| Case ID |
2154d52f-627d-4920-9b67-d327d8e3ddaf |
| Body |
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| Case Number |
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| Decision Date |
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| Hearing Date |
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| Decision |
The tribunal's ruling was overturned as the conditions for deduction under section 24(1)(x) were not satisfied. The court found that the assessee had not taken all reasonable steps to evict the tenant or to recover the unpaid rent. The Soviet Consulate had offered to pay the rent, but the assessee refused to accept it, leading to the conclusion that the rent was indeed realizable. Therefore, the court ruled that the assessee was not entitled to claim the deduction for unrealized rent as the necessary legal prerequisites were not met. |
| Summary |
In the case of Commissioner of Income Tax v. Dejoo Tea Co. (India) P. Ltd., the Calcutta High Court examined the eligibility for deductions under section 24(1)(x) of the Income-tax Act, 1961, concerning unrealized rent. The assessee claimed deductions for income from house property after the lease with the Soviet Consulate expired. The original lease had terminated, and the tenant ceased to pay rent, leading the assessee to declare nil rental income. The Income Tax Officer estimated the property’s annual value at Rs. 96,000, which was upheld by the Commissioner of Appeals. The tribunal initially found in favor of the assessee, suggesting that the conditions for claiming unrealized rent were met. However, the High Court concluded that the assessee had not taken adequate legal steps to recover the rent or evict the tenant, thus ruling that the rent was, in fact, realizable. The decision emphasizes the importance of fulfilling legal obligations and pursuing recovery actions to substantiate claims for deductions under tax law. Key terms: unrealized rent, Income-tax Act, deductions, legal proceedings, rental income. |
| Court |
Calcutta High Court
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| Entities Involved |
Income Tax Department,
Dejoo Tea Co. (India) P. Ltd.,
Soviet Consulate
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| Judges |
AJIT K. SENGUPTA,
SHYAMAL KUMAR SEN
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| Lawyers |
Khaitan
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| Petitioners |
Dejoo Tea Co. (India) P. Ltd.
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| Respondents |
Commissioner of Income Tax
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| Citations |
1992 SLD 1696 = (1992) 197 ITR 278
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| Other Citations |
Not available
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| Laws Involved |
Income-tax Act, 1961,
Income-tax Rules, 1962,
Code of Civil Procedure, 1908
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| Sections |
24(1)(x),
Rule 4,
86
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