IN INCOME TAX APPELLATE TRIBUNAL DELHI BENCH: F NEW DELHI BEFORE SMT DIVA SINGH, JUDICIAL MEMBER AND SH.O.P.KANT, ACCOUNTANT MEMBER I.T.A .No.-1100/Del/2014 (ASSESSMENT YEAR-2008-09) Renu Shamlal, vs ACIT, C/o-R.N.Marwah & Co., CA, Circle-32(1), 4/80, Janpath, New Delhi-110001. New Delhi PAN-AAXPS2831A (APPELLANT) (RESPONDENT) Appellant by Sh.U.N.Marwah, FCA Respondent by Sh. V.R.Sonbhadra, Sr, DR Date of Hearing 22.06.2016 Date of Pronouncement 21.09.2016 ORDER PER DIVA SINGH, JM present appeal has been filed by assessee assailing correctness of order dated 26.12.2013 of CIT(A), XXI, New Delhi pertaining to 2008 09 assessment year on following grounds:- 1. That on facts and in law CIT(A) erred in determining ALV of residential house at 15,Chinar Drive, DLF Chattarpur, New Delhi, Lying vacant during year u/s 23(1 )(a) r.w.s 23(4)(b) of Income Tax Act, 1961 at Rs. 12,00,000/- as deemed income under head Income from "House Property" for reasons stated in impugned order. 2. That CIT(A) Failed to consider and appreciate that Annual Letting Value be determined at Nil in terms of Section 23(1)(c) as declared by appellant. 3. That appellant craves leave, to add, alter, amend, forgo, and substitute any or all grounds of appeal before or at time of hearing. I.T.A .No.-1100/Del/2014 2. appeal came up for hearing on 14.06.2016 wherein Ld.AR filing synopsis submitted that issue is covered in favour of assessee by orders of ITAT. Reliance was placed on copies of decision already placed on record in Paper Book filed. Time was sought by Revenue and appeal was adjourned to 21.06.2016. On next date, Ld.AR again reiterated that issues are covered by orders of ITAT in its favour. Revenue again sought short adjournment and adjournment was granted. 3. Accordingly, appeal again came up for hearing. Ld.AR relying upon synopsis filed submitted that material facts are that assessee owns following two residential houses:- i). DLF Chattarpur, Delhi which till A.Y.2007-08 was let out and during year under assessment was lying vacant with intention to let out. ii). second house at Kasauli (Himachal Pradesh) was under self occupation being used for vacation purposes. 3.1. It was also submitted that assessee since her marriage in 1979 including year under consideration has been living with her family members in 17, Birbal Road, New Delhi which is official address for income tax purposes owned jointly by her husband and mother-in-law. Reference to these facts is found recorded in assessment order and impugned order. It was his submission that AO invoked provisions of section 23(1)(a) of Act r.w.s 23(4)(b) and adopted annual letting value of residential property situated at 15, Chinar, DLF Chatarpur as Rs.13,20,000/- as against Rs.1 lac per month on which it was let out in preceding assessment year Page 2 of 6 I.T.A .No.-1100/Del/2014 and increasing same at 10% taking per month rent at Rs.1,10,000/-. It was submitted that fact on record is that said property in year under consideration was lying vacant and that CIT(A) in para 4.2 rejecting main plea of assessee that ALV on basis of section 23(1)(c) should be at NIL upheld applicability of section 23(1)(a) r.w.s. 23(4b) and granted part relief by reducing ALV of residential house at 15, Chinar, DLF Chatarpur lying vacant to Rs.12 lacs as deemed income under head income of house property and upholding addition to extent of Rs.8 lacs deleting balance addition of Rs.40,000/-. In said background Ld.AR submitted that there is no dispute on fact that said property was lying vacant. reasons for property lying vacant it was submitted has all along remained same, namely that assessee was making attempts to find another tenant however due to recession in property rentals assessee could not let out specific property. Accordingly relying upon section 23(1)(c), it was submitted that ALV should be taken as NIL as against Rs.8 lacs as confirmed by CIT(A). Reliance was placed upon ACIT, Delhi vs Prabha Sanghi para 10, 13 [2013] (1) TMI 18; Kamal Mishra vs ITO, Ward 31(2) [2008] 19 SOT 251 (Delhi); and DLF Office Developers v ACIT, Delhi [2008] 23 SOT 19 (DELHI) and Prem Sudha Exports Pvt. Ltd. vs ACIT 17 SOT 293 (Mum.). 