Ripote & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.622/Pun/2025 िनधा"रण वष" / Assessment Year: 2017-18 Rohan Housing Private V The Deputy Limited, S. Commissioner Of Income 1-Modibaug, Commercial Tax, Central Circle-1(2), Building, Shivajinagar, Pune. Ganeshkhind Road, Near Agriculture College, Pune – 410016. Maharashtra. Pan: Aadcr6403N Appellant/ Assessee Respondent / Revenue Assessee By Shri Sarvesh Kandelwal – Ar Revenue By Shri Vinod Pawar – Addl.Cit(Dr) Date Of Hearing 07/05/2025 Date Of Pronouncement 16/05/2025 आदेश/ Order Per Dr. Dipak P. Ripote, Am: This Appeal Filed By The Assessee Is Against The Order Of Ld.Commssioner Of Income Tax(Appeal)/Addl.Cit[Nfac] Passed Under Section 250 Of The Act, 1961, Passed Under Section 250 Of The Income Tax Act, 1961 For The A.Y.2017-18, Dated 06.01.2025.The Assessee Has Raised The Following Grounds Of Appeal :

Section 23(4)Section 250Section 250(4)Section 250(6)Section 251Section 251(1)(a)

Ashishkumar Shashikant Doshi, Palanpur vs. The Dy.CIT, Circle Gandhinagar, Gandhinagar

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

ITA 1399/AHD/2024[2016-17]Status: DisposedITAT Ahmedabad01 May 2025AY 2016-17

Bench: Dr. B.R.R. Kumarshri T.R. Senthil Kumar

For Appellant: Shri Parin S. Shah, ARFor Respondent: Shri S.K. Agal, Sr DR
Section 143(3)Section 14ASection 23(4)Section 250Section 36(1)(iii)

Sattyasheel Nandlal Naik(HUF), Pune vs. DCIT, Circle-6, Pune

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

ITA 761/PUN/2024[2017-18]Status: DisposedITAT Pune08 Apr 2025AY 2017-18

Bench: Shri R. K. Panda & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.761/Pun/2024 िनधा"रण वष" / Assessment Year : 2017-18 Sattyasheel Nandlal Naik Vs. Dcit, Circle-6, Pune. (Huf), 878, Shukrawar Peth, Pune- 411002. Pan : Aaahn5509B Appellant Respondent Assessee By : Shri S. N. Puranikh Revenue By Shri Arvind Desai : Date Of Hearing : 16.01.2025 Date Of Pronouncement : 08.04.2025 आदेश / Order Per Vinay Bhamore, Jm: This Appeal Filed By The Assessee Is Directed Against The Order Dated 23.03.2024 Passed By Ld. Cit(A)/Nfac For The Assessment Year 2017-18. 2. The Appellant Has Raised The Following Grounds Of Appeal :- “1. Cit(Appeals) Has Erred On Facts & Law In Confirming The Addition To Income Of Rs.54,99,635/- On Account Of Income From House Property U/S 23(4) Of I.T. Act.

For Appellant: Shri S. N. Puranikh
Section 143(2)Section 23(4)

Late Smt. Priti A. Gandhi L/R. Shri Anilbhai A. Gandhi, Rajkot vs. The Pr. CIT-1, Rajkot

ITA 57/RJT/2021[2015-16]Status: DisposedITAT Rajkot17 Mar 2025AY 2015-16
Section 10(38)Section 143(3)Section 24Section 244ASection 263Section 68

Miss Pari Anil Gandhi, Rajkot vs. The Pr. CIT-1, Rajkot

ITA 51/RJT/2021[2015-16]Status: DisposedITAT Rajkot17 Mar 2025AY 2015-16
Section 10(38)Section 143(3)Section 24Section 244ASection 263Section 68

