TaxTMI 
TaxTMI 
2024 (8) TMI 861
X X X X Extracts X X X X
X X X X Extracts X X X X
.... and in law, the Commissioner of Income tax (Appeals)-1, New Delhi [briefly "the CIT(A)"] did not appreciate the ratio of Chennai Properties & Investments Ltd. v. CIT (2015) 373 ITR 673 (SC) in upholding the addition on account of notional annual letting value made under section 22 of Income tax Act, 1961 ('the Act'). 1.1 That on facts and circumstances of the case and in law, the CIT(A) did not appreciate that closing stock of business of real estate is outside the ambit of section 22 of the Act. 2 That on facts and circumstances of the case and in law, the CIT(A) did not appreciate that out of total inventory of constructed area of 4,95,300.70 sqft in 35 projects, area of 23,744.56 sqft was actually let out and rental income derived there-from was duly declared in P&L A/c and was assessed to tax. 2.1 That on facts and circumstances of the case and in law, the CIT(A) has erred in sustaining addition of Rs. 82,78,816/-being notional ALV of 23744.56 sq.ft. area of inventory of closing stock actually let out allegedly for the reason that the issue was not separately raised in the grounds of appeal. 3. That on facts and circumstances of the case and in law, the CIT....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... has erred in deleting the addition of Rs. 6,38,41,629/- u/s 43CA made by the AO on account of lesser sale consideration on transfer of properties than the value adopted by the stamp duty valuation authority. 4. On the facts and in the circumstances of the case, the Ld. CIT(A) has erred in restricting the addition of Rs. 5,74,71,115/- to Rs. 1,89,54,323/- (being the revenue for the period 01.04.2014 to 30.06.2014) made by the AO on account of Revenue from Wind Mill sold to M/s Rugby Renergy Pvt. Ltd. For the following reasons: a) The assessee has itself admitted that the sale of Wind Mill to M/s Rugby Renergy Pvt. Ltd. had not been completed during the financial year. b) The agreement did not come into force during the current financial year and clause XI of the said agreement cannot be said to have been executed. c) The assessee was the owner of the assets during the financial year and therefore the revenue from the Wind Mills is attributable to the assessee company for the entire financial year." 5. The Ground No.1 raised by the assessee was stated to be not pressed by the ld. AR. The same is reckoned as a statement made from the Bar and accordingly Ground No.1 rais....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 24. Since the ld. CIT(A) has followed the findings of the Assessing Officer himself given in Assessment Years 2011-12 and 2012-13, we do not find any merit in this grievance of the Revenue. Ground No. 1(b) is dismissed." 6.3. Respectfully following the aforesaid decision, the Ground Nos. 1.1, 2 & 2.1. raised by the assessee are allowed. 7. The Ground Nos. 3 & 3.1. raised by the assessee are determination of ALV in respect of property under litigation. 7.1. We have heard the rival submissions and perused the materials available on record. Both the parties before us fairly submitted that the issue raised in Ground Nos. 3 & 3.1. by the assessee are already covered in favour of the assessee by the order of this Tribunal in assessee's own case in ITA Nos. 5010 & 5011 /Del/ 2017 and ITA Nos. 5679 & 5680/Del/2017 for Asst Years 2013-14 and 2014-15 (cross appeals) respectively dated 23.2.2022. The relevant operative portion of the said order is reproduced hereunder:- "5. Ground No. 2 of assessee's appeal relates to the non-exclusion of ALV of spaces/flats under litigation/disputes admeasuring 7511 sq. ft in Jyoti Shikar Building. 6. Briefly stated, the facts of the case ar....
X X X X Extracts X X X X
X X X X Extracts X X X X
....age purposes or for office purposes. The Assessing Officer has not accepted the claim of the assessee and made addition in respect of notional value of the ALV. 16. Before the Id. CIT(A), the assessee contended that it has filed evidences in support of usage of spaces by the assessee alongwith copies of property tax, bills issued by the NDMC, New Delhi. 17. After considering the evidences and after perusing the decision given in Assessment Year 2010-11, 2011-12 and 2012-13, the ld. CIT(A) directed the Assessing Officer to exclude the ALV of the said 12 properties. 18. Before us, the ld. DR strongly supported the findings of the Assessing Officer. 19. Per contra, the ld. counsel for the assessee relied upon the decision of the Id. CIT(A). 20. In our considered opinion, section 22 of the Act itself excludes ALV of such properties of which the assessee is owner and has occupied for the purpose of any business or profession carried on by him. Since the assessee has furnished necessary evidences which have been duly verified by the Id. CIT(A), we to interfere with the findings of the CIT(A). Ground No. 1(a) is dismissed." 8.2. Respectfully following the aforesaid decisi....
