2021 (12) TMI 976

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....come from house property. 3. Briefly stated the facts are that, the Assessing Officer while completing the assessment u/s. 143(3) of the Act computed the annual letting value at 8% of Rs..4,75,86,240/- being the closing stock of the flats as on 31.03.2015. Assessee contended that the notional rent cannot be charged on the unsold flats which are closing stock of the assessee. On appeal the Ld.CIT(A) sustained the order of the Assessing Officer. 4. At the outset, Ld. Counsel for the assessee submits that the issue in appeal is squarely covered by various decisions of the Mumbai benches of the Tribunal wherein the decision of the Hon'ble Gujarat High Court in the case of CIT v. Neha Builders Pvt. Ltd., [296 ITR 661] was followed. Ld. Cou....

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....ouse property". It is also noticed that similar issue had come up in the case of M/s. Runwal Constructions v. ACIT in ITA.No. 5408/Mum/2000 dated 22.02.2018 wherein the Tribunal held 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....

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....ess' and the business stocks, which may include movable and immovable, would be taken to be 'stock-in-trade', and any income derived from such stocks cannot be termed as 'income from property'. Even otherwise, it is to be seen that there was distinction between the 'income from business' and 'income from property' on one side, and 'any income from other sources'. The Tribunal, in our considered opinion, was absolutely unjustified in comparing the rental income with the dividend income on the shares or interest income on the deposits. Even otherwise, this question was not raised before the subordinate Tribunals and, all of sudden, the Tribunal started applying the analogy 9. From the statement of....

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....ess, income from the same is not assessable u/s.23(1) of the IT Act. 4. On the other hand, ld. DR relied on the order of Hon'ble Delhi High Court in the case of Ansal Housing Finance & Leasing Co. Ltd., 354 ITR 180 (Delhi) in support of the proposition that even in respect of unsold flats by the developer is liable to be taxed as income from house property. 5. We have considered rival contentions and perused the record. The issue under consideration has been restored by the CIT(A) to the file of AO to compute the annual value. Recently the Hon'ble Supreme Court in the 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 ....