ITAT Deletes Addition on Waived Rental Income During Covid
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- Last Updated on 8 May, 2026
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Case Details: Integrated Promoters (P.) Ltd. vs. Deputy Commissioner of Income-tax [2026] 185 taxmann.com 971 (Delhi-Trib.)
Judiciary and Counsel Details
- Anubhav Sharma, Judicial Member & Manish Agarwal, Accountant Member
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Pranav Yadav, Adv. for the Appellant.
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Jitender Singh, CIT-DR for the Respondent.
Facts of the Case
The assessee declared rental income of Rs. 8.25 lakhs in the return of income. As per the amended rent deed executed between the parties due to Covid-19, rent for April to June 2021 was waived, rent for July 2021 was fixed at Rs. 0.75 lakh, and the monthly rent for the remaining period was fixed at Rs. 1.50 lakh. The assessee stated that it raised invoices only for the period from July to December and declared a total rent of Rs. 8.25 lakhs.
During the assessment proceedings, the Assessing Officer (AO) alleged that the assessee had shown rental income of Rs. 8.25 lakhs. In contrast, the actual rental income was Rs. 13.75 lakhs, resulting in a difference of Rs. 5.50 lakhs. AO made an addition under Section 22 after allowing 30% deduction under Section 24(a) on the alleged difference.
Aggrieved-assessee filed an appeal to CIT(A) against the additions made by the AO. The CIT(A) upheld the additions. The assessee filed an appeal to the Tribunal.
ITAT Held
The Tribunal held that the assessee declared rental income in the return of income and the GST returns. The GST returns showed a total rent of Rs. 11.75 lakhs, with a credit note of Rs. 3.85 lakhs, leaving a balance of Rs. 8.25 lakhs, as per the GST Act. The assessee raised invoices for the rent of a certain period and declared the rental income in the GST returns. The GST returns were filed without any qualification or disclaimer. Therefore, the assessee had received rent of only Rs. 8.25 lakhs, which was declared in the GST returns.
Since the assessee had not raised any bills for the rent of the remaining period, there was no occasion to hold that the assessee also received the rent for the remaining period. Accordingly, the additions made by AO were to be deleted.
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