TaxTMI 
TaxTMI 
2019 (5) TMI 1689
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....s grossly erred in law as well as on facts in confirming the action of the Assessing Officer (AO) in charging notional income as income from house properties in respect of unsold units (both residential/commercial), which were held by the appellant as its stock in trade. 2. Without prejudice to the ground taken above, the CIT(A) has grossly erred in upholding the ALV of the unsold units (both residential/commercial) held by the appellant as stock in trade at Rs. 7,43,420/-, the estimation so made is highly exorbitant. 3. The appellant reserves its right to add to, alter, amend, modify or delete any of the grounds taken in this appeal." 2. Briefly stated, the assessee company which is engaged in the business of developer of real estates had filed its return of income for A.Y. 2012-13 on 30.11.2013, declaring income of Rs. 18,38,950/-. The return of income filed by the assessee was processed as such under Sec. 143(1) of the I.T Act. Subsequently, the case of the assessee was selected for scrutiny assessment under Sec. 143(2). 3. During the course of the assessment proceedings, it was observed by the A.O that the assessee had developed a property i.e a Plot No.....
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..... Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, the CIT(A) observing that the issue involved was squarely covered by the judgment of the Hon‟ble High Court of Delhi in the case of CIT Vs. Ansal Housing Finance & Leasing Company Ltd. (2013) 354 ITR 180 (Del), thus after necessary deliberations upheld the view taken by the A.O and sustained the addition of Rs. 5,20,394/- made by him. 5. The assessee being aggrieved with the order of the CIT(A) has carried the matter in appeal before us. The ld. Authorized Representative (for short "A.R‟) for the assessee, at the very outset of the hearing of the appeal submitted that the issue involved in the present case was squarely covered by the judgment of the Hon'ble High Court of Bombay in the case of Pr. CIT, Central-1 Vs. M/s Classique Associates Ltd. (ITA No.1216 of 2016, dated 28.01.2019) (Bom). It was submitted by the ld. A.R that the Hon‟ble High Court in its aforementioned judgment had after referring to the judgment of the Hon‟ble High Court of Gujarat in the case of CIT Vs. Neha Builder (P) Ltd. (2008) 296 ITR 661 (Guj) had concurred with the view therein taken, and had obs....
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.... vacant unsold completed flats/shops of Rs. 87,46,129/-. The A.O drawing support from the judgment of the Hon‟ble High Court of Delhi in the case of CIT Vs. Ansal Housing Finance and Leasing Company Ltd. (2013) 354 ITR 180 (Del), had concluded that the "ALV‟ of the aforesaid vacant properties held by the assessee as stock-in-trade of its business of real estate developer, was liable to be assessed under the head "Income from house property". As the assessee failed to furnish the details as regards the "Annual Rateable Value‟ of the aforementioned properties, therefore, the A.O estimated the "ALV‟ of the said properties @ 8.5% of the aggregate cost of their construction and worked out the same at Rs. 7,43,420/- (i.e 8.5% of 87,46,129/-). Further, after allowing the statutory deduction under Sec. 24(b) @ 30% of the ALV of Rs. 7,43,420/-, the A.O brought the balance amount of Rs. 5,20,394/- to tax under the head "Income from house property". 9. We have deliberated at length on the issue under consideration, in the backdrop of the observations of the lower authorities. We find that the Hon'ble High Court of Gujarat in the case of CIT Vs. Neha Builders (P) ltd....
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....appeal in the case of the "sister concern‟ of the assessee in Haware Engineers and Builders Pvt. Ltd. Vs. DCIT, Central Circle-4(2), Mumbai [ITA No. 7155/Mum/2016, dated 10.10.2018], had concluded that if an immovable property in the shape of flats/shops is held by the assessee as stock-in-trade of its business, then it becomes part of its trading operations, and any income derived there from would be its "business income‟ and not "Income from house property‟. On the basis of the aforesaid deliberations, the Tribunal while disposing off the aforesaid appeal had vacated the addition of the "ALV‟ that was made by the lower authorities in respect of the flats/shops which were held by the assessee before them as stock-in-trade of its business of a real estate developer. In fact, the Tribunal while concluding as hereinabove, had primarily relied on the view earlier taken by it in the case of another "sister concern‟ of the assessee viz. ACIT Vs. Haware Construction Pvt. ltd. [ITA No.3321/Mum/2018 & 3172/Mum/2016, dated 31.08.2018]. Apart there from, the Tribunal had also drawn support from the orders of the coordinate benches of the tribunal viz. (i) M/s Ru....