TaxTMI 
TaxTMI 
2021 (1) TMI 360
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.... from trading assets will not be chargeable to tax u/s.22 and thus, Section 23 would not have any application. Further, relying on the decision of the Hon'ble Apex Court in the case of M/s. Chennai Properties & Investments Ltd. vs. CIT, he submitted that since the assessee has constructed a mall/shopping complex with the intention to exploit it by way of complex commercial activities, such activity falls within the realm of the head 'profits and gains of business or profession' and accordingly, section 23 will not apply. 3. After considering the submission of the assessee, AO observed that the contention of the assessee is not found tenable on the following reasons:- a. As per the agreement of sale submitted by the assessee, it is seen that the developers have the sole and exclusive right to sell or lease shops, stalls, offices, storage spaces, other units and premises in the said Commercial Building being constructed by the developers on the said property and to enter into agreements and to receive the sale price in respect thereof. b. The developer received the possession of the land which is constructed the impugned building. The date, on which the assessee rece....
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....dition made on account of income from house property despite the fact that the provision of the act does not distinguish or exempt any business asset being the closing stock in the instant case from chargeability of income from house property?" 7. At the outset, Ld. AR appearing on behalf of the assessee submitted before us that Ld. CIT(A) has discussed these issues elaborately in its order and he brought to our notice para no. 6 (6.1 to 6.3), wherein Ld. CIT(A) by following the decision of ITAT in ITA No. 6037/Mum/2016 in assessee's own case for Assessment Year 2012-13 on similar issues, has decided these grounds in favour of the assessee. 8. On the other hand Ld. DR relied upon the orders passed by AO, however he conceded that these grounds are covered by the order of Coordinate Bench of ITAT. 9. Considered the rival submissions and material placed on record. We notice from the record that the identical ground raised in the present appeal has already been decided by the Coordinate Benches of ITAT in ITA No. 6037/Mum/2016 in assessee's own case for Assessment Year 2012-13 on merits. For the sake of clarity, which is reproduced below:- 5. We have heard the rival submissions, p....
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....h holding that in the case of property held as stock in trade the income should be assessable under the head 'income from business' and no income shall be brought to tax as notional annual letting value under the head 'income from house property'. 6. The learned D.R., on the other hand, vehemently supported the orders of Authorities below. He also placed reliance decision of the Hon'ble Delhi High Court in the case of Ansal Housing Finance & Leasing Co. Ltd. (supra) 7. We have heard the rival submissions and perused the orders of the authorities below and the decisions relied upon. It is an undisputed fact that the assessees are in the business of builders, developers and construction. Both the assessees have constructed various projects and the projects were treated as stock in trade in the books of account. Flats sold by the assessees were assessed under the head 'income from business'. There were certain unsold flats in stock in trade which the AO treated as property assessable under the head 'income from house property' and computed notional annual letting value on such unsold flats placing reliance on the decision in the case of Ansal Housing Finance & Leasing Co. Ltd.....
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....property, right from the beginning was a 'stock-in-trade'." 9. Similarly the Coordinate Bench has considered similar issue as to whether the unsold property which is held as stock in trade by the assessee can be assessed under the head 'income from house property' by notionally computing the annual letting value from such property and the Coordinate Bench considering the decision of the Hon'ble Delhi High Court in the case of Ansal Housing Finance & Leasing Co. Ltd. (supra) which the AO relied upon and the decision of the Hon'ble Supreme Court in the case of Chennai Properties & Investments Ltd. vs. CIT reported in 373 ITR 673, held that unsold flats which are in stock in trade should be assessed under the head 'business income' and there is no justification in estimating rental income from those flats and notionally computing annual letting value under Section 23 of the Act. While holding so the Coordinate Bench observed as under: - "3. The ld. AR placed the order of Bombay Tribunal in the case of M/s Perfect Scale Company Pvt. Ltd., ITA Nos.3228 to 3234/Mum/2013, order dated 6-9-2013, wherein it was held that in respect of assets held as business, income from ....