Addition made to be deleted if no lease rental received for relevant assessment year: ITAT

Addition made to be deleted if no lease rental received for relevant assessment year: ITAT

The assessee along with two others had purchased two immovable properties which were leased to M/s. IBIBO Group Private Limited. As per the lease agreement, the lease rentals are to be paid from the date of handing over the building to the lessee. The Assessing Officer, however, held that the rental income of the property commenced on 01.02.2016 and the property was vacant throughout the year therefore, the assessee had not admitted any rental Income. Aggrieved, the assessee filed an appeal before the first appellate authority. The CIT(A) held that the taxable house property Income from the property is worked out at Rs. 23,54.940 after allowing deductions and penalty proceedings u/s 271(1)(c) is also initiated on account of filing wrong particulars of income and for concealing the particulars of income for the year under house property income. Aggrieved an appeal was filed with the tribunal which observed that it is not in dispute that the properties in question were earlier let out but remained vacant and could not be let out for the year under consideration since those were inhabitable. As the lease rental received for the relevant assessment year is `Nil’, the same has to be adopted instead of ALV as ordered by the CIT(A). Further, the lease rental received by the assessee from 01.06.2016 was disclosed under the head “income from house property” for the subsequent assessment year, namely, A.Y. 2017-2018 onwards. For the aforesaid reasons, the Tribunal deleted the addition made by the CIT(A). The assessee has not brought on record any documentary evidence to show that it had incurred interest expenditure of Rs.2,89,211 as against the income assessed under the head's income from other sources. Therefore, the addition sustained by the CIT(A) to the extent of Rs.1,83,003 was confirmed. Hence, the appeal filed by the assessee was partly allowed.