The Mumbai bench of the Income Tax Appellate Tribunal (ITAT) has recently granted relief to Bollywood actor Saif Ali Khan.
The assessee, in addition to his own residential flats, owned property at 12th & 13th floor of Hicon, Bandra. However, the assessee has estimated ratable value on lower side as compared to the ratable value based on size, location of the property. Further, the assessee has reduced the estimated ratable value by Municipal taxes of Rs.20,000/-. During the assessment proceedings, the assessee was asked to explain the basis of taking Annual Ratable Value of Rs.4 lakhs.
The Assessing Officer concluded that the Assessee had given no basis of showing ALV-of Rs.4 lakhs that the Assessee could not discharge his onus of substantiating his estimation, that Hicon Society had given information that Maharashtra Rent Control Act was not applicable to the Society whereas, the Assessee has reduced Municipal Tax from estimated ALV, that no supporting evidences of estimation of income is submitted that the Assessee has not given working of standard rent fixed, he has only referred to the report of Approved Valuer.
On behalf of the assessee, it was contended that the assessee was not in a position to let out the property and therefore, vacancy allowance should be granted to him.
“Once when it is accepted that the construction was not fully in accordance with the plan and some alteration was required to bring it under proper plan, it has to be accepted that the flat was not in a position to be let out dehorse removal of the defects. Furthermore, the assessee has brought on record certain letters from the real estate agents who have submitted that flat not readily lettable in the present condition. This has been rejected by the ld. Commissioner of Income Tax (Appeals) to be spurious,” the Tribunal observed.
It was concluded that in case the property or part thereof was vacant during the period, the proportion deduction should be allowed from the sum on which the property might reasonably be let out from year to year.
Relying on the relevant provisions and the judicial pronouncements, the Tribunal held that the assessee should be granted vacancy allowance.
Subscribe Taxscan Premium to view the Judgment
