TaxTMI 
TaxTMI 
2021 (7) TMI 217
X X X X Extracts X X X X
X X X X Extracts X X X X
....annual letting value of unsold flats in case of builders and the construction companies would be taxable under the head 'Income from House Property' or not in view of the divergent views taken by the Tribunal. Thereafter, the very same issue was decided by the Co-ordinate Bench of this Tribunal in several other cases which are listed in para 3 of the Memorandum of condonation of delay filed by the assessee. Accordingly, the assessee pleaded that the subsequent decisions of this Tribunal on the impugned issue of taxability of annual letting value in respect of unsold stocks in the case of builder / construction companies would tantamount to sufficient cause for the delay and accordingly, prayed for the condonation of delay in filing of the appeals before this Tribunal. The ld. DR vehemently objected to the said condonation on the ground that assessee had adopted "wait and watch approach". The decision not to file any appeal originally was a conscious decision taken by the assessee and merely because this Tribunal had rendered favourable decision in some other assessee's case on the very same issue, the assessee also wanted to take the benefit out of it and accordingly, had preferre....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ndonation of such delay:- Guidelines laid down by the Hon'ble Supreme Court in the case of Collector Land Acquisition -vs.- Katiji & Others: "The legislature has conferred the power to condone delay by enacting Section 51 of the Indian Limitation Act of 1963 in order to enable the Courts to do substantial justice to parties by disposing of matters on 'merits'. The expression "sufficient cause" employed by the legislature is adequately elastic to enable the courts to apply the law in a meaningful manner which subserves the ends of justice -that being the life-purpose for the existence of the institution of Courts. It is common knowledge that this Court has been making a justifiably liberal approach in matters instituted in this Court. But the message does not appear to have percolated down to all the other Courts in the hierarchy. And such a liberal approach is adopted on principle as it is realized that:- "Any appeal or any application, other than an application under any of the provisions of Order XXI of the Code of Civil Procedure, 1908, may be admitted after the prescribed period if the appellant or the applicant satisfies the court that he had sufficient cause for....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... of limitation are not meant to destroy the rights of the parties. They are meant to see that parties do not resort to dilatory tactics but seek their remedy promptly. The idea is that every legal remedy must be kept alive for a legislatively fixed period of time. 12. A court knows that refusal to condone delay would result in foreclosing a suitor from putting forth his cause. There is no presumption that delay in approaching the Court is always deliberate. This Court has held that the words "sufficient cause" under Section 5 of the Limitation Act should receive a liberal constitution so as to advance substantial justice vide Shakuntala Devi Jain v. Kuntal Kumari and State of W.B. v. Administrator, Howrah Municipality. 13. It must be remembered that in every case of delay, there can be some lapse on the part of the litigant concerned. That alone is not enough to turn down his plea and to shut the door against him. If the explanation does not smack of mala fides or it is not put forth as part of a dilatory strategy, the Court must show utmost consideration to the suitor. But when there is reasonable ground to think that the delay was occasioned by the party deliberately to gai....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e project namely Wanwadi Project- Pune in sum of Rs. 6,97,95,580/-, Vakola Project in sum of Rs. 43,01,115/- & Radhanarayan in sum of Rs. 1,13,38,000/-, the total in sum of Rs. 8,54,34,695/- but the AO has wrongly assessed the notional income and assessed the tax in view of the provisions u/s 23/ 24 of the Act and added in sum of Rs. 39,75,545/- to the income of the assessee, hence, the finding of the CIT(A) confirming the order of the AO is wrong against law and facts and are liable to be set aside. The Ld. Representative of the assessee has argued that the case of the assessee has duly being covered by the decision of the Hon'ble ITAT in the case of Ferani Hotels Pvt. Ltd. Vs. ACIT Central Circle 4(1) in ITA. No. 6332/M/2016 dated 21.12.2018, therefore, the claim of the assessee is liable to be allowed. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. On appraisal of the record and considering the argument advanced by the Ld. Representative of the parties, we observed that the assessee is carrying the business of construction and builder and developing the project. He was having the finished unit of three project situated at Wa....
X X X X Extracts X X X X
X X X X Extracts X X X X
....e property which has no doubt confirmed by CIT(A). It is to be seen whether the income of the assessee is liable to be treated as house property or business income. It is necessary to discuss the finding in the case of M/s. Runwal Constructions Vs. ACIT in ITA. No.5409/M/2016 dated 22.02.2018 which has been given in para no. 7 to 10 and are hereby reproduced as under.: - "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. (supra). The action of the AO was upheld by the learned CIT(A). 8. The Hon'ble Gujarat High Court....
X X X X Extracts X X X X
X X X X Extracts X X X X
....milarly 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 the same is not assessable u/s.23(1) of the IT Act. 4. On the other hand, l....
X X X X Extracts X X X X
X X X X Extracts X X X X
....case of M/s Chennai Properties & Investments Ltd. Vs. CIT, reported in (2015) 42 SCD 651, vide judgment dated 9-4-2015 has held that where assessee company engaged in the activity of letting out properties and the rental income received was shown as business income, the action of AO treating the rental income as income from house property in place of income from business shown by the assessee was held to be not justified. The Hon'ble Supreme Court held that since the assessee company's main object, is to acquire and held properties and to let out these properties, the income earned by letting out these properties is main objective of the company, therefore, rent received from the letting out of the properties is assessable as income from business. On the very same analogy in the instant case, assessee is engaged in business of construction and development, which is main object of the assessee company. The three flats which could not be sold at the end of the year was shown as stockin-trade. Estimating rental income by the AO for these three flats as income from house property was not justified insofar as these flats were neither given on rent nor the assessee has intention to earn ....