2022 (11) TMI 1287

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....for the assessment year 2017-18. The impugned order was generated from the order of the learned Assistant Commissioner of Income Tax, Circle-28(3)/ Mumbai, order passed u/s 143(3) dated 16.12.2019. 2. Brief fact of the case is that the assessment was completed for the assessment year 2017-18 u/s 143(3) of the Act. The Ld. PCIT issued notice u/s 263 for not declaring of deemed rent in the return of income and ld. A.O. erroneously passed the order without considering the same. The assessee declared a rental income for renting out of show room of Rs. 68,70,528/- {before deduction of 24(a)} in the total income of the assessee and the income was assessed accordingly. According to Ld. PCIT the unsold property which was held in the stock in tra....

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....is notice the assessee had made submission dated 17.03.2022 and replied that this deemed rent u/s 23(5) is not applicable for the assessment year 2017-18 as the said section 23(5) of the Act has been inserted by Finance Act, 2017 w.e.f. 01.04.2018. In this respect, the learned counsel of the assessee relied on the order of the Coordinate Bench of ITAT in the case of Tata Housing Development Company Limited vs. PCIT -8, Mumbai in ITA No. 3492 & 3493/MUM/2019 dated 28.09.2020. Accordingly, Section 263 of the Act is not applicable for the assessee. 3.1 Third notice was issued on 17.03.2022 u/s 263 by the Ld. PCIT mentioning that the last show cause notice there was typographical mistake and section 23(5) should be read as 23(1) of the Act a....

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....king the assessment, reasonable opportunity of being heard shall be allowed to the assessee by the AO." 4. The ld. DR vehemently argued and relied on the order of the Ld. PCIT. No other contrary submission was made by the ld. DR against the submission of the assessee. 5. We heard the rival submission of both parties and considered the documents available in the record. The Ld. PCIT during the proceedings u/s 263 of the Act had issued multiple notice to prove the order of the Ld. A.O. as erroneous. It is clear that section 23(5) of the Act is not applicable for the assessee for this assessment year. The assessee explained and replied to the revenue about the issues in response to the notices of the Ld. PCIT. The formation of the opinio....