X X X X Extracts X X X X
X X X X Extracts X X X X
....rom 1.7.2014 and accordingly the revenue from operation of windmills upto 30.6.2014 amounting to Rs 1,89,54,323/- would become taxable in the hands of the assessee company and remaining 9 months revenue would be taxable in the hands of the buyer i.e. Rugby Renergy P Ltd. Against this finding, both the assessee as well as the revenue are in appeals before us. 10.3. It is a fact that the assessee had not offered any revenue from windmills net of expenses during the year under consideration to tax on the ground that the buyer i.e Rugby Renergy P Ltd had offered the entire revenue from operations of windmills and its related expenses for the whole year to tax in its income tax returns. We find that the ld. CIT(A) had gone by the specific clause 5(xi) of the Agreement dated 22.7.2014 and had held that the revenue from operation of windmills for the period 1.4.2014 to 30.6.2014 (first three months) would be taxable in the hands of the assessee company. We find that while holding so, the ld. CIT(A) did not give corresponding deduction for expenses incurred for the same period of 3 months under the head "income from business". In our considered opinion, the assessee would be duly entitled....
X X X X Extracts X X X X
X X X X Extracts X X X X
....Insurance Policy of Windmills taken in the name of the buyer on 12.1.2015. f) Particulars of communication by the assessee to various agencies for transferring power purchase agreements in the name of the buyer dated 16.2.2015 and 17.2.2015. g) The buyer of Windmills i.e Rugby Renergy P Ltd started making payment of interest on outstanding loan amounts taken by the assessee for purchase of the said windmills vide Clause 5(XI)(B) of the Agreement dated 22.7.2014. It is a fact that the interest cost stood credited in the books of the assessee company which has been accepted by the ld. AO. While this is so, the ld. AO would not be justified in holding that the agreement dated 22.7.2014 was not acted upon by the parties. 10.5. We find that the revenue clause as agreed in the Agreement dated 22.7.2014 is operative and forms integral part of the Slump Sale Agreement dated 23.3.2015. This goes to prove that the original agreement dated 22.7.2014 was acted upon by the parties and it finally stood culminated into Slump Sale Agreement. 10.6. In view of the aforesaid observations, we hold that the order of the ld. CIT(A) requires to be modified only to the limited extent of granting ded....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 32,13,315 27 Ajmer- Ansal Courtyard 22,944 Sq. Ft. 10.50 28,90,896 28 Ajmer- Abhilasha Home, Phase-I 2,120 Sq. Ft. 5.25 1,33,560 29 Ajmer- Abhilasha Home-I, Phase-II 3,500 Sq. Ft. 5.25 2,20,500 30 Mohali GL-I Courtyard 9,071 Sq.Ft. 10.50 11,42,996 31 Mohali GL-I Happy Homes 1,222 Sq. Ft. 5.25 76,986 32 Jaipur-Happy Home 850 Sq. Ft. 9.45 96,390 33 Jaipur- Abhilasha Home 8,480 Sq. Ft. 9.45 9,61,632 34 Jaipur Sweet Home, Anand Lok 1,488 Sq. Ft. 9.45 1,68.739 Total Rs. 8,96,16,461/- 11.2. We find that the ld. CIT(A) observed that the basement area of the property could at best be used only for storage facilities and ALV of such storage space could be estimated to be roughly 50% of the property. The ld. CIT(A) also appreciated the fact that there are lot of restrictions in use of basement area when compared to ground floor and above. The revenue has challenged the relief of 50% granted by the ld. CIT(A). We find that the MCD guidelines do not permit the usage of basement for residential purposes. It could be let out only for storage purposes or car parking purposes. Hence we find that the ld. CIT(A) had fairly estimated the usage of b....