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2019 (8) TMI 1668 - AT - Income TaxIncome from house property - estimation of notional rent in respect of unsold plots - Disallowance by estimating the Annual Letting Value (ALV) of unsold flats forming part of closing stock in trade and assessing the same as ‘Income from house property.’ - HELD THAT:- The issue of estimation of notional rent in respect of unsold plots has been decided in the case of assessee’s sister concern Makewaves Sea Resort Pvt. Ltd [2019 (3) TMI 1871 - ITAT MUMBAI] wherein as relying on case of Ferani Hotels Pvt. Ltd. [2014 (11) TMI 985 - ITAT MUMBAI] wherein as deleted the addition confirmed by the CIT (A) on account of notional rent determined by the AO by holding that the ALV of the unsold unit of assessee project is assessable under the head ‘income from house property’. Since, the findings of the Ld.CIT (A) is not in accordance with the decision of the coordinate Bench rendered in the case of Ferani Hotels Pvt. Ltd. (supra), we respectfully following the decision of the coordinate Bench set aside the order of the Ld. CIT (A) and allow the appeal of the assessee and direct the AO to delete the addition made under the head ‘income from house property’. We find that the issue is squarely covered in favour of the assessee and, hence, the order of the CIT(A) upholding the addition made by AO estimating the ALV in respect of unsold flats cannot be sustained. The decision relied upon by the learned DR in the case of CIT vs. Gundecha Builders [2019 (1) TMI 112 - BOMBAY HIGH COURT] is distinguishable on facts as in that case the unsold portion of the property constructed by the builder was given on rent and rental income was treated as business income. Whereas, in the present case, the assessee has not let out any flats and all were lying unsold as stock in trade. Accordingly, we are inclined to set aside the order of the CIT(A) and direct the AO to delete the addition on account of estimation of ALV in respect of unsold flats for A.Y. 2013-14. Appeal of the assessee is allowed.
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