2024 (10) TMI 1571

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....the addition by the A.O. of Rs. 34,14,922/- representing notional rental income in respect of unsold flats forming part of closing inventory of the appellant. The appellant craves leave to add to, amend, alter, delete or modify all or any of the above ground of appeal or raise a new ground of appeal before or at the time of hearing." 3. The facts of the case, in brief, are that the assessee is a private limited company engaged in the business of construction of residential and commercial projects. The assessee has e-filed its return of income on 31.10.2017 declaring total income at Rs. 3,75,91,950/-. The case was selected for scrutiny under CASS. Notices u/s 143(2) and 142(1) were issued to the assessee along with questionnaire.....

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....91,950/-. 4. After considering the reply of the assessee ld. CIT(A)/NFAC dismissed the appeal vide order dated 16.02.2024. It is this order against which the assessee is in appeal before this Tribunal. 5. Ld. AR submitted before us that the order passed by ld. CIT(A)/NFAC is not correct. It was submitted by ld. AR that the assessee company is engaged in the business of construction of residential and commercial projects. At the end of the year under consideration, the assessee company was holding closing stock of unsold residential flats as well as commercial shops. It was submitted by ld. AR that deemed rent/notional rent should not be determined on either residential flats or commercial shops since they are stock in trade and whenev....

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....2.2022. (iii) Sai Spaceon India Pvt. Ltd. vs. DCIT, ITA No.2824/PUN/2017 dated 10.01.2022. (iv) M/s Cosmopolis Construction vs. ACIT, ITA No.191/PUN/2022 dated 11.01.2023. 6. In the light of above decisions, ld. AR requested before the bench to delete the deemed/notional rents determined by the Assessing Officer and sustained by ld. CIT(A)/NFAC. 7. Ld. DR vehemently relied on the order passed by ld. CIT(A)/NFAC and requested to confirm the same. 8. We have heard ld. Counsels from both the sides and perused the material available on record as well as case laws relied on by both the parties. We find that while dismissing the appeal of the assessee, ld. CIT(A)/NFAC relied on various decisions such as (i) CIT vs. Ansa....

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....dated 12-9-2018. Aggrieved thereby, the Revenue has come up in appeal before the Tribunal. 31. Having heard the rival contentions and perused the material on record, it is found as an admitted position that the vacant property, in respect of which deemed rent was calculated by the AO, was stock in trade of the assessee. The Pune Bench of Tribunal in M/s Cosmopolis Construction (supra) has held that no income from house property can result in respect of unsold flats held by the builder as stock in trade at the year-end. Insertion of sub-clause (5) to section 23 by the Finance Act, 2017 w.e.f. 01.04.2018, requiring determination of the ALV in respect of building and land appurtenant thereto which is held as stock in trade, is prospec....