4. Ld. Sr. DR, Mr. Sonbhadra relied upon impugned order. No contrary decision in support of Revenue was cited. Nor any distinction on Page 3 of 6 I.T.A .No.-1100/Del/2014 facts from decisions cited by Ld.AR in support of assessee s case was attempted. 5. We have heard rival submissions and perused material available on record. It is seen that ownership of 2 properties by assessee is not in dispute and it is admitted fact that 15, Chinar Drive DLF Chatarpur, New Delhi which had been rented in earlier years @ Rs.1 lac per month. In year under consideration admittedly it has been lying vacant. property situated at Kasoli is accepted as self-occupied property used for vacation purposes. assessee it has been stated has been residing in her marital home alongwith her husband and mother-in-law. In these circumstances, issue which devolves for consideration in terms of grounds raised by assessee relying on section 23(1)(c) is can value of said property be taken at NIL since property remained admittedly vacant as assessee due to recession in market was unable to find tenant. These facts are admitted facts on record since as per page 5 of AO and page para 4 of impugned order in 2007-08 AY, said property was lying vacant for three months and in year under consideration it remained vacant for entire year and infact for three months in 2010-11 AY also said property admittedly was lying vacant. AO has considered this fact however claim on grounds of recession in market and inability to find tenant has been dismissed by AO on grounds that provisions of section 23(1)(c) would become prone to misuse. We find that considering judicial precedent cited where facts are not in dispute Ld.CIT(A) erred in rejecting Page 4 of 6 I.T.A .No.-1100/Del/2014 claim on specious reasoning that provisions could be misused. Section 23(1)(c) was introduced by Finance Act, 2001 w.e.f 01.04.2002. For ready-reference, same is reproduced hereunder:- 23. (1) For purposes of section 22, annual value of any property shall be deemed to be- (a) sum for which property might reasonably be expected to let from year to year; or (b) Where property or any part of property is let and actual rent received or receivable by owner in respect thereof is in excess of sum referred to in clause (a), amount so received or receivable; or (c) Where property or any part of property is let and was vacant during whole or any part of previous year and owing to such vacancy actual rent received or receivable by owner in respect thereof is less than sum referred to in clause (a), amount so received or receivable. (emphasis provided) 6. fact that said property has been let out by assessee in immediately preceding assessment year for 9 months is fact. Thus property has been let out in earlier years is not disputed. fact that due to recession in market it could not be let out is consistently claimed. CBDT Circular No.14 of 2001-252 ITR Statute para 29 unambiguously explains that said amendment was brought out to rationalize provisions of Act so as to simplify determination of ALV. Considering facts which have not been disputed and above provision of law, we find that in light of judicial precedent cited namely ACIT, Delhi vs Prabha Sanghi para 10, 13 [2013] (1) TMI 18; Kamal Mishra vs ITO, Ward 31(2) [2008] 19 SOT 251 (Delhi); and DLF Office Developers v ACIT, Delhi [2008] 23 SOT 19 (DELHI) and Prem Sudha Exports Pvt. Ltd. vs ACIT 17 SOT 293 (Mum.), and noting that no Page 5 of 6 I.T.A .No.-1100/Del/2014 contrary view has been cited by Revenue despite more than ample opportunity, we find that appeal of assessee has to be allowed. 7. In result, appeal of assessee is allowed. order is pronounced in open court on 21st September 2016. Sd/- Sd/- (O. P.KANT) (DIVA SINGH) ACCOUNTANT MEMBER JUDICIAL MEMBER *Amit Kumar* Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR, ITAT NEW DELHI Page 6 of 6 Renu Shamlal v. ACIT, Circle-32(1), New Delhi