TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
When case Id is present, search is done only for this
of 
of 
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of of 
All Case Laws
of of All Case Laws
Note
Bookmark
Share
Don't have an account? Register Here
of <h1>Tribunal rules in favor of assessee, deletes addition to annual letting value for unsold units held as stock-in-trade</h1> <h3>Raheja Universal Pvt. Ltd. Versus DCIT, Central Circle-4 (2), Mumbai</h3> Raheja Universal Pvt. Ltd. Versus DCIT, Central Circle-4 (2), Mumbai - TMI Issues Involved:1. Confirmation of addition of Rs. 12,22,683/- as notional deemed income from house property in respect of unsold units lying vacant held as stock-in-trade.Issue-wise Detailed Analysis:Issue No. 1:This issue was not pressed by the representative of the assessee and was decided in favor of the revenue against the assessee.Issues Nos. 2 to 6:These issues pertain to the confirmation of the addition of Rs. 12,22,683/- as notional deemed income from house property in respect of unsold units lying vacant held as stock-in-trade. The assessee argued that these issues were covered by the decision of the ITAT in the case of M/s. Saranga Estate Pvt. Ltd. Vs. Dy. Commissioner of Income Tax, Central Circle-3(4), Mumbai, ITA No.4420/Mum/2017. The relevant finding in this case was that properties held as stock-in-trade would partake the character of stock, and any income derived from stock would be income from business and not income from house property.The Tribunal referenced several judicial precedents, including the decision of the Hon’ble Gujarat High Court in the case of CIT vs. Neha Builders Pvt. Ltd., which held that properties held as stock-in-trade are to be treated as business assets, and any income derived from them should be considered business income. The Tribunal also noted that the amendment brought by the Finance Act 2017, effective from A.Y. 2018-19, which inserted sub-section (5) in Section 23 of the Act, cannot be applied retrospectively.The Tribunal further noted the conflicting views of the Hon’ble High Courts of Gujarat and Delhi in similar cases. The Gujarat High Court's decision in favor of the assessee was preferred, supported by the Supreme Court's judgment in CIT vs. Vegetable Products, which stated that if two reasonable constructions of a taxing provision are possible, the one favoring the taxpayer should be adopted.The Tribunal cited multiple ITAT decisions, including those in the cases of Chamber Construction Pvt. Ltd. vs. DCIT, ACIT-15(2)(1) Vs. M/s Haware Construction Pvt. Ltd., and M/s C.R Development Pvt. Ltd. Vs. JCIT, which consistently held that the notional lettable value of unsold flats held as stock-in-trade cannot be assessed under the head ‘Income from house property.’Based on these precedents, the Tribunal directed the AO to delete the addition made towards the annual letting value of Rs. 2,05,49,285/- in respect of stock-in-trade, thus allowing the appeal of the assessee.ITA No. 4174/Mum/2019:The facts of this case were similar to the previous case (ITA No. 4173/Mum/2019) with different figures. The Tribunal applied the same findings and allowed the appeal of the assessee partly.Conclusion:All the appeals filed by the assessee were allowed partly, with the Tribunal directing the deletion of the addition made towards the annual letting value of the unsold units held as stock-in-trade. The order was pronounced in the open court on 07/04/2021.
TaxTMI 
TaxTMI 
