TaxTMI 
TaxTMI 
2018 (10) TMI 1910
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....1st and 2nd ground of appeal 1. The Ld. CIT(A), erred in law & on facts in confirming order of the Assessing Officer in adding the ALV of the unsold units which constitutes stock-in-trade of the appellant as "Income from house property" u/s 22 of the Income Tax Act, 1961. 2. The appellant prays that the order passed u/s143(3) adding sum of Rs. 1,55,07,727/- as ALV of the unsold units under the head "Income from house property" is bad in law & should be quashed. 3. Briefly stated, the facts are that the appellant is in the business of real estate development. During the year under consideration, its project Western Edge, Ananta & 351 Icon got completed. The appellant has offered income in respect of sale of flats/units i....
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....ed an appeal before the Ld. CIT(A). The Ld. CIT(A) relied on the decision in Ansal Housing Finance & Leasing Co. Ltd. (supra) and observing that the facts in the case of the appellant are identical to the facts in the above case, confirmed the addition of Rs. 1,55,07,727/- made by the AO. 5. Before us, the Ld. counsel of the assessee files a Paper Book containing the judgement of the Hon'ble Gujarat High Court in CIT v. Neha Builders P. Ltd. 296 ITR 661 and the order of the ITAT Mumbai in the case of Runwal Constructions v. ACIT (ITA Nos. 5408/Mum/2016 and 5409/Mum/2016 dated 22.02.2018), ITO v. Arihant Estates Pvt. Ltd. (ITA No. 6037/Mum/2016 dated 27.06.2018), C R Developments P. Ltd. v. JCIT (ITA No. 4277/Mum/2012 dated 13.05.2015), S....
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....n of construction of the property is obtained from the competent authority, shall be taken to nil." Thus, in order to give relief to Real Estate Developers, section 23 has been amended w.e.f. AY 2018-19 (FY 2017-18). By this amendment, it is provided that if the assessee is holding any house property as his stock-in-trade which is not let out for the whole or part of the year, the annual value of such property will be considered as Nil for a period up to one year from the end of the financial year in which a completion certificate is obtained from the competent authority In view of the above amendment to section 23, we are not adverting to the case laws relied on by the Ld. counsel and Ld. DR. In the instant case, the assessee is i....
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.... loan advanced by it. In this regard, reliance is placed by him on the decision in CIT v. Reliance Utilities & Power Ltd. 313 ITR 340 stating that no disallowance of interest u/s 36(1)(iii) is required to be made if the assessee had sufficient interest-free funds to cover the loans advanced by it. Also it is submitted that due to lack of professional advice, the said documents could not be produced before the lower authorities. It is stated that these additional evidences would go to the root of the matter in deciding whether the assessee had sufficient interest-free funds in the respective years in which the advances were given. In respect of the principles of admitting additional evidence, the Ld. counsel refers to the decision in....
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....d. In response to it the assessee submitted that its own funds plus non-interest bearing funds are sufficient enough to cover interestfree friendly loans and advances made. However, the AO was not convinced with the above explanation of the assessee and relying on the decision in the case of Punjab Stainless Steel Inds (2011) 324 ITR 396 (Del) held that interest paid u/s 36(1)(iii) is allowed in respect of capital borrowed for the purpose of business and profession for commercial expediency and thus disallowed proportionate interest expenses of Rs. 2,26,46,285/- on notional basis. 10. In appeal, the Ld. CIT(A) held that the assessee had failed to prove that it had interest-free funds available with it as on the date of advancing interest....
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....d overdraft and/or loans taken, then a presumption would arise that investments would be out of the interest-free funds generated or available with the company, if the interest-free funds were sufficient to meet the investments. In this case, this presumption was established considering the finding of fact both by the CIT(A) and the Tribunal. Therefore, interest was deductible. In the case of Madhav Prasad Jatia v. CIT (1979) 118 ITR 200 (SC), it has been held by the Hon'ble Supreme Court that for claiming deductions u/s 36(1)(iii), the basic requirements are: (a) the money i.e. (capital) must have been borrowed by the assessee; (b) it must have been borrowed by the assessee for his business, profession or vocation; and (c)....