2018 (9) TMI 147

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....bmissions of the assessee and by passing a non speaking order. The same was most arbitrary, unjust, untenable and bad in fact and in law and in the alternative excessive due to following factors related to the assessment made: a. The findings of a non-comparable case were invoked b. The additions was made without have any specific provisions in The Income Tax Act, 1961 for taxing unsold stock of commercial space lying with the builder. c. Arbitrary mode of calculation has been adopted by taking a non comparable lease agreement as base. d. The addition was purely unconstitutional since the power to levy income tax comes from Entry No. 82 of The Union List or List 1 which does not cover the relevant part of case of the assessee e. N....

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....enged the action of the Assessing Officer before the ld. CIT(A) but could not succeed. 4. Before us, the ld AR of the assessee has submitted that the assessee engaged in the business of builders and developers which is the main object of the company purchased and constructed the property as stock in trade and income from such developed property is assessable as business income. Therefore they cannot be brought to tax under the head 'Income from House Property' simply because the stock / offices remain unsold at the end of the year. The unsold offices have been treated as stock in trade in books of accounts which is well accepted during the assessment proceedings and thus an undisputed fact. Income derived from the property would always be ....

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....ess. (iv) CIT Vs. Neha Builders Pvt. Ltd. 296 ITR 661 (Guj). 5. On the other hand, the ld DR has relied upon the orders of the authorities below and submitted that the Assessing Officer has followed the decision of the Hon'ble Delhi High Court and therefore, when commercial space was lying vacant, the provisions of Section 22 and 23 of the Act are applicable. 6. We have considered the rival submissions as well as relevant material on record. There is no dispute that the commercial space in the project in question was held by the assessee as stock in trade. Further the project was completed in the month of February itself, which is not in dispute as the Assessing Officer has also accepted this fact and assessed the income from house prope....

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....for which the property might reasonably be expected to let from year to year. Thus, the annual letting value of the property is a sum for which the property might reasonably be expected to let out from year to year. In other words, the fair market rent of the property expected to be fetched if let out from year to year shall be deemed to be an annual letting value for the purpose of determining income from house property. This reasonably expected rent itself signifies the possibility of letting out of the property. However, there is a time lag between the acquisition of property or completion of construction of property and letting out the property thereafter. It is not practically not possible to let out the property on the next day of com....