2017 (3) TMI 1615 - ITAT DELHI

Addition on account of Notional ALV of unsold flats/spaces - Held that:- This ground is to be decided against the assessee because the Delhi Bench of ITAT and Hon’ble Delhi High in the assessee’s own case for assessment year 1994-95 to 1998-99 [2009 (10) TMI 49 - DELHI HIGH COURT] has rejected the assessee’s plea on this count. Accordingly, ground no.1 is dismissed.

Denial of deduction u/s 80IB(10) – Held that:- There could not be any dispute as regards non-compliance of clause (a) to section 80IB(10). Now, coming to the second ground for rejection of assessee’s claim on the ground of some units being of more than 1000 sq.ft., we find that this issue has also been considered in earlier year’s appeal and proportionate deduction was allowed. Therefore, for the sake of brevity, we do not repeat the same.

Non-fulfilling of the condition of completion of units is concerned, the contention of ld. counsel is that the amendment is prospective. However, he has also pointed out that in the case of assessee, all the projects were completed before the terminal date of completion and completion certificate were also received for majority of the units/houses. Therefore, we do not consider it necessary to go into the issue regarding amendment being prospective or not. The claim of assessee is that actually it has complied with the condition as per amended provisions. The Assessing Officer is directed to verify this aspect and allow the claim in accordance with law. In the result, this ground is partly allowed for statistical purpose.

Benefit of section 23(1)(c) - Held that:- This provision is applicable in respect of let out/ letiable property. However, in the present case, admittedly, the assessee was holding various commercial and residential flats and spaces for being sold to the prospective buyers. The assessee in its reply, inter-alia, clearly stated that spaces/flats formed part of stock-in-trade of the assessee company as the same was for business purposes and was kept in self possession till the time it was sold. The vacant possession thereof was handed over to the buyers on sale. Thus, the assessee never claimed that the properties were letiable properties and, therefore, assessee cannot get the benefit of section 23(1)(c). The next objection of the assessee is in regard to determination of annual letting value in respect of farm lands.

No findings have been recorded in this regard by lower revenue authorities, as to whether annual letting value could be determined in respect of such farm lands in terms of section 22 or not. We may observe that if there was no building on farm lands then it will not come within the ambit of section 22. On this aspect, the Assessing Officer is directed to examine the issue afresh.