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2018 (12) TMI 1763 - ITAT MUMBAIRevision u/s 263 - AO has not examined the taxability of unsold flat under the head "Income from House Property" and disallowance as per the provisions of section 36(1)(iii) - HELD THAT:- Keeping in view the contrary decision of non-jurisdictional High Court, we are of the view that issue is debatable and two views are possible. The Hon'ble Supreme Court in Max India Ltd.'s case [2007 (11) TMI 12 - SUPREME COURT] held that when two views are inherently possible, the provision of section 263 would not attract. We may refer here that the unsold flat was treated by assessee as stock-in-trade in its books of account. The flats sold by the assessee were assessed under the head "Income from Business". Therefore, in our considered view that the order for not bringing the unsold flats to tax at notional letting value under the head "Income from Other Sources" is not erroneous. The assessing officer has taken one of the possible views. Even otherwise, sub-section (5) in section 23 was inserted by Finance Act, 2017 and is applicable only from 01.04.2018 and not for the Assessment Year under consideration. Therefore, the twin condition as prescribed under section 263 are not fulfilled in respect of first issue i.e. taxability of unsold flats under the head "Income from House Property". Disallowance of interest u/s 36(1)(iii) in respect of payment made to PRS Developers - AO has taken starting figure of ₹ 739.66 Crore and reduced interest disallowance of ₹ 27.66 Crore, however, in the notice; the opening figure is taken as per assessment order. As per the working of notice the opening CWIP on 01.04.2012 should be ₹ 720.24 Crore, whereas the opening CWIP determined by Assessing Officer is ₹ 711.90 Crore. The Assessing Officer has correctly worked out opening CWIP at ₹ 711.9 Crore and has reduced ₹ 14.27 Crore interest attributable for Assessment Year 2013-14. In our view The Assessing Officer has correctly worked out the CWIP as on 01.04.2012 at ₹ 711.90 Crore (₹ 739.56 Crore - ₹ 27.66 Crore) and has reduced ₹ 14.27 Crore interest attributable for A.Y. 2013-14. Therefore, the order is not erroneous and passed after due verification of fact. Hence, the revision order is passed by ld. PCIT on second issue is also failed. - Decided in favour of assessee.
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