TaxTMI 
TaxTMI 
2026 (9) TMI 114
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....y Learned CIT(A) had partly allowed the appeal against the Assessment Order, dated 14/12/2019, passed under Section 143 (3) of the Income Tax Act, 1961 [hereinafter referred to as the 'Act'], for the Assessment Year 2017-2018]. 2. The Assessee has raised the following grounds of appeal: 1. The Ld. CIT(A) has erred in law and on facts of the case in confirming addition u/s 22 of the Act of Rs. 25,28,505/. In the facts and circumstances of the case, after having directed the AO to rework notional income of rent from the unsold flats, Id. CIT(A) ought to have quashed the assessment order 2. The Ld, CIT(A) and Ld. AO have erred in law and on facts of the case in not appreciating that section 23(5) of the Act inserted w.....
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....ment of housing projects. During the Assessment Year 2017-2018 the Assessee filed return of income which was selected for scrutiny. Assessment was framed on the Assessee vide Assessment Order, dated 14/12/2019, passed under Section 143(3) of the Act. The Assessing Officer concluded that the Assessee owner of unsold units. As per provision of Section 22/23 of the Act, the annual letting value of such unsold units was chargeable to tax as notional rental income under the head Income from House Property. Therefore, the Assessing Officer brought to tax notional rental income of INR.25,28,505/- in the hands of the Assessee taking 5% of value of the Closing Stock of Work-In- Progress as the notional rental income. 5. In appeal preferred by the....
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....s are "occupied for the purposes of any business or profession", unsold flats forming part of a builder's stock-in- trade are squarely covered by this exclusion. Reliance in this regard was placed on submission filed before the Assessing Officer and the judgment of the Hon'ble Gujarat High Court in the case of Commissioner of Income Tax Vs. Neha Builders Private Ltd. [2008] 296 ITR 661 and the decision of Co-ordinate Benches of the Tribunal. Without prejudice to the aforesaid, it was further contended that the CIT(A) itself has found the computation to be incorrect. Once the basis of computation is found arbitrary, the addition cannot survive. 8. Per contra, Learned Departmental Representative placed reliance upon the orders passed b....
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....terial record shows that the Assessee had offered to tax actual rental income earned on units which were leased out during the relevant previous year as business income. It has not been disputed by the Revenue that the Assessee has been consistently following the same policy. There is nothing on record to show that similar additions on account of notional rental income from unsold units were made/sustained for any preceding or succeeding assessment years. Even the addition in the hands of the Assessee for the Assessment Year 2016-2017 was deleted by the Learned CIT(A) (albeit giving different reasoning). Given the aforesaid, we are of the view that in the facts and circumstances of the present case, the addition of INR.25,28,805/- made by t....