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2018 (5) TMI 1771 - ITAT MUMBAIAddition on account of notional income under the head ‘Income from House Property’ made in respect of unsold flats shown as stock-in-trade - Held that:- In order to give relief to Real Estate Developers, section 23 has been amended w.e.f. AY 2018-19 (FY 2017-18). By this amendment, it is provided that if the assessee is holding any house property as his stock-in-trade which is not let out for the whole or part of the year, the annual value of such property will be considered as Nil for a period up to one year from the end of the financial year in which a completion certificate is obtained from the competent authority. In the instant case, the assessee is a builder and developer. The issue of taxability is with regard to 51 unsold flats. The AY is 2012-13. In view of the insertion of sub-section (5) in section 23 by the Finance Act, 2017, w.e.f. 01.04.2018 narrated here-in-before, we set aside the order of the Ld. CIT(A) and allow the 1st ground of appeal. Addition u/s 14A - Held that:- As per the balance sheet as at 31.03.2012, the partner’s capital account having a credit balance of ₹ 19,28,71,467/- is more than the investment in mutual funds to the tune of ₹ 51,45,000/-. Thus we delete the disallowance of ₹ 1,38,951/- made by the AO under Rule 8D(2)(ii). As regard Rule 8D(2)(iii) While the fixed administrative expenses were excluded on the ground that in the case of a large corporate taxpayer they would be spread over a large number of voluminous activities, the variable expenses were computed at one-half per cent of the value of the investment - the disallowance of ₹ 25,725/- made by the AO under Rule 8D(2)(iii) is confirmed. Also the expenditure of ₹ 12,000/- directly related to income which does not form part of total income, disallowed by the AO under Rule 8D(2)(i) is confirmed. - decided partly in favour of assessee
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