ACIT - 14(1)(2), Mumbai vs. Sabarmati Capital One Limited, Mumbai

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

ITA 3687/MUM/2023[2015-16]Status: DisposedITAT Mumbai25 Feb 2025AY 2015-16

Bench: Shri Saktijit Dey, Hon'Ble & Shri Narendra Kumar Billaiya, Hon'Ble

For Appellant: Ms. Fereshte Sethna - AdvocateFor Respondent: Shri Dr. Kishor Dhule, CIT D/R
Section 143(3)Section 22Section 23(4)Section 23(5)Section 24Section 263

Maax Super Speciality Hospital, Shimoga vs. Income Tax Officer, Ward 1, Shimoga

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

ITA 1966/BANG/2024[2017-2018]Status: DisposedITAT Bangalore28 Nov 2024AY 2017-2018

Bench: Shri Waseem Ahmed & Shri Keshav Dubeyassessment Year: 2017-18

For Appellant: Shri Pranay Sharma, AdvocateFor Respondent: Shri V Parithivel, JCIT (DR)
Section 12ASection 138

Arihant Vastunirman Private Limited, Ratnagiri vs. Assistant Commissioner of Income Tax, Circle 1, Kolhapur

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

ITA 448/PUN/2024[2017-18]Status: DisposedITAT Pune23 Oct 2024AY 2017-18

Bench: Shri R. K. Panda & Shri Vinay Bhamoreआयकर अपील सं. / Ita No.448/Pun/2024 िनधा"रण वष" / Assessment Year: 2017-18 Arihant Vastunirman Private Vs. Acit, Circle-1, Kolhapur. Limited, Office No.1, Siddhivinayak Community Hall, Shivaji Nagar, Siddhivinayak Nagar, Ratnagiri- 415612. Pan : Aakca4408K Appellant Respondent Assessee By : Shri Pramod S. Shingte Revenue By : Shri Ramnath P. Murkunde Date Of Hearing : 14.08.2024 Date Of Pronouncement 23.10.2024 : आदेश / Order Per Vinay Bhamore, Jm: This Appeal Filed By The Assessee Is Directed Against The Order Dated 16.02.2024 Passed By Ld. Cit(A)/Nfac For The Assessment Year 2017-18. 2. The Appellant Has Raised The Following Grounds Of Appeal :- “1. On The Facts & Circumstances Of The Case & In Law The Ld. Cit(A) Erred In Confirming The Addition By The A.O. Of Rs.34,14,922/- Representing Notional Rental Income In Respect Of Unsold Flats Forming Part Of Closing Inventory Of The Appellant.

For Appellant: Shri Pramod S. ShingteFor Respondent: Shri Ramnath P. Murkunde
Section 143(2)Section 23(4)Section 23(5)

M/S. Varun Developers, Pune vs. ACIT, Circle 2, Pune

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

ITA 613/PUN/2024[2016-17]Status: DisposedITAT Pune10 Sept 2024AY 2016-17

Bench: SHRI R. K. PANDA (Vice President), SHRI VINAY BHAMORE (Judicial Member)

For Appellant: Shri Nikhil PathakFor Respondent: Shri Sourabh Nayak
Section 143(2)Section 143(3)Section 22Section 23(1)(c)Section 24Section 80I

Doddamane Anand Basappa, Kodagu vs. Income-Tax Officer, Ward-1, Madikeri

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

ITA 779/BANG/2024[2020-21]Status: DisposedITAT Bangalore16 Jul 2024AY 2020-21

Bench: Shri George George K & Shri Waseem Ahmed

For Appellant: Shri Ravi Shankar S.V, AdvocateFor Respondent: Ms. Matta Padma, Addl. CIT (DR)
Section 12ASection 138Section 142(1)

Doddamane Anand Basappa, Kodugu vs. Income Tax Officer, Ward-1, Madikeri

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

ITA 778/BANG/2024[2018-19]Status: DisposedITAT Bangalore16 Jul 2024AY 2018-19

Bench: Shri George George K & Shri Waseem Ahmed

For Appellant: Shri Ravi Shankar S.V, AdvocateFor Respondent: Ms. Matta Padma, Addl. CIT (DR)
Section 12ASection 138Section 142